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4 Types of Concept Company

 , updated on May 14, 2017
A concept company is a firm that attracts a high valuation based on excitement for its business model as opposed to fundamentals such as revenue, net profits, growth and book value. Concept companies may go through a dramatic boom and bust cycle. The following are common types of concept company.


Concept companies are often the leader in a technology that is widely covered by the media with wild predictions for its future potential.

Charismatic Leaders

Firms led by executives who say exciting things and aggressively take on risk. For example, they might make big acquisitions and often seek to raise more capital.


Firms in a young industry or that have a new type of business model.

Local Champions

Concept companies that benefit from a home bias whereby locals see the firms valuation as reasonable but people in other countries view it as dramatically overvalued.
Overview: Concept Company
TypeBehavioral Finance
Definition A firm that attracts a high valuation based on excitement for its business model, industry or products.
Related ConceptsFear of Missing Out
Greater Fool Theory
Efficient Market Hypothesis
Business Models
Home Bias

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