A venture backable business is a company whose business model has the potential to generate significant outsized returns.
If a business doesn't potentially cause a big impact in a market worth billions, neither generates enormous annual revenue, then it isn't a venture backable business.
The pillars of a company venture backable are:
- Team: the team is passionate and deep understand the industry and the customers they're working on. They have a long period of recognizing inefficiencies in the industry they've worked in.
- Market and Vision: the market should worth billions. Also, the founder's insights about their idea should clarify that they're the ones to solve a critical problem.
- Traction: the team has to be able to execute the idea. The founders can use milestones to prove traction. For example, milestones might include the initial product/market fit as the app's number of downloads.