We talk about venture scale startups. But no one has defined it concisely.
So here we go….
What is a venture scale startup?
Venture scale startups have big total addressable markets, monopolistic endgames, high growth potential and they are scalable. What does this mean?
- Big TAM (Total Addressable Market) — These startups serve big markets.
- Monopolistic Endgame — Big markets mean nothing to VCs if you can’t capture enough of it. VCs prefer winner-take-most games. Uber, Facebook and YouTube can bleed money for years because market domination gives them pricing power.
- High Growth — Startups need a way to fund hyper growth. If a venture scale startup refuses venture capital, another will take it. And outpace them.
- Scalable — Most startups with 100x exits have low marginal costs. Ignore this at your own risk. See Atrium and Zirtual.
These are the characteristics of venture scale companies.
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