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Malcolm Lewis | Pitch Deck Coach

What makes your startup VC-backable?

What makes your startup VC-backable? The answer is simple, but not easy to achieve: VCs look for companies that can earn $100M in revenue in about 5 years.

Generally speaking, this is the type of revenue ramp that VCs are looking for:

It’s extremely challenging to hit these numbers.

And it requires two things:

1) A large $BB market.

Why? Because it's easier to hit $100M with 5% share of a $2B market than with a 20% share of a $500M market.

2) A unique competitive advantage that your customers love and your competitors cannot easily copy.

Why? Because you can't dominate a market unless your product is the best product available for that market.

Why do VCs use this $100M ARR benchmark?

Because they raise big funds and need 1-2 investments per fund to generate a $B+ exit to deliver an ROI to their LPs.

Google ‘VC fund returner’ for more info on this math.

What if your market isn't big enough to hit $100M ARR?

Lower your sights and focus on angel investors. They invest smaller amounts and therefore need smaller exits to deliver an ROI on their investments.

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