VC biases
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VC biases

  • Growing revenues for lending businesses is easy. Growing while maintaining low loss rates and high repayment rates is much harder
  • E-commerce businesses are easier to launch, but harder to scale. Whereas marketplace businesses are hard to launch, but have significant benefits (network effects) at scale
  • D2C businesses tend to trade at much lower revenue multiples than SaaS
  • D2C businesses can sometimes cap out at $15 - $30M of revenue as CAC starts to blow out and competition intensifies
  • The biggest problem with selling to SMBs is acquiring them (cost effectively)
  • CAC for consumer is difficult
  • Hard to invest pre-traction for consumer