The order in which you build an ambitious company

There is traditionally a specific order in which you build an ambitious, venture-backed startup. If you follow these milestones, it should help you focus, make appropriate trade-offs, and ideally increase your chances of successfully raising a venture round by aligning your stage to the right investor, right capital, and right diligence process.

Evolution of a company:

1. Idea and team
2. Minimum Viable Product (and willingness to pay)
3. Product Market Fit (and quantify the total addressable market, or TAM)
4. Early Growth (and demonstrate more money will increase the company valuation)
5. Scale (and TAM expansion)
6. Profitability

The venture market aligns to this order

The good news is, there is a thriving venture market that is designed around this order. Each investor or fund has capital structured around the duration, risk and return profile for each segment.

1. Idea and team (friends and family, angel investors or pre-seed)
2. MVP (seed)
3. PMF (series a/b)
4. Early Growth (series b/c)
5. Scale (series c/d/e)
6. Profitability (public markets)