Sourcing quality: Was the deal referred by a trusted co-investor or found in a cold inbound? Sourcing channel predicts win rate.
Market size: The VC power law demands a TAM ≥10B capable of producing a fund-returning outcome. Small markets can’t support outlier returns.
Team: The #1 signal per most top-quartile VCs — unique insight, relevant domain experience, and willingness to iterate are paramount.
Traction: Revenue run-rate, growth rate, retention, NPS — quantitative evidence the product has product-market fit, or is close.
Competition & moat: Structural advantages that get stronger with scale: network effects, switching costs, proprietary data, regulatory licenses.
Business model: Unit economics: LTV/CAC ratio, gross margin, payback period. Negative margin businesses require a clear path to profitability.
Exit potential: Does this fit the portfolio of an acquirer? Is there a credible IPO path? Is there a comp set of outcomes at 10–50×?
Valuation: Entry price vs. stage-appropriate comp set. At Seed: $5–15M pre. Series A: $20–60M. Over-priced entries compress returns even at 50× outcomes.