The Full Ratchet (TFR): Venture Capital and Startup Investing Demystified
Investor Stories 399: Why I Passed (Whitmire, Garcia, Tusk)
May 1, 2025
06:46
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Quick takeaways
- Investors emphasized the significance of evaluating total addressable market size, opting to target larger opportunities for sustainable growth.
- The discussion revealed the unpredictable nature of startup investments, illustrated by missed opportunities like Beyond Meat's regulatory challenges and market success.
Deep dives
Strategic Focus Over Immediate Gains
A critical decision discussed centers on the rejection of an opportunity to target client accounting service firms, which initially showed interest in the product. The reasoning for passing on this potential market was based on the realization that the total addressable market (TAM) for such services was only $100 million, insufficient for building a public company. Instead, the choice was made to concentrate efforts on pursuing larger enterprise accounts with a TAM of approximately $20 billion. This strategic decision not only aligned with the company's long-term vision but ultimately allowed for minimal support of the client accounting firms while maintaining focus on core business growth.
