An investable business model

 An investable business model is a clear plan for how your company creates, delivers, and captures value in a way that attracts investors. Investors are looking for evidence that your business can scale, generate revenue, and deliver returns. Here’s a detailed breakdown of what makes a business model investable:

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1. Clear Value Proposition

• What problem are you solving?

• Who has the problem? (target market)

• Why is your solution better than existing alternatives?
  Example: Zoom solved the problem of unreliable video calls with a simple, high-quality solution.

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2. Scalable Revenue Streams

Investors look for repeatable, scalable ways to make money. Examples:

• Subscription model (SaaS): recurring revenue from users.

• Marketplace/Commission model: take a percentage of each transaction.

• Freemium + Upsell: attract users free, convert them to paying customers.

• Licensing / IP royalties: monetize your technology or patents.

• Ad-supported model: if user base can scale massively.

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3. Large & Growing Market

• Total Addressable Market (TAM) should be big enough to justify the investment.

• Investors prefer markets that are growing, not shrinking.

• Showable evidence: market reports, trends, or adoption rates.

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4. Defensible Advantage

• Why can’t someone easily copy you?

• Competitive moats include:

  • Technology/IP

  • Network effects

  • Brand & community

  • Exclusive partnerships

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5. Unit Economics & Profit Potential

• Customer Acquisition Cost (CAC) vs Lifetime Value (LTV): profitable companies usually have LTV > 3× CAC.

• Investors need to see that each new customer adds real value.

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6. Clear Growth Path

• Show how you plan to acquire users/customers: marketing channels, partnerships, viral loops.

• Explain scaling plan: staffing, tech infrastructure, distribution.

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7. Strong Team

• Investors bet on founders more than ideas.

• Highlight complementary skills, domain expertise, and track record.

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8. Exit Potential

• Investors want a way to realize returns:

  • Acquisition

  • IPO

  • Strategic partnerships

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Example: Investable SaaS Model

Component	Example
Problem	Businesses struggle to manage remote teams efficiently
Solution	Collaboration software + AI productivity assistant
Market	50M+ SMBs globally (TAM $50B)
Revenue	$20/user/month subscription
Growth	Viral adoption via freemium model
Moat	Proprietary AI algorithm + integrations
Unit Economics	CAC $50, LTV $300
Exit	Potential acquisition by Microsoft/Google

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✅ Key Takeaway: An investable business model clearly answers:

1. Who is your customer?

2. What is the problem & solution?

3. How will you make money?

4. Can this scale?

5. Why is it defensible?

6. How will investors make a return?