Most founders build pitch decks around their TAM SAM SOM. We almost always skip that slide.

In pre-seed investing, those numbers are pretty irrelevant to us. It should be a given that you’re building in a massive, growing market. All TAM SAM SOM does is tell us that the market can be big. Don't tell me that the market can be big. Show me how you will get there.

Instead, show us your “Path to $100M ARR,” which is how many successful founders think and articulate their opportunity. It's an easier way to answer: How does this get big, and does this investment have the potential to generate a fund-returning outcome?

Imagine a vending machine company where each deployment generates roughly $5M in annual revenue. The company only needs 20 active deployments to reach $100M ARR.

That tells me three things: the revenue model works at a small scale, the market is large enough that $100M represents a small share, and growth is driven by a clear, countable unit. 

Now, if the total market is ~$500M, a $100M ARR outcome requires 20% market share. That’s theoretically possible, but rarely realistic. The path to $100M fails the market-share test.

Anyone can talk about market size. Very few founders clearly show how they’ll get to $100M.

We love meeting founders who’ve deeply thought about building a generational company. If that’s you, Redbud VC writes $250k-$500k checks into early-stage startups. To pitch us, click here: