For me, the key question is: "how fast is the company growing once they figure out product/market fit?" Some companies find product/market fit immediately while others might need 2-4 years. The amount of time is partly related to skill, but partly related to luck, the complexity of the problem being solved, etc. So I don't judge too much on how long it takes to get to PMF.

But once someone has PMF, the question shifts to: "How quickly can the business grow and how large can it get?" The goal for most earlier stage VCs is to find companies that can scale to $100m+ in annual revenue in less than 10 years. If a company is at $500k ARR and tripling, then you can draw a path to it hitting $100m ARR eventually (e.g. triple annually three times, then double annually three times). But if the company is growing at 30% or 50% per year at $500k ARR, then it's nearly impossible to make a path to $100m+ ARR. It would take a company at $500k ARR and 40% annual growth over 15 years to hit $100m ARR.

To address the question of expectations in different industries: I'm always thinking about the path to $100m ARR. If an industry take a while to break into but then revenue can ramp up more quickly, that's okay. But the path needs to be there and work on the time scale of a venture fund (~10 years).

The time horizon definitely differs based on what you're trying to do, and the industry in which you're trying to do it. We've seen that our hard tech companies tend to need more money and time before producing meaningful milestones, and those milestones almost never look as they would for a pure software business.

Companies are usually judged relative to expectations in their field. This goes for founders as well, who are judged relative to everything else the investor has seen.

Ironically, the longer a company has been in business with slow growth, the less attractive it is to a VC doing early stage investment.

One would think that such a company can turn around and more easily become successful than a company which has only an MVP that generates no money, but that’s not how VCs see it. They want to see “traction”, and even better, a company amassing users like wildfire.

Twitter had no revenues for years but was raising at a $100M+ pre-money valuation because of user growth alone.

If Twitter had added a business model and generated revenue but didn’t have the hockey stick 5 years in, then VCs would actually be more averse to invest in it.

I would think the key if you’ve been in business for a while and have lackluster growth would be to sell investors on why the new direction you’re going in has so much more potential than what you’ve done so far. Even if it’s not a pivot, it might be better if it sounds like one. That way, instead of extrapolating from your current numbers (bad for you), investors can give you more of a clean slate.

Already having a userbase, revenue, a team, etc. in place is a massive advantage, because these things are so hard to accomplish. If you tell the right story, you should look infinitely better than an early stage company that pivots due to lack of traction (and the latter get funded all the time).

The Lindy affect applies to survival as much as it does to upside. If a business has been the same way for 30 years, it's much more likely to survive another 30 than a new company, but those 30 years will likely be similar to the first. Not all parts of the economy have such a fast up and down curve, so the 30-year business might be an appealing investment or not. Huge delta might be for some investors, but Lindy effect durability is very desirable to others.