# Venture Fit

#concept #strategy #finance

## Summary

Whether a business belongs on the venture track at all — and what happens when one that doesn't is stretched onto it. Founded by [[2026-07-26-how-to-build-a-billion-dollar-company-2027]] ([[oskar-hartmann]]): **only ~1% of businesses fit venture**, fundraising is an *obligation* rather than a success, and "растяжка на венчурные ожидания" (stretching onto venture expectations) kills otherwise-healthy companies. New territory for the vault — no prior source discussed funding structure — and directly relevant to the owner's implicit default (bootstrapped services). `Status: tentative` — single source, but the central case is one the speaker claims a shareholder's view of.

## Current Understanding

**The 1% rule.** Venture math needs outlier outcomes; European VCs reportedly won't engage below $100B+ potential. Everything else — most real businesses — is structurally mis-fit for the instrument, not merely "too small yet."

**The cautionary case — Fab.com** (Hartmann was a shareholder): a genuinely good niche business ($50M→$100M revenue, loyal design-goods audience) raised at a **$1.5B valuation**, inheriting a $10B-revenue expectation. The prescribed behaviors followed — marketing spend up, international expansion, more countries, more product lines, free shipping everywhere — and **"the only thing that grew was losses."** It never got back to $100M; bankrupt. The mechanism worth keeping: the round didn't fund the existing business, it **replaced the business with a different, imaginary one**, and the real one died in the costume.

**The alternatives are not consolation prizes:**

- The top-20 largest **private** US companies do $30B+ revenue and still belong to founding families.
- Slow mid-market growth ($10M→$100M) is "вполне себе бизнес" — just not a venture one.
- Hartmann's own ShoppingLive: built on "a couple hundred thousand dollars," ~9-month payback, reinvested profits → Russia's #1 TV shop, one of his best-ROI ventures.
- The 2026 twist: AI labs (Anthropic, SpaceX, OpenAI) are absorbing nearly all free venture cash anyway — "you're either a top AI lab or, for the venture market, you don't exist" ([[ai-market-shift]]). The default path for everyone else is his "amusement park" model: 9-month-payback units, reinvest, grow slowly.

**Relation to the vault:** this is the funding-layer version of a discipline the vault already holds at the offer layer — refuse borrowed expectations, price and grow from real economics ([[unit-economics]]). It also implicitly sides with the vault's whole services thesis: a niched dev-services firm is definitionally in the 99%, and per this source that is a *fine place to be*, not a failure state. Note the counterweight inside the same source: venture money is the rational instrument when a [[sales-channel-as-moat|channel]] must be burned in at negative unit economics before LTV lands — so the claim is "know which game you're in," not "venture is bad."

## Evidence

- 1% rule, $100B screen, Fab.com collapse, private-company alternatives, ShoppingLive case, AI capital suction — [[2026-07-26-how-to-build-a-billion-dollar-company-2027]] (single source)
- Venture rounds as deliberate negative-unit-economics funding — same source, on [[unit-economics]]

## Related Pages

- [[unit-economics]] — the math that decides which track you're on
- [[tam-sam-som]] — the sizing vocabulary venture decks lead with, and why execution starts at the inner circle
- [[sales-channel-as-moat]] — what venture money legitimately buys
- [[ai-market-shift]] — the 2026 capital landscape that shrinks the venture door further
- [[venture-fit]] is the funding-layer sibling of [[pricing-from-value]]'s refuse-borrowed-benchmarks discipline
- [[eugene]] — the owner's implicit track (bootstrapped services) — this page says that default is sound
- [[overview]]

## Contradictions / Uncertainty

- `Status: tentative` — single source; the 1% figure and $100B screen are assertions; Fab.com's collapse has public reporting but the *causal* story (the round killed it, not e-commerce headwinds) is the speaker's interpretation from inside.
- Survivorship in the alternatives: family-owned giants and ShoppingLive are selected successes of slow growth, exactly the selection error the source criticizes elsewhere (best year ≠ base).
- The vault has no pro-venture voice to balance this — one more single-sided position, flagged as such.

## Next Questions

- Where do AI-era dev-services firms sit — is there now a venture-fundable services shape (agent-ops, harness platforms), or does the 1% rule exclude services categorically?
- What is the minimum honest test that a business is in the 1% before taking the obligations?
