Venture Capitalists Prefer investing in businesses where they are certain they will
generate meaningful revenue from their investment. Such a business can only be determined in
terms of its repeatability and scalability. Repeatability refers to a business model that has the
capacity to generate recurring revenues without immense effort (Adamczyk 2016). On the other
hand, a scalable business model is one whereby the entrepreneurs have the capacity to increase
profits and sales without proportionately increasing costs by Imagine. Such a business is very
easy for venture capitalists to consider investing in because they are certain that the return on
investment will enable them to fulfill their desired levels of income. B2B businesses that have a
high level of scalability can scale without increasing the input into the business (Zajko 2017). An
unscalable business will require investors to put in a lot of money so as to increase the output of
the business and this may not play well with the investors.
A business that is more repeatable has a much higher probability of success and therefore
it is simple for the investors to understand the business model as well as predict its features. In
the initial stages of a business founders shouldn't focus on skill first but the business model the
employee must certainly be scalable (Zajko 2017). This functions in such a manner that investors
can clearly see the only inhibiting Factor to a business-killing is the lack of funds and therefore
their role is clearly defined. It means that all the appropriate cogs to the business are functioning
properly and this implies great success for the business as a whole (Adamczyk 2016). The
business must possess both repeatability and scalability because there are much higher chances
of success due to the ultimate return-on-investment to be attained if at all the business can be
scaled. A scalable business will in most cases have a similar process for each customer.
Businesses that deal with Custom products or services are hard to scale the cost for each and
every client the business has to change its Processes to suit the needs of this specific customer.
A scalable business will have uniform operations for all customers and therefore it is much easier
to scale up.
Adamczyk, M. (2016). An attempt to define the concept of a start-up company based on
inductive research. In QUAERE 2016: reviewed proceedings of the interdisciplinary
scientific international conference for Ph.D. students and assistants (pp. 67-74).
Zajko, M. (2017, December). Challenges of the scaling-up process for start-ups. In the Balkan
Region Conference on Engineering and Business Education (Vol. 3, No. 1, pp. 62-70).