While this will vary for each founder, business model, and ecommerce venture capitalist, common examples include:
Being profitable on the first customer order or soon thereafter (e.g., subscription model), allowing an ecommerce business to test new things, hire appropriately, and have cash flow to reinvest in the business
Having customer service that sets them apart from incumbent brands
An incredible management and founding team
Competitive advantages (e.g., intellectual property, utility patents, supply chain efficiency, etc.)
Healthy unit economics (not just strong gross margins but contribution margins, taking all variable costs into account that enable ecommerce businesses to scale sustainability)
The infrastructure for scalable marketing and distribution (e.g., you can’t spend 30-40% of the funding you raise on Facebook and Google ads, as what worked over the last 10 years won’t work going forward)
Cash efficiency and a clear path to profitability (in the last year, there have been many examples of VC-funded ecommerce companies who try to test public markets when they’ve never had a month of EBITDA positive numbers)
An understanding of where the market is going, what it’s going to take to be successful in the next leg of the journey, what’s going on with consumers and what’s shaping their lives, being able to meet a need that is otherwise being unmet, and a business model that fits the future and makes the most of an inefficient market
Read more: What VCs Look for in DTC Brands When They Invest [With Kate McAndrew]