Some investors have a theory of the universe, though not all.
The theory of the universe often has some main risk vectors.
– Is the product compelling?
– Are people using it?
– Are they paying?
– Can there be a lot of such paying people?
Commonly people vectorize a company’s traction on these questions as
– team
– product
– users
– revenue
Good team but…is the product good? Good product but…do users want it? Good user numbers but…can you get revenue. Usually the questions stack like that. If you have a lot of revenue nobody gives a crap about your team.
The definition of “too early” however varies by investor pretty randomly. You’d think this was stage oriented – if a firm does A rounds, then are you ready for an A round? No? Then too early.
You’d think this but it isn’t quite true. It’s more, “do I believe you can conquer your next step or not”. If the investor doesn’t believe you can conquer it, they want proof and you are therefore too early if you don’t have proof.
That’s how I process those words by the way.