Revenue tripled every year, and every unit of that revenue destroyed value. The market size was never the problem.
This is an anonymised composite, not a report about a named company or person. The situation and numbers are typical rather than reported.
A direct-to-consumer brand in a category worth tens of billions globally. Revenue had grown from 900,000 to 2,800,000 in a year, almost entirely through paid social advertising. Customer acquisition cost was 95. Gross profit on a first order was 28. Customers placed, on average, 1.4 orders in total, giving a lifetime gross profit of about 39 against a cost of 95 to acquire them. Repeat purchase was 22%. The round was 6,000,000 at a 30,000,000 post-money valuation.
Growth was real and fast, and it was bought. Every customer acquired cost about 56 more than they would ever contribute in gross profit, so scaling the business scaled the loss. The deck led with market size and growth rate; the unit economics appeared in no slide.
Invest on the strength of growth and market size, invest conditional on unit economics improving, or decline.
The investor declined, and wrote a one-line reason: acquisition cost of 95 against lifetime gross profit of 39, with no evidence of improving repeat purchase. They told the founder the specific figure that would bring them back - a repeat rate above 40% sustained for two quarters - and offered to look again at any time.
The company raised from another investor, scaled advertising further, and reached 7,100,000 of revenue the following year. When funding conditions tightened, it cut marketing spend sharply; revenue fell 62% within nine months, which showed how much of it had been rented rather than built. The company was eventually sold for less than the capital raised, and shareholders below the preferences received nothing. The investor who declined recorded that the market had indeed been vast throughout, and had never been the binding constraint.