Billion-Dollar Opportunity Filter

Sam Rattner, a successful entrepreneur who sold his first company for $40M at age 23, shares his framework for identifying and pursuing billion-dollar opportunities.

Core Investment Philosophy

• Only pursues opportunities that could reach $1B+ valuation in 5 years
• Focuses on finding unique angles in established markets
• Looks for opportunities others overlook or find too complex
• Values businesses with inherent transaction components over pure audience plays

Key Evaluation Criteria

• Market Evolution Analysis

  • Studies how markets will evolve over time
  • Identifies pieces that are headaches/capital intensive that others avoid
  • Looks for opportunities that become less capital intensive due to lack of competition

• Value Creation Strategy

  • Seeks 5x improvement potential vs. incremental gains
  • Focuses on fundamental business model innovations
  • Looks for opportunities to dramatically reduce costs or improve efficiency

• Execution Requirements

  • Evaluates personal involvement needed
  • Considers geographical constraints
  • Assesses operational complexity

The "Duck Calls" Philosophy

• Value lies in niche, overlooked markets
• Looks for hidden ecosystems with passionate communities
• Seeks businesses that appear odd or unnecessary to outsiders
• Values opportunities that are:
  • Regional
  • Complicated to find
  • Niche-focused
  • Under-appreciated by mainstream investors

Deal Assessment Process

• Deep research into industry specifics
• Calls industry experts and former employees
• Studies contracts and regulatory requirements
• Evaluates potential pivots or innovations
• Considers scalability across markets
• Tests assumptions through direct experience

Red Flags

• Requires permanent relocation to remote locations
• Cannot scale beyond initial market
• Requires too much personal oversight
• Limited potential for technological innovation
• Purely incremental improvements to existing models