Business models are unequivocally the most important part of a business, as they tell the story of how the enterprise works.

Business models allow us to hone in on who exactly the customer is, what the customer values, and how the company founders make money in this business. They are descriptions of how businesses function and are structured, and through this foundation, businesses are able to scale and innovate.

SaaS, marketplaces, metered services, direct to consumer — if you’ve ever wondered what these business models entail, as well as pros and cons of each, read on. Below, you will find detailed explanations and descriptions of these common business models that venture capital firms invest in.

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