Executive Summary

In 2026, the most significant risk to venture returns is Temporal Misalignment. While traditional due diligence focuses on Total Addressable Market (TAM), Predict Ventures’ PV1 engine prioritizes Infrastructure Layer Maturity and Regulatory Velocity. By benchmarking current technological cost-curves against 50 years of historical adoption cycles, we identify the precise "Execution Window" where market friction drops and scalability becomes exponential.

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The TAM Fallacy: The High Cost of Being "Early"

For decades, the standard VC investment thesis began with a $1T Total Addressable Market (TAM). However, history proves that a large market is often a trap if the underlying ecosystem isn't ready. In quantitative finance, being "Right" at the "Wrong Time" is functionally identical to being "Wrong," but significantly more expensive.

At Predict Ventures, we analyze "Market Readiness" as a multi-layered stack. If the bottom layers—infrastructure, consumer psychology, or regulation—are not yet solidified, the capital injected into a startup acts as a subsidy for a market that doesn't yet exist.

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The PV1 Velocity Framework: Quantifying the "When"

The PV1 engine replaces static market slides with a dynamic Market Readiness Index (MRI). We analyze the operational environment through three high-precision lenses:

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1. Infrastructure Layer Maturity (The Dependency Test)

Every breakthrough requires a "Platform Layer" to reach a specific price-performance threshold before mass adoption is possible.

• The Metric: PV1 scans for Unit-Cost Convergence. For example, in the transition to AI-native SaaS, we track the Inference-Cost-to-Revenue Ratio.
• The Insight: A startup is 4x more likely to scale if it launches when the cost of its primary technological dependency (e.g., compute, storage, or sequencing) has dropped by at least 60% in the previous 24 months. If the "Infrastructure Tax" is too high, the company will burn through its Series A before reaching product-market fit.

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2. Regulatory and Policy Velocity

In 2026, market entry is increasingly governed by shifting legal frameworks.

• The Metric: We track Policy Momentum—the rate at which global standards move from "Ambiguity" to "Codification." This is particularly critical in sectors like Carbon Accounting, Bio-Security, and Decentralized Finance.
• The Insight: Startups operating in "Regulatory Friction" zones require 3.2x more capital to reach the same ARR as those in "Aligned" zones. The PV Score quantifies this "Regulatory Tax," allowing investors to see if the startup is fighting the current or riding the wave.

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3. The Resilience of Consumer Psychology

Product adoption is rarely a linear path; it follows a "Step-Function" dictated by societal readiness.

• The Metric: PV1 calculates the Friction-to-Utility Ratio. We analyze 50 years of behavioral data to determine if a new solution requires a "Minor Habit Tweak" or a "Major Cultural Shift."
• The Insight: Startups requiring a fundamental change in human behavior (e.g., early VR or pre-mobile social networks) have a failure rate 80% higher than those that "Slot-In" to existing workflows. We look for the "Path of Least Resistance."

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The 2026 Reality: Identifying the Execution Window

The PV1 engine doesn't just ask if a market is big; it asks if the market is porous. We define the ideal investment environment as one where Systemic Pull exceeds Capital Push. By benchmarking current macro-conditions against historical data from the Dot-Com era, the GFC, and the 2021 SaaS peak, PV1 identifies the "Window of Opportunity." This allows Predict Ventures to find "Alpha" in overlooked sectors that are just hitting their maturity inflection point.

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