In the value creation chain today, entrepreneurs have been faced with stiff hindrance in turning their innovative ideas into marketable products due to the manufacturing-entrepreneurship disconnect in terms of accessibility, predictability and agility. Toward bridging this gap, in this paper we develop a formal mathematical framework for markets of virtual things: parameterized products and services that can be searched, composed and optimized. The proposed framework formalizes the notions of virtual product and service designs and customer-facing specs as well as requirements’ specs. Based on these formal concepts, the framework also formalizes the notions of search for and composition of virtual products and services that (1) are mutually consistent with the requirement specs, (2) are Pareto-optimal in terms of customer-facing metrics such as cost, product desirable characteristics and delivery terms; and (3) that are optimal in terms of customer utility function that is expressed in terms of customer facing metrics. We also propose the design of a repository of virtual things and their artifacts, to be used in support of the virtual things’ markets. The proposed markets of virtual things can lead to democratizing innovation by allowing entrepreneurs without design and manufacturing expertise to bring their ideas to markets quickly.