What makes him a villains is his back story being a former cop whose wife was killed by criminals is false, and that he practically kidnapped Mindy to train her to be an assassin.
However, in the film. Big Daddy's backstory about being an ex-cop hell bent on revenge in actually TRUE.
It is shown that Big Daddy may be insane, as he turns his daughter into a murderous vigilante. He is merciless when dealing with criminals (even minor criminals) despite being a superhero. Hit-Girl has also brutally killed people with no mercy. Big Daddy also shoots his daughter in the chest twice to show her what it feels like. The film version of Big Daddy's mannerisms were based on Adam West's Batman. In the 2010 film adaptation, Damon (as Big Daddy) has stuck on facial hair to resemble a possible goatee with the chin hair removed, while Damon only has a small moustache..
After Dave Lizewski decides to become the superhero Kick-Ass, Damon and Mindy (Hit-Girl) also decide it is their turn to become heroes and fight crime, but unlike Kick-Ass, they kill their victims.
Big Daddy is later revealed to be delusional and a comic book fan, and the backstory given for his origin is false. His wife is still alive and he practically kidnapped Mindy to train her to be an assassin, justifying his actions by saying he wanted to make her life interesting. Taking on an organized crime family was justified simply by the fact that they "needed a villain."
Still, in spite of these delusions, Big Daddy did care for Hit-Girl and genuinely wanted her to be an effective force against crime, believing that taking away her childhood in the name of justice was perfectly acceptable.
In spite of being a former accountant, Big Daddy is shown to be a professional crime-fighter. Funding his crusade by selling comics and looting his victims, he has been training his daughter Hit-Girl to become a lethal vigilante. He himself is quite adept at handling firearms though most of the missions shown to the reader are mainly accomplished by Hit-Girl, with Big Daddy providing armed support as a sniper. It is revealed that he and his daughter have been living on the run for years under many false identities.
Mobster John Genovese was furious that his organization was being targetted and so he arranged for his son to become Red Mist, seemingly another superhero. They planned a double cross that led to Big Daddy's death, although Hit-Girl avenged him and, along with Kick-Ass, took down the organization.