That machine has four USB-A (USB 3.0) ports and two USB-C (USB 3.1 Gen 2, Thunderbolt 3, DisplayPort) ports.
This gives you a wide range of choices in external SSDs:
- USB 3.0 / SATA (cheapest, slowest)
- USB 3.1 Gen 2 / NVMe (probably the sweet spot in the market). These should be connected to your USB-C / Thunderbolt 3 ports, since your USB-A ports would limit transfers to USB 3.0 speeds.
- Thunderbolt 3 / NVMe (fastest, most expensive)
You can buy pre-assembled drives, or buy enclosures and internal SSDs and put the two together.
Your iMac does not support USB4 and is not compatible with USB4-only SSDs. (There are some USB4 SSDs that can fall back to other connection methods like USB 3.1 Gen 2. Those would be compatible, but their speed would be limited by whatever they and your computer both supported.)
As far as formatting goes,
- You should make sure that the SSD uses the GUID partition scheme.
- You should make sure that the SSD is formatted using APFS.
Many external SSDs come pre-formatted with NTFS (for use on Windows systems), and with them, a trip to Disk Utility to change the partitioning and formatting (wiping out everything on the new drive) should fix things so you can then proceed with putting Ventura and your data onto them.
Note: If you buy one of the small, credit-card-sized Crucial X9 Pro SSDs, make sure that you get the "for Mac" version. The "PC" version may need a firmware update before you use it as a Mac startup disk, and (Catch 22) Crucial only provides the firmware updater for use on Windows PCs.