Market Size your Start-up using the VC Method

If you are a startup founder, why not show credibility in your pitches by triangulating your market sizing the method used by VC’s? 

Traditional Market Sizing by Startups: 

1. The Y Combinator (Large Number, Zero Context)

2. TAM, SAM, SOM (same as above but more numbers)

3. The Gartner (Largest number you can find in an analyst report, even if it is not from your market) 

Market Sizing by VC’s: 

1. Size of Largest Incumbent (What are their revenues, margins & valuations?)

2. Bottom Up Estimate (current pricing X # customers in target segment)

3. Latent Demand (future market can be much bigger than current market)

4. Adjacent Markets (Are their any larger adjacent markets to expand into?)