Below you’ll find my high-level guidance on the market size pitch deck slide. Scroll to the bottom to jump to a different slide or download our free workbook.
It should come as no surprise that investors want to see a large, growing market. As Harry Stebbings of 20VC once said:
“A massively growing market can cover a lot of operational sins.”
However, it is critical not to exaggerate the total addressable market (TAM). If you operate a pet grooming company, your TAM is the total pet grooming industry, not the $222.93 billion global pet industry. Using numbers like that makes you look naive at best and untrustworthy at worst.
Don’t reinvent the wheel here. It is best to use the default TAM / SAM / SOM model:
Total Addressable Market (TAM)
The total revenue opportunity available for your product or service, assuming 100% market penetration. It represents the upper limit of the market potential. To calculate TAM, you can use a top-down approach (industry reports, market research) or a bottom-up approach (number of potential customers multiplied by the average revenue per customer).
It’s wise to also include the compound annual growth rate (CAGR) of the industry to show the growth potential over the next decade. Much of this information is publicly available and can be found through a Google search.
Serviceable Addressable Market (SAM)
The segment of the TAM that your startup can realistically serve, considering factors such as geographical location, target customer demographics, and competition. SAM is the portion of the market that your product or service can directly address and is a more accurate reflection of the opportunity size.
Serviceable Obtainable Market (SOM)
The share of the SAM that you realistically expect to capture within a certain timeframe, usually 3-5 years. This takes into account factors such as your go-to-market strategy, competitive landscape, and available resources. SOM is a critical number for investors as it indicates the near-term revenue potential.
- TAM - How large is the entire market?
- Include compound annual growth rate (CAGR)
- SAM - How large is the market that you could realistically capture if everything goes perfectly?
- SOM - How large is the market that you hope to capture in the near-term?
- Over what time period do you plan to capture this market?
- Remove or explain company jargon
- Adequately describe the initial target customer
There you have it: My high-level advice for the market slide in your pitch deck. If you’re looking for slide-by-slide guidance, jump to any section below.
Pitch Deck Guidance Glossary
- How to Pitch to Investors
- Cover Slide Pitch Deck
- Problem Slide Pitch Deck
- Solution / Product Slide Pitch Deck
- Traction Slide Pitch Deck
- Business Model Slide Pitch Deck
- Go To Market Slide Pitch Deck
- Competition Slide Pitch Deck
- Team Slide Pitch Deck
- Ask Slide Pitch Deck
- Closing Slide Pitch Deck
Free Pitch Deck Workbook
We’re excited to share the release of The Founder’s Pitch Deck: a workbook-style Notion template with slide-by-slide guidance and inspiration.
Here’s what’s included:
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2. A built-in note-taking system to capture your ideas and inspirations.
3. An automation feature that presents you with a summary of your notes, ready for your pitch.
4. A selection of customizable Canva slide templates to create visually stunning presentations.
5. A comprehensive Notion database to keep track of your fundraising journey.
We want to get your company backed by the right people, so we’re making this resource completely free. Click here to download it from Gumroad.
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