Presenting market size

The market slide answers one question: how big can this company get if it works? Credibility comes from method, not magnitude. How you calculated the number teaches more than the number itself.

Walking through a pitch-ready line

From the CI analytics example:

There are ~18k mid-size eng orgs in the US/Canada. At our $173k ACV that is a $3.1B TAM. We can serve 7.5k with GitHub/GitLab coverage today ($1.3B SAM). Our five-year plan reaches 900 customers ($155M), about 12% of SAM.

That sentence has formula, filters and a SOM tied to a customer count. A "$50B TAM" from a Gartner pie chart has none of those.

Do this:

1. Show N customers × ACV = $ on the slide.
2. Cite the source for N and the date. "LinkedIn filter, March 2026" beats "industry research."
3. Use your price, or a named comparable within about 2×.
4. Nest TAM → SAM → SOM with one sentence of filters between each.
5. Tie SOM to the revenue and hiring plan. If SOM needs 200 AEs in year 3, say so.
6. For marketplaces and usage businesses, label GMV vs net revenue.

Avoid this:

• "$X billion, we need 1%" with no customer math.
• Inflating ACV with list prices you have never sold.
• Counting every human as a consumer TAM with no distribution.

Growing markets vs large ones

A large static market with entrenched incumbents can be worse than a smaller market growing 40%+ per year. Growth creates new buyers and new budget lines. When the market does not exist yet, size the adjacent spend you displace and the willingness to pay from design partners. Investors accept emerging markets. They do not accept hand-waving.

A $200M TAM with high gross margins and network effects can be fundable. A $5B TAM of low-margin services work may not be. Pair the number with the business model.

Common mistakes

• Leading with top-down. The pie chart cannot become next quarter's demo plan.
• Hiding the beachhead. A horizontal "everyone" TAM dies in GTM.
• Mixing GMV and net revenue on a marketplace slide.

Check yourself

1. What belongs on the slide besides the dollar figure? The formula, a dated source for N, your price, and the filters between TAM, SAM and SOM.
2. SOM is $500M and the year-5 model is $20M. What do you change? One of them. They must sit in the same order of magnitude.

Key takeaways

• Method beats magnitude. Show N × ACV, the source and the filters.
• SOM must match the financial plan and the hiring plan.
• Growing or emerging markets can beat large static ones. Say what spend you displace.
• First SAM should be painfully narrow even when TAM is global.

Further learning

Back to the map: market sizing.

Writing a Business Plan (Sequoia)Sequoia Capital’s original guide for how to write a business plan.sequoiacap.com Y Combinator LibraryYC's library of startup advice: essays and videos that teach you how to start a company.YC Startup Library