“Success or failure in business is caused more by the mental attitude even than by mental capacities.”
Venture capitalists and other savvy investors always want to know how big your market is. Since if the market is too small, your company will not be able to grow adequately for the VC to eventually get a sizable return on their investment.
There are two ways to size your market.
One way is the top down analysis. With this method, you say (using market research) that your market is, let’s say, a $50 billion market and we think we can obtain 5% of it over time. The problem with this method is that VCs often have a hard time believing such claims.
The better type of analysis is a bottoms up market analysis. Bottom up means that you forecast the number of sales you think you can generate each period (month/quarter year) and the demographics of those who will purchase from you (e.g., show how many people have a strong need for the problem your solution solves).
The bottoms up method is required to build your financial model and is best suited to convince venture capitalists to fund you.
Forget Old School!
The “old-school” way of raising venture capital is DEAD!
And that’s why I created this page for you… to show you how to do it right.
There’s a common mistake almost every entrepreneur makes… and if you approach venture capitalists like most entrepreneurs, you’ll NEVER get funded.
Today’s Question: What did All Nippon Airways do in an effort to prevent its planes from sucking birds into their engines?
Previous Question: Eighty-seven-year-old Democrat Rebecca Latimer Selton held what distinction in the political arena?
Previous Answer: She was the first woman to become a U.S. Senator.
Rebecca Latimer Selton was appointed by the governor of Georgia to serve the remaining day of a vacated Senate seat, November 21-22, 1922.
Join our Tip of the Day
To get Growthink’s Tip of the Day delivered to your email inbox, enter your information below: