VC Minute
VC Minute
Edited 3. Market Sizing - 3:31 feat. Justin Izzo from Dropbox DocSend
Text your thoughts directly to Rich.
Market sizing should articulate how you see the market, showing that you understand your target market and can focus on it.
About Justin Izzo
Justin is the Lead Data and Trends Analyst at Dropbox Docsend and trusted insights professional with 15+ years of research and leadership experience. He is the driving force behind DocSend's pitch deck metrics and annual slide-by-slide analysis reports, also hosting pitch deck teardowns to provide founders with actionable next steps. Justin loves designing research and strategies that leverage his unique Ph.D. background in the humanities and social sciences. He has an expert understanding of narrative, language, and culture coupled with a talent for deriving human insights from the social world.
LinkedIn: https://www.linkedin.com/in/justin-izzo/
About DocSend
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AVL Growth Partners, founded in 2009, is the leading fractional Finance and Accounting firm supporting organizations in pivoting from growth to scale. AVL brings an experienced team of CFOs, Controllers, and Accountants to your organization, delivering transparent, strategic actions for short and long-term success. Transform your financial approach affordably with AVL, supporting companies coast to coast - get to know AVL Growth Partners at avlgrowth.com. (Sponsored)
About SpringTime Ventures
SpringTime Ventures seeds high-growth startups in healthcare, fintech & insurtech, and logistics & supply chain. We look for founders with domain expertise, forging a path with a truly transformative technology. We only invest in software-based businesses in the USA. We bring a people-focused approach, work quickly, and reach conviction independently. Our initial check size is $600k. You can learn more about us and our approach.
Market sizing touches founders at many different levels, from those who haven't yet raised to those who are. On their way to a Series A. I just recently advised a founder who has been very successful, multiple exits, on a market size section that I found wasn't as tightly structured as it could have been. So the advice that I have here, is something that I've been seeing a lot of recently, but I think it's transcended. one thing that many founders. Neglect to do, and this goes back to the critical distancing point I made, in the previous episode is To display your thinking very clearly and to show that you have not only understood the assumptions that you are making about your market, but that you have understood how to communicate those assumptions to folks who are reading your pitch deck. if I'm an investor, and when I do angel invest, when I've worked with VCs on, panels, on projects, the first thing they're picking apart, are not necessarily the numbers being articulated on a pitch in a market sizing section. Is this TAM big enough? Sure, people, will quibble about these kinds of questions. but it's really how are these founders thinking about their markets? how are they whittling it down into an addressable market that they can go after? Where are these numbers coming from? All too often founders take for granted that investors or pitch deck readers will just Believe them and trust them. and while I want that to always be the case, no investor worth their salt is going to blindly trust, the market size of a founder they don't necessarily know, who has nothing cited on their market size slide and hasn't clearly communicated what those assumptions for example, I saw an AI related pitch deck that. On one slide mentioned they were going after marketers, and then on their market sizing section, their sort of highest category, their broadest category, of their broadest possible market was design professionals, and having read through that pitch deck, I said, Does this market actually match with the kinds of folks you're going after? And you're not showing me within this market sizing section, how you're actually arriving at the folks you're really trying to sell to, All too often founders aren't laying bare what I call the architecture of their thinking, especially on slides like market sizing, because a lot of assumptions go into this. A lot of research on the founders part goes into a slide like this, that kind Paradoxically, needs to be very snappily and concisely communicated. on the one hand, founders need to strike several kinds of balance here. They need to, communicate their market sizing in ways that can be immediately understandable, to investors who aren't spending much time understand, or reading through these decks. On the other hand, founders need to show that the assumptions behind their thinking are robust. that they've put thought into this and that their numbers are real. one thing I always advise founders to do is to have a little source site section, have it in unobtrusive, language at the bottom of a slide or source in appendix. Have a link that takes you to an appendix at the back of the deck, for any interested party to go and verify, and understand what's going on. Where these numbers are coming from. It's a very quick fix that I think can go a long way towards showing investors, not just what your assumptions are for building on a market slide, that's one level of the process, sure, but it's also showing investors how you think and, At the very earliest stages, especially VCs and any kind of investor, they're as interested in how you think as they are in the immediate problems you solve, because they understand that these will pivot over time, and they're betting on teams that can pivot their thinking to solve problems as they emerge, and the more you can show, rich and robust thinking, communicated very concisely, the better off you're going to be.
