What is TAM? Perhaps, the biggest factor in whether a VC funds you or not. TAM = Total Available Market.
Note: Top Down TAM doesn’t matter. You need to present a Bottom-Up TAM Analysis.
And to get funded, that TAM needs to be very large. Billion. Two billion. Ten billion.
Few businesses have that kind of TAM.
So most likely, you are being turned down because VCs don’t think you have a large TAM.
There are many more $5 million, $10 million, $20 million business opportunities out there than billion dollar ones. Those don’t fit the VC model, but if you build a $5 million a year business that generates 30% profit year-over-year, what’s wrong with that picture?
This segment is a part in the series : Series A Crunch