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50 questions: How does a VC estimate market size?

By on March 23, 2011
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Together with Nic Brisbourne of The Equity Kicker / DFJ Esprit, I am writing a series of 50 questions you should ask when raising venture capital. We expect the series to run for a year, after which we will collate the answers into a book. We view this as a collaboration, so please comment to help make this series even more useful.


Many entrepreneurs are surprised by how much attention VCs pay to market size. You might have a hot product and an awesome team, but the VC is spending all of her time poring over analyst reports trying to work out how big your addressable market can be.

In this week’s post (#16 in the series), Nic explains the different ways in which a VC estimates market size, and why it matters for your business.

Hungry for more? Go to the 50 questions homepage for more insights into venture capital.

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: thecurveonline.com