TAM

TAM (Total Addressable Market) is the total revenue opportunity available in a market — how much money is spent by all potential customers on solutions to the problem a startup is solving. VCs typically want to see TAMs of $1B+ for a company to have potential for venture-scale returns. Three approaches to calculating TAM: top-down (start with industry data and estimate addressable portion), bottom-up (count potential customers × average revenue per customer), and value-based (estimate the total value created for customers). Beyond TAM, investors evaluate SAM (Serviceable Addressable Market — the portion you can realistically reach) and SOM (Serviceable Obtainable Market — the portion you'll actually capture). Presenting a credible, specific TAM analysis is more impressive than citing broad industry reports.