Why Market Size Matters—and How Fundraising Differs in the US and Taiwan

Market Size Anyone who has pitched investors knows how much they care about market size. Unless you can explain that you are addressing a potential billion-dollar market, raising investment will be difficult. If you argue market size with an investor using spreadsheet figures, you have already lost. An early-stage company should never rely on quantitative analysis to estimate market size. Venture startups are targeting broad, long-term trends. Good investors understand that. A startup that fills a gap in a market will generally not change the world, although its founders can often achieve a smooth exit. You cannot make something good from poor ingredients. To deliver a home-run financial return to investors, a startup’s product needs a sufficiently large potential market. Pulling out a spreadsheet built on assumptions and guesses to show that the market is large enough is pointless and can destroy a founder’s credibility. Investors dislike hockey-stick curves based on unrealistic assumptions that do not match conditions on the ground. Yes, they want as much factual support as possible. They do not want blindly optimistic guesses presented as facts. #矽谷創業課 ---- Robin: “Market size matters because it sets the venture’s upper limit, or ceiling. A business with a low ceiling is unlikely to be favored in fundraising, especially when it also faces intense competition. Another key is knowing whom you are raising money from and the environment you are operating in. The composition of entrepreneurs and investors in the US is naturally different from Taiwan’s. It is not about better or worse, but about fit.” —Verification and attribution note— The post’s tag identifies the source as Tren Griffin’s 矽谷創業課. The book passage has not been compared word for word.