Market Sizing Calculator

MARKET SIZING FUNDAMENTALS

When & Why to Size Markets

MARKET SIZING OVERVIEW

WHEN TO SIZE MARKETS:
☐ Fundraising - Investors want to see large TAM
☐ Strategic planning - Understand opportunity
☐ New market entry - Evaluate expansion
☐ Product decisions - Prioritize investments
☐ Board presentations - Communicate opportunity

MARKET SIZING APPROACHES:

TOP-DOWN:
Start with industry data, apply filters
Pros: Quick, uses existing data
Cons: Can be inaccurate, too optimistic
Best for: Initial estimates, fundraising

BOTTOM-UP:
Build from customer-level data
Pros: More accurate, defensible
Cons: Time-consuming, data-intensive
Best for: Validation, business planning

BEST PRACTICE:
Use BOTH methods and triangulate

---

TOP-DOWN METHODOLOGY

Top-Down Market Sizing

TOP-DOWN CALCULATION

STEP 1: TOTAL INDUSTRY SIZE
Industry: _______________
Total industry size: $_______________
Annual growth rate: ____%
Source: _______________
Year: _______________
Confidence: High / Medium / Low

STEP 2: SEGMENT FILTERS
Apply filters to reach our market:

Filter 1: Geography
☐ Global → Target regions
% applicable: ____%
Result: $_______________

Filter 2: Company Size
☐ All companies → Our ICP size
% applicable: ____%
Result: $_______________

Filter 3: Industry Vertical
☐ All industries → Our target verticals
% applicable: ____%
Result: $_______________

Filter 4: Use Case
☐ All use cases → Our specific use case
% applicable: ____%
Result: $_______________

STEP 3: CALCULATE MARKETS
TAM (Total Addressable Market):
= Industry × [relevant filters]
= $_______________

SAM (Serviceable Addressable Market):
= TAM × [further constraints]
= $_______________

SOM (Serviceable Obtainable Market):
= SAM × [realistic capture rate]
= $_______________

ASSUMPTIONS LOG:
1. _______________
2. _______________
3. _______________
4. _______________

Top-Down Data Sources

Source	Use For	Quality	Cost
Gartner	Tech markets	High	$$
IDC	Tech markets	High	$$
Statista	General markets	Medium	$
IBISWorld	Industry data	Medium	$
Government stats	Demographics	High	Free
Industry reports	Specific verticals	Varies	Varies

---

BOTTOM-UP METHODOLOGY

Bottom-Up Market Sizing

BOTTOM-UP CALCULATION

STEP 1: DEFINE CUSTOMER UNIVERSE
Criteria for ideal customer:
☐ Industry: _______________
☐ Company size: _______________
☐ Geography: _______________
☐ Other: _______________

Data sources:
☐ LinkedIn Sales Navigator
☐ ZoomInfo/Clearbit
☐ Industry databases
☐ Government registries

Total companies matching criteria: _______

STEP 2: IDENTIFY BUYERS WITHIN COMPANIES
Decision makers per company: _______
Influencers per company: _______
Total buying centers: _______

STEP 3: ESTIMATE PURCHASE PATTERNS
% of companies that would buy: ____%
Reasoning: _______________

Average contract value (ACV): $_______
Basis for ACV: _______________

Purchase frequency: _______________
☐ One-time
☐ Annual
☐ Multi-year

STEP 4: CALCULATE MARKET SIZE

FORMULA:
Market Size = Companies × Penetration × ACV × Frequency

CALCULATION:
_______ companies
× ____% penetration
× $_______ ACV
× _______ frequency
= $_______ market size

STEP 5: VALIDATE
Top-down estimate: $_______
Bottom-up estimate: $_______
Variance: ____%

If variance >25%, investigate:
☐ Are filters correct?
☐ Is ACV realistic?
☐ Is penetration rate reasonable?

Customer Count Worksheet

CUSTOMER COUNT ANALYSIS

SEGMENT 1: _______________
Number of companies: _______
Average ACV: $_______
Segment value: $_______

SEGMENT 2: _______________
Number of companies: _______
Average ACV: $_______
Segment value: $_______

SEGMENT 3: _______________
Number of companies: _______
Average ACV: $_______
Segment value: $_______

TOTAL MARKET:
Total companies: _______
Weighted avg ACV: $_______
Total market: $_______

---

SENSITIVITY ANALYSIS

Market Size Sensitivity

SENSITIVITY ANALYSIS

VARIABLE: Penetration Rate
| Penetration | Market Size | % Change |
|-------------|-------------|----------|
| 5% | $ | -50% |
| 10% (base) | $ | Base |
| 15% | $ | +50% |
| 20% | $ | +100% |

VARIABLE: Average Contract Value
| ACV | Market Size | % Change |
|-----|-------------|----------|
| $10K | $ | -50% |
| $20K (base) | $ | Base |
| $30K | $ | +50% |
| $50K | $ | +150% |

VARIABLE: Total Addressable Companies
| Companies | Market Size | % Change |
|-----------|-------------|----------|
| 5,000 | $ | -50% |
| 10,000 (base) | $ | Base |
| 15,000 | $ | +50% |
| 20,000 | $ | +100% |

KEY SENSITIVITIES:
Most sensitive variable: _______________
Confidence range: $_______ to $_______

---

PRESENTATION FORMAT

Market Size Summary Slide

MARKET SIZE SUMMARY

[COMPANY NAME] MARKET OPPORTUNITY

TAM: $___B
"Total market for [category]"

SAM: $___M
"[Geographic/segment] market we can address"

SOM: $___M
"Realistic capture in [timeframe]"

METHODOLOGY:
[Top-down / Bottom-up / Both]

KEY ASSUMPTIONS:
1. _______________
2. _______________
3. _______________

GROWTH DRIVERS:
☐ _______________
☐ _______________
☐ _______________

SOURCES:
☐ _______________
☐ _______________

---