Muschamp Rd

The Importance of Market Size

May 16th, 2007
Market Share Graph

Although I try not to just reblog, especially not when I’m on a tight time schedule, over at one of the blogs I’ve been following regularly is a post about how market size is one of the key factors in determining whether VCs will invest in a venture.

Considering that venture capital, especially spreadsheets for determining valuations is one of the things people still come to my blog looking for, I thought hearing the truth from another more reputable source might help it sink in.

The three most important things VCs look for once again are:

  1. High Quality Team
  2. Market Size (Attractiveness)
  3. Sustainable Competitive Advantage

Although I haven’t been following it so closely of late, it seems at all times there are questions on LinkedIn Answers about how to get VC funding, or how VCs work, or how to contact VCs. Before doing any of those things, before writing your business plan, make sure you have a really good team, an attractively large market, and if possible a sustainable competitive advantage.


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