How to Calculate Market Size Bottoms-Up (With Real Examples)
The most credible way to calculate market size for a pitch deck is the bottom-up method: multiply the number of potential customers you can reach by what you charge each one. VCs dismiss top-down estimates from analyst reports because they're inflated and show no understanding of your actual customer base.
TLDR:
Bottoms-up market sizing means counting your actual target customers and multiplying by a realistic price point.
It's the only approach VCs take seriously.
Define your customer precisely, count them using real data sources, determine what they'll pay based on actual conversations, and show your math.
This post walks through the framework and shows you exactly what good and bad market sizing looks like.
Last Updated: February 2026
If you read my last post on TAM, SAM, and SOM, you know that top-down market sizing destroys your credibility with VCs. Citing a big number from an analyst report tells investors nothing except that you know how to use Google.
Bottoms-up market sizing is the opposite. It starts with your specific customers and builds up. It's harder to do, but it's the only approach that makes VCs believe your numbers. Here's exactly how to do it.
The Bottoms-Up Framework
Step 1: Define your target customer precisely. Not "businesses" or "enterprises," but the specific type of business in the specific situation where your product provides value. Instead of "restaurants," you want something like "fast-casual restaurants in the US with 2-10 locations, $1-10M in annual revenue, using at least one third-party delivery platform." The more specific you are, the more credible your numbers become.
Step 2: Count the customers. How many of these specific customers exist? Use real data sources like industry associations, government statistics, competitor disclosures, or your own research. For example: "According to the National Restaurant Association, there are approximately 28,000 fast-casual restaurants in the US with 2-10 locations." Always cite your source.
Step 3: Determine realistic price point. What will these customers actually pay for your solution? This should come from customer conversations, competitor pricing analysis, or early sales data. "Based on pricing conversations with 40 restaurant operators and analysis of competitor pricing, we project an average annual contract value of $6,000 for our core product." Note how the validation method is included, because VCs will ask where you got that number.
Step 4: Calculate SAM. Multiply customers by price. 28,000 target restaurants × $6,000 ACV = $168M SAM for your initial segment. Show your math on the slide.
Step 5: Define expansion path to larger TAM. Show how you'll expand the market over time through new segments, geographies, or products. "As we expand to full-service restaurants (180,000 establishments) and add catering management functionality ($12,000 ACV), our TAM grows to $2.5B." This shows VCs you're thinking strategically about market development, not just hoping your initial segment is big enough.
What Bad Market Sizing Looks Like
Here's an example I saw variations of hundreds and hundreds of times:
"The global sales enablement market is projected to reach $7.3B by 2028 (Markets and Markets). With the rise of remote selling, this market is experiencing rapid growth."
This fails for multiple reasons. There's no specificity about who the customer actually is. The massive market number has no clear connection to what the product does. There's no indication of realistic market share. And it relies entirely on third-party projections that the founder probably doesn't fully understand.
What Good Market Sizing Looks Like
Same product, better approach:
"Our initial market is mid-market B2B SaaS companies ($10M-$100M ARR) with sales teams of 10-50 reps. There are approximately 8,500 companies in this segment (based on SaaStr data and LinkedIn Sales Navigator filtering). Our pricing of $150/rep/month yields a $76M SAM. As we expand to include enterprise and add manager analytics, our TAM reaches $800M."
This works because it has a specific customer definition that I can visualize. The market is countable with clear methodology. The price point is supported by what's typical for the segment. And there's a logical expansion path that makes the larger number feel earned rather than invented.
The numbers feel real because the founder clearly did the work.
How to Present This on Your Slide
The classic TAM/SAM/SOM nested circle diagram is fine, but it's often used lazily. If you use circles, make sure the accompanying text explains your methodology because the visual alone isn't enough.
A better approach is to show the calculation directly on the slide: "45,000 target customers × $15,000 ACV = $675M SAM." This explicitly demonstrates bottoms-up thinking and invites questions about your methodology, questions you should be prepared to answer confidently.
You can also show how your addressable market grows as you execute: "Year 1: SMB segment ($200M) → Year 2: Add mid-market ($800M) → Year 3: Add enterprise features ($2B)." This shows strategic thinking about market development.
Defending Your Numbers in the Meeting
Your market size slide will be questioned. For every number on your slide, you should be able to explain the data source and its credibility, your calculation methodology, and the assumptions you made and why they're reasonable.
VCs will push back on customer counts. "You say there are 45,000 target companies, but how do you know?" Have specific sources ready: LinkedIn Sales Navigator data, industry association reports, government statistics, competitor disclosures.
They'll also push back on price point. "How do you know companies will pay $15,000 per year?" The best answer references actual customer conversations, LOIs, or early pricing tests. Second-best is competitive pricing analysis. Weakest is "that's what we think we can charge."
If you can't explain where a number comes from, don't include it. Nothing damages credibility faster than saying "I think we got that from a report somewhere."
NEED HELP WITH YOUR MARKET SIZING?
Book a diagnostic sprint and we'll build your bottoms-up market size together with numbers VCs will actually believe. See our services at www.decktovc.com/services
Download the VC-Ready Pitch Deck Template
12 slides built by a former VC principal, with coaching tips on every slide. Used by pre-seed and seed founders raising their first rounds.
KEY TAKEAWAYS
Bottoms-up market sizing formula: Number of target customers × realistic price point = SAM. Always show your math.
Define your target customer with extreme specificity, not "businesses" but the exact type, size, and situation where your product provides value.
Count customers using real data sources like industry associations, government statistics, LinkedIn Sales Navigator, or competitor disclosures.
Price points should come from actual customer conversations or competitive analysis, not guesses.
Every number on your slide should have a defensible source and methodology you can explain when VCs push back.
Vicki Politis
Founder, DeckToVC · Former VC Principal
Vicki spent 7 years as a Principal at a $400M European VC fund reviewing thousands of pitch decks. She's a Managing Director at Golden Seeds and taught venture capital at Yale. Her clients have raised $17M+ across 15+ rounds. Work with Vicki →
Want expert eyes on your deck?
Book a free 15-minute diagnostic. I'll tell you exactly what's working and what's not.
Book Free Diagnostic Download Free Template