VC case study question!!

Hi Everyone! I'm currently working on a VC case study where I have to come up with an investment memo for a SaaS company. The team sent over a bunch of data / info on the company, and one of the steps includes a TAM calculation. In the company overview deck, they included a SOM Calculation, that had the number of addressable firms and the annual contract value. The table then showed the SOM calculation which was taking a % of that TAM (so it showed like 5% capture, 10%, 15% capture etc.). My question is - can I use those numbers for my calculation? The # of addressable firms and the annual contract value? Or should I go out and come up with my own? I know this might be a dumb question but I'm very much not sure. Also, using those numbers gives a relatively low TAM of ~$700M. Thanks in advance everyone!!!

Most Helpful

You could, you can either take their TAM/SAM/SOM etc or you take the annual contract value multiplied by number of businesses or if its B2C take the yearly cost and users in their market. 

Either way a good rule of thumb is if its below $1bn probably not an exciting market to invest in, your also going to want to highlight other players if its Neobank for example if the company your looking at has maybe 1% of the market based on your TAM value you want to look at the other players such as  Revolut, Starling Bank etc and you want to compare what the market share of the opportunity is versus those huge players. 

All their looking for is whether your able to look at a market and make a recommendation based on all available data. it should be a go no go on a few things but you should mention the initial market they are in, how likely expansion is such as if its a french company trying to expand into Germany you can mention historically companies have struggled. 

hope this helps 

Dolorum in quas ea voluptatem architecto qui dolor. A eius et enim non. Neque distinctio incidunt nam modi quis qui suscipit. Quo reiciendis et voluptatem. Omnis quia cum odit. Quia voluptatem rerum natus exercitationem eaque. Et porro qui iste sapiente exercitationem.

Sed natus hic velit. Aliquam incidunt repellat harum rerum error consequatur. Aperiam nostrum fuga quas voluptas consequatur. Blanditiis assumenda perferendis officiis. Animi possimus facere consectetur ut ex enim. Deleniti quam nihil unde magni nihil.

Career Advancement Opportunities

September 2023 Investment Banking

  • Jefferies & Company (==) 99.6%
  • Lincoln International (==) 99.1%
  • Lazard Freres (++) 98.7%
  • William Blair 12 98.2%
  • Financial Technology Partners 02 97.8%

Overall Employee Satisfaction

September 2023 Investment Banking

  • William Blair 04 99.6%
  • Lincoln International 11 99.1%
  • DC Advisory 05 98.7%
  • Canaccord Genuity 17 98.2%
  • Jefferies & Company 04 97.8%

Professional Growth Opportunities

September 2023 Investment Banking

  • Lincoln International 01 99.6%
  • Jefferies & Company 01 99.1%
  • Financial Technology Partners 07 98.7%
  • Lazard Freres 15 98.2%
  • UBS AG 16 97.8%

Total Avg Compensation

September 2023 Investment Banking

  • Director/MD (6) $592
  • Vice President (33) $392
  • Associates (159) $260
  • 3rd+ Year Analyst (14) $187
  • 2nd Year Analyst (101) $169
  • 1st Year Analyst (306) $167
  • Intern/Summer Associate (48) $167
  • Intern/Summer Analyst (224) $94
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”