Time was, if you had at least a hundreds of millions of dollar market, or up to a billion dollar market in your pitch, that was enough to get you funding. But today, I've heard multiple times that even a billion isn't enough, let alone hundreds of millions. Venture funds are now looking for multiple billions, into the tens and hundreds of billions of dollars market.
Some might argue that VCs were always doing this - what's different now? Why is this important today?
Early stage venture funds are using this as filter. There are too many startups out there, so why not say no to everyone except those with a believable billions of dollars of market story? The implications of this are, the startups with smaller opportunities will find it hard, if not impossible, to get funding.
Startups don't realize the danger, and seed investors are starting to wise up. There are too many chasing after too small opportunities to be able to pass this filter. If you can't raise money, it may be that what you're working on is too small, even for a hundreds of millions of dollars opportunity.
Suppose you get to some impressive scale, like $1M+ in revenue run rate. As you go for the big round, the current crop of series A funds won't even touch you despite having strong revenue growth. If your market is small, so is your potential and your ability to "unicorn" is not all that great.
So if you're raising seed, I would figure out what it is you're doing if not a billions of dollars market and change it to be one. Investors are always searching for unicorns and it's best that you shoot for being one from the very start or else you may not get very far in your fund raise....