TAM SAM SOM

While trying to better understand the acronym TAM as investors use it, I ran across this:

https://www.thebusinessplanshop.com/blog/en/entry/tam_sam_so…

…snip…
TAM, SAM and SOM are acronyms that represents different subsets of a market.

TAM or Total Available Market is the total market demand for a product or service.
SAM or Serviceable Available Market is the segment of the TAM targeted by your products and services which is within your geographical reach.
SOM or Serviceable Obtainable Market is the portion of SAM that you can capture.

The SOM and SAM help de-risking the investment while the TAM enables to assess the upside potential.

…end snip…

The author says that once a business has proven it has met the SOM, the potential investor has evidence that the business is viable. Once the SAM is met, the investor can establish some baseline for ROI?

TAM allows the potential investor to evaluate the absolute size of the future ROI?

FWIW
Ralph

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