🧠 What investors actually mean by “big market”

Here’s a three-part framework for what investors are actually looking for in a pitch: a Credible Theory of Hugeness.

Hey friend 👋

Most founders think fundraising is about pitching a billion-dollar vision. But investors don’t fund visions — they fund credible paths to them.

So today, I’m introducing something I call the Credible Theory of Hugeness (CTH) — a three-part framework that helps first-time founders understand what venture investors are really looking for when they say “big market,” and how to actually earn their belief.

But having a CTH isn’t just important for fundraising.

It’s important because it’s how founders:

• bag awesome co-founders and advisors;

• place smart bets that don’t waste time and capital;

• think about tracking progress and measuring what matters;

• and more.

In short? It’s how smart founders “think” about their startups.

You need one, so let’s dive deep 👇

PS: I’ll be live right here on Substack Friday at PT to take your questions and talk startups.

Let’s talk about the Hugeness Delusion.

Let’s be honest: most founders believe that if they pitch something huge — some world-dominating, category-defining, VC-salivating vision — the money will flow.

Spoiler: it won’t.

Because potential without evidence is just a fever dream in a pitch deck.

What investors are actually looking for isn’t just the theoretical ability to scale. It’s a believable, evidence-backed path to it. They’re trying to answer one simple question:

If this works, could it be huge?

And more importantly:

Is there a credible reason to believe it will?

This is where most founders get it backwards. They obsess over defining a giant TAM — “if we only get 1% of this…” — instead of building the foundation that makes hugeness feel inevitable.

So let’s fix that.

My solution? The Credible Theory of Hugeness — a three-part framework for making your startup look not generically ambitious, but actually investable.

It’s 3 words, and we’ll take them in reverse order:

Hugeness: You need a massive (and growing) pool of potential customers with a severe, urgent problem that you can solve.

Theory: You’re not huge yet, so how are you going to get there? You need a compelling value prop for an early adopter that you can efficiently get in front of in a way that captures value.

Credibility: You can’t just pull that theory out of your ass. No one invest in an idea. You need to be able to show that this theory is right because the timing and team are right, the model is defensible, customers are saying yes, and so forth.

And that’s it. That’s all a startup is.

In the early days, your theory and credibility are pretty freaking thin. But as you discover and acquire validated learning, they get progressively thicker — at the same time.

Theory and credibility are co-created, in real time, in the market.

Before I talk about how to do that, let’s dive into hugeness:

Part 1: Hugeness — is this even worth exploring?

Let’s get one thing straight: venture capitalists don’t fund good ideas — they fund huge opportunities.

They’re not looking for efficiency. They’re looking for inevitability at scale. So yes, hugeness matters. But most founders completely misread what that means.

They slap a slide in the deck that says:

“TAM: $47B and growing.”

And they think that’s the hugeness checkbox ticked.

But investors aren’t funding markets. They’re funding paths through them. A big TAM is table stakes — it’s the start of the conversation, not the end of it.

Here’s what hugeness actually needs to signal:

• There’s enough market gravity to justify a moonshot. If everything goes right, this could be really big—and the investor gets their fund-returning win.

• You’re starting in a credible, compelling niche. Hugeness starts small. You need a wedge—a painful, underserved segment you can dominate now.

• The market is dynamic, not static. Investors don’t just want a big pond. They want a rising tide: growing demand, shifting behaviors, unmet needs, macro tailwinds.

• You don’t just have a product—you have a play. Hugeness isn’t a static number—it’s a theory in motion. What makes this small thing turn into something unstoppable?

In other words: hugeness without a plan is just posturing.

investors require an outsized return on investment to cover all of the risk in their portfolio.

They’re not looking for a 15% return on a $50k check.

They’re looking for a 1000% or 10,000% return!

The only way you can deliver that kind potential is to scale massively, and exit — i.e. acquisition or IPO.

In other words, in order to attract venture capital:

You need to be in a large and growing market.

It’s not enough for the market to be big. It also needs to be getting larger. You want to catch the wave before it crests.

But the market isn’t the only thing that should be big.

You also need to be tackling a big problem — one with high severity and urgency.

Once you have the opportunity, you need at least a theoretical means of seizing it: a product you can easily replicate and scale to meet the needs of that market, which is truly differentiated and solves a problem that customers are willing to pay to have solved.

But that’s still not enough.

That market, with those customers, also needs to be something you as a founding team are particularly well-suited to tackle — aka founder/market fit.

With that, you can potentially get huge, but you’re not huge yet, so:

Part 2: Theory — do you have a path to get to hugeness?

If hugeness is the destination, then theory is the map — the logic, the scaffolding, the “here’s how we get from Point Boring to Point Billion.”

The best theories of hugeness aren’t hand-wavy visions. They’re specific, testable, and built on a clear understanding of what the early adopters need right now, and how that expands over time into something much bigger.

A theory of hugeness should make your startup’s scale feel inevitable.

Not guaranteed, but plausible, logical, and compounding.

The investor doesn’t need to believe in your dream. They need to see the physics of how it might work.

At the core of that theory are three ingredients:

• Go-to-market strategy: Who are you targeting first, and how will you reliably reach, convert, and retain them? Hugeness doesn’t begin with everyone — it begins with an early adopter who is specific, desperate, and reachable.

• Business model: How do you make money now, and how does that expand or multiply over time? The best theories of hugeness aren’t about explosive scale instead of revenue — they’re about growth because of it.

• Expansion thesis: What makes the next 10x growth obvious? What adjacent market, channel, product layer, or platform play gets unlocked if the wedge works? You don’t need to be there yet — but you need to know where “there” is.

The test: if you vanished today, could someone else take your roadmap and build a massive business with it? If yes, you’re not just selling a story — you’re laying out a theory of inevitable hugeness.

But… you can’t just pull that theory out of your butt. It needs to be credible:

Part 3: Credibility — do you have the receipts?

This is where most startup narratives crumble: they try to sound confident instead of showing credibility.

They try to sell, instead of show.

But if you want to raise money, you need to give investors something they can trust — something that says this team gets it, and this thing could actually work.

Enter: The 8 Ts of Credibility.

These are the receipts. They’re not vanity metrics. They’re not theatrics. They’re real signals that show you’re ready for the next stage of the journey:

1. Team – You have a passionate, skilled team who can take this where it needs to go. No tourists. Definitely no tourists with egos.

2. TAM – You’re playing in a large and growing market with a well-defined niche you can own. Bonus points if it’s expanding while your competitors are napping.

3. Timing – Your market conditions show it’s go time. The world is changing, and you’re catching the wave — not paddling 20 feet behind the crest.

4. Technology – You’ve built something that works (even if it’s just a prototype), that defends itself, and that shows you can actually execute.

5. Terms – You’re offering investment terms that show readiness: a clear use of funds, a milestone you’ll reach, and a timeline that makes sense. This isn’t charity, it’s a bet — make it easy to place.

6. Traction – You’ve got real signals from the market that the pain is severe, the problem is real, and people want your solution. It’s not about scale — it’s about the signals that it’s inevitable.

7. Theory – You have a compelling value proposition for an early adopter you can easily find and serve in a way that actually makes money. It’s not everyone. It’s someone specific — right now.

8. Tracking – You know your numbers, and they’re the right ones for this stage. You’re focused on validation and growth, not fluff and follower counts.

I’ve talked about the 8 Ts before.

And no one needs straight As in all eight to be fundable. But you do need enough to show that your theory of hugeness isn’t built on a foundation of daydreams and hot air.

Make your growth seem inevitable.

While everyone wants to appear further along than they are, your startup doesn’t actually need to be huge yet.

What investors want to know is whether it could be — and whether you’re the team who can get it there.

That’s where the Credible Theory of Hugeness comes in.

It’s not just a cute framework. It’s the reality check most founders need:

• Hugeness still matters — but only if you understand what it actually signals.

• Theory is the bridge between where you are now and the scale investors care about.

• Credibility is what makes that theory investable — what turns a story into a strategy with receipts.

Put it all together, and you’re not just pitching a dream.

You’re making it feel inevitable.

And that’s the difference between getting a polite “come back later”… and getting a term sheet.

So stop trying to point at a huge market.

Start trying to define a credible path to get there.

Because in the end, credibility compounds — and so does delusion.

See you next week,

—jdm