Definition
Bottom-Up Market Sizing
Estimating potential revenue based on customer count and pricing.
From the episode “Stop Building, Do This First”Hear it on the podcast1 episode
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Related terms in Startups & Fundraising
AntlerA global early-stage investor that backed Levelheaded.ARR (Annual Recurring Revenue)Annual recurring revenue. The annualized value of subscription contracts currently in force.Bookings vs. run rate vs. ARRBookings are contracts signed, run rate annualizes a recent period, ARR is recurring subscription revenue. They are not interchangeable.BootstrappedFunded entirely by the founder, no outside investment.Built to scaleSoftware plus the governance, permissions, security, and process needed for an organization to rely on it.Canada's Commercialization GapCanada invests approximately $53 billion annually in R&D — roughly $40 billion directly into universities and research institutions. The University of Toronto is credited as a birthplace of modern deep learning (Geoffrey Hinton's research, which contributed to TensorFlow and became the foundation of modern LLMs). But Canada commercializes only a small fraction of this IP compared to US peers; a single top US university may outpace the entire Canadian system. In the AI era, as software-as-moat disappears, deep IP becomes the only defensible competitive edge — making this commercialization gap strategically urgent.Cap TableThe record of who owns what slice of the company.Capital Efficiency (AI Era)The ratio of revenue generated to capital invested, as redefined by the AI-driven collapse in execution costs. Pre-AI, reaching $1 million ARR typically required $2-5 million in capital (engineering salaries, infrastructure, sales team). AI-native companies designed around the outcome-as-a-service model can now target $1 million ARR on less than $1 million in capital - a multiple that was structurally impossible before AI collapsed the labor cost of software execution. Infinity Constellation's portfolio benchmark: multiple companies reaching $1M ARR with teams of five or fewer in their first year. Capital efficiency in the AI era is therefore not just a financial metric but a proof point for the underlying model - if AI leverage is real, the unit economics should be visible in the revenue-to-capital ratio from the first year of operation.