25400 · Financial Literacy
Startups & ESG Investing
Week 10 moves from idea to company. It distinguishes a business model (how a firm creates, delivers and captures value, via the business model canvas) from a revenue model (how it earns money), builds customer personas, and sizes a market top-down through TAM, SAM and SOM. It maps startup financing stages (pre-seed to IPO) and common reasons startups fail, then introduces ESG factors — and the greenwashing/greenhushing pitfalls — in sustainable investing. This conceptual-plus-market-sizing material supports the individual analyst presentation.
What this chapter covers
- 01Business model vs revenue model; the Business Model Canvas and Value Proposition Canvas
- 02Customer personas: name, demographics, behaviours/motivations, goals, pain points, a first-person quote
- 03TAM = total customers × Annual Contract Value (ACV)
- 04SAM = serviceable-segment customers × ACV
- 05SOM = last year's market share × this year's SAM (nested: TAM > SAM > SOM)
- 06Startup financing stages: pre-seed → seed → Series A/B/C → IPO, and their typical investors
- 07Why startups fail (e.g. no market need, ran out of cash, wrong team)
- 08ESG factors, reporting-standard trends, and greenwashing vs greenhushing
Top-down market sizing with TAM, SAM and SOM
- +1TAM (Total Addressable Market) = total customers × ACV = 8,000 × $1,500 = $12,000,000. This is the whole market opportunity if every potential customer bought.
- +1SAM (Serviceable Addressable Market) = serviceable customers × ACV = 3,000 × $1,500 = $4,500,000 — the slice the business can actually reach given its resources.
- +1SOM (Serviceable Obtainable Market) = market share × SAM = 20% × $4,500,000 = $900,000 — the realistic near-term capture. The three nest as TAM ($12m) > SAM ($4.5m) > SOM ($0.9m), narrowing from the whole market to what this firm can win.
Key terms
- Business model
- The high-level plan for how a company creates, delivers and captures value — its target customers, value proposition, channels, cost structure and revenue model — often mapped on the Business Model Canvas.
- Revenue model
- The specific plan for how a company earns money (for example, one-off sales, subscription, advertising, or a mix). It is one component of the broader business model, and firms often combine several revenue models.
- TAM / SAM / SOM
- Nested market-sizing layers: TAM is the total addressable market (all potential customers × ACV), SAM the serviceable subset the firm can reach, and SOM the serviceable obtainable share it can realistically capture. Always TAM > SAM > SOM.
- Startup financing stages
- The funding ladder from pre-seed and seed through Series A/B/C to IPO, each raising capital for the next set of milestones from progressively later-stage investors (founders and angels, then venture capital, then growth/public markets).
- ESG investing
- Integrating Environmental, Social and Governance factors into investment decisions, alongside a trend toward consolidated reporting standards (such as the ISSB's) aimed at ending the fragmented 'standards zoo'.
- Greenwashing vs greenhushing
- Greenwashing is overstating or misrepresenting environmental credentials to look more sustainable than a firm is; greenhushing is the opposite — deliberately withholding ESG information to avoid scrutiny or accusations. Both distort what investors can see.
Startups & ESG Investing FAQ
What is the difference between a business model and a revenue model?
The business model is the whole plan for how a firm creates, delivers and captures value — customers, value proposition, channels, costs and how it makes money. The revenue model is just the money-collection part (sales, subscription, advertising and so on). A firm can keep one business model while mixing several revenue models.
How do TAM, SAM and SOM differ, and why do investors care?
TAM is the entire market opportunity, SAM the portion the business can serve with its resources, and SOM the share it can realistically obtain soon — each nested inside the last. Investors care because a credible, well-justified SOM shows you understand your reachable market, whereas a headline TAM alone signals over-optimism.
Why do most startups fail?
The most-cited reasons include building something with no real market need, running out of cash, having the wrong team, being out-competed, and pricing or product problems. The lesson the topic draws is to validate demand early and manage cash, and to learn from failure post-mortems rather than repeat them.
What is the difference between greenwashing and greenhushing?
Greenwashing overstates a firm's environmental credentials to appear more sustainable than it is, and regulators increasingly pursue it. Greenhushing is the reverse — staying quiet about genuine ESG activity to dodge scrutiny or accusations. Both reduce transparency and can mislead investors in different directions.
Assessment move
This week mixes qualitative frameworks with one key calculation, so split your preparation. For the frameworks, be able to explain the business-model-versus-revenue-model distinction, sketch the business model canvas, build a persona with its required fields, map the financing stages to their investors, and contrast greenwashing with greenhushing. For the calculation, drill TAM/SAM/SOM until the nesting and the ACV/market-share inputs are automatic, and be ready to justify each assumption. Since this material supports the individual analyst presentation, practise presenting a sized market crisply. Ask Sia to set a fresh market-sizing scenario and check your layers and assumptions.
Working through Startups & ESG Investing in 25400? Sia is AskSia’s AI Business and Economics tutor — ask any 25400 Startups & ESG Investing question and get a clear, step-by-step explanation grounded in how 25400 is taught and assessed. Read this chapter free, then take your hardest questions to Sia.
