[lumost]

Here is where TAM starts to be a consideration. A company building 3D printed rocket engines can claim that the market is whatever size they want as they are not beholden to prove it for 5+ years. A company making a mobile blood tester isn't expected to have a working demonstration for 5+ years.

Compare this to a company with 600k in revenue, if they are in a competitive/small market - then this may mean a company which ultimately produces 100 million in revenue with 10-20 million in profit. Whereas the above two companies can pitch that they will eventually produce $BigNumber revenue with $HighProfit margins.

This scheme really only works when there is effectively infinite money floating around, and the opportunity cost of parking the money in a bad idea is low. I wouldn't expect a MagicLeap or Theranos to occur in any other environment.