Why Write a Sector Thesis?
A written thesis makes you a better investor. It forces clarity on what you’re looking for, helps you say no faster, and gives founders confidence that you understand their space. Founders prefer investors with a clear thesis over generalists.
The Template
1. Sector Overview
Write 2–3 paragraphs covering:
- What is this sector? (Define it clearly)
- Why is it exciting right now? (Macro trends, regulatory changes, tech shifts)
- India-specific dynamics (what’s different about this sector in India?)
2. Market Size
| Metric | Your Estimate | Source |
|---|---|---|
| Global TAM | ||
| India TAM | ||
| India SAM (your addressable slice) | ||
| Growth rate (CAGR) |
Pro tip: Bottom-up TAM calculation (# of customers × average revenue per customer) is more credible than top-down (“If we get 1% of a $100B market...”)
3. Value Chain Map
Draw or describe the value chain. Where does value get created? Where are the bottlenecks? Which layer has the most defensibility?
Example for EdTech: Content creation → Platform/LMS → Distribution → Assessment → Certification → Placement
4. Competitive Landscape
| Company | Stage | Model | Differentiation | Funding |
|---|---|---|---|---|
Map 5–10 companies. Note gaps in the map — these are your investment opportunities.
5. What I’m Looking For
- Stage: [e.g., Pre-seed to Seed]
- Business model: [e.g., SaaS, marketplace, API-first]
- Must-have signals: [e.g., technical founders, early revenue, India-first approach]
- Red flags: [e.g., no domain expertise, pure aggregator play, regulatory risk]
- Ideal ticket: [e.g., ₹10–25L]
6. Key Questions I Ask Founders
- Why is this problem uniquely solvable now?
- What’s your unfair advantage? (Team, tech, distribution, data)
- Who’s your ideal customer and how do you reach them?
- What does the unit economics look like at scale?
- What’s the biggest risk and how are you mitigating it?
7. My Edge
What unique value can I add to founders in this sector? Intros, domain knowledge, hiring help, customer intros, technical advice?