There are THREE different ways of estimating velocity.

• First, we can have HISTORICAL averages if we have them. But before using this average whether there have been significant changes in the TEAM, the nature of the project, the TECHNOLOGY, team, etc.
• Second, we can run a few iterations until we finalize on stable velocity (Pilot project).
• Third, we can forecast velocity by breaking a few stories into tasks and seeing how much it will take to complete an iteration. This process is very similar to iteration planning.

As this is the velocity of the first sprint so that will be rough estimate by the team based on the CURRENT knowledge on hand. They are just forecast not set in stone in any way.

Do not take this value as a commitment as this is just an estimate.

After 3-4 sprints team is mature enough to decide on the story points needs to be taken into consideration for the sprint, so even if we go wrong in the first sprint, next 3-4 sprint will give us correct data on velocity.

As shown in the figure below the average velocity is 30.5.