Financial Projections in Pitches

Big visions require solid numbers. But numbers alone won’t win trust. You need projections that show both growth and security. Here’s how you can craft financial projections that inspire confidence: 💡 Start with Realistic Assumptions. Investors can spot overly optimistic projections. Ground your estimates in current market trends and reliable data. 💡 Highlight Key Metrics. Revenue, profit margins, and cash flow are non-negotiables. Focus on the numbers investors care about. 💡 Create a Detailed Cash Flow Forecast. It shows how you manage expenses and ensure liquidity. This reassures investors about your financial control. 💡 Include Multiple Scenarios. Show the best, worst, and expected cases. This proves you've thought through uncertainties. 💡 Be Transparent About Assumptions. Break down your assumptions clearly. Transparency builds trust. 💡 Plan for the Long Term. Don’t stop at a year or two. Show five-year projections to prove sustainability. 💡 Use Visuals. Presenting your financials through graphs and charts makes them easier to digest. Share this with someone preparing their pitch for investors. P.S. Investors want security with potential. Make sure your numbers tell that story. #financialprojection #fundraising #investorpitchdeck #financials #pitchdecks

Most of Pre Seed financial projections will turn out to be wrong. But here’s what investors are looking for when analysing them: 1️⃣ FEASIBLE ASSUMPTIONS. If you scale your marketing budget, this should be accompanied by a projected increase in forecasted revenue, realistically apportioned. It would be bold to say tripling your marketing spend will result in 3x revenue increase. Your sensitivity analysis must be sound & reasonable. 2️⃣ REALISTIC PROJECTIONS. Turning a profit in your 1st year of operations is hard. You will most likely be loss-making and your biggest expense category is likely to be product development. 3️⃣ IN LINE WITH INDUSTRY BENCHMARKS. SaaS, when done right, is a fantastic model delivering >80% gross margins & NDR >100%. It should also have a healthy Current Ratio of about 1.5 to 2. 4️⃣ FOUNDER SALARIES. It is okay for your early staff to be paid more than you. You, as a founder, have the upside of being a majority shareholder. And if you want to attract top talent, you have to show them you value them. Above all, Investors will want to see a clear breakdown of the assumptions and drivers behind your financial projections. This includes customer acquisition costs (CAC), churn rates, conversion rates, and other KPIs specific to your business. #capitalraising #vcfunding #startupfunding #preseed

During mentorship office hours, a first time founder asked me how to go about compiling financial projections for her pre-revenue venture. I told her that her projections will almost certainly be wrong and potentially very wrong. However, financial projections at the early stage can still give potential investors a great deal of information about the founder and the venture. Some examples: ⏹ What size market opportunity does the founder believe is attainable? Is it plausible? ⏹ What growth assumptions are built in? Are they plausible? If growth is projected to follow a hockey stick curve, what factors does the founder believe will cause the transition to accelerated growth and are they plausible? ⏹ Are the founder's cost assumptions complete (ie. have all major cost drivers been identified and estimated) and realistic? Does it have realistic assumptions around economies of scale? What are the upfront capital requirments? ⏹ Given the revenue and growth assumptions are the margin projections plausible? Are the unit economics profitable at scale? ⏹ Given the growth assumptions, is the plan for scaling the team realistic and cost-effective ? Note the repeated use of "plausible" and "realistic." No one is expecting accuracy (except maybe for the most immediate quarters). The financial statement is a unique opportunity for a founder to convince potential investors that in addition to having a great idea, they are thinking in business terms and have done sufficient homework to start developing a credible business plan. On the flip side, a founder could hurt their chances if: ⏹ Financial projections show unrealistic or incomplete assumptions of costs and time required to get to certain milestones. ⏹ The projected market potential is too small or will take too long to attain. By pure coincidence, the day after my call with the founder, the Angel Capital Association published a great guide for investors reviewing these early stage financials (attached). However, founders will gain a lot of good perspective from this guide as well. #venturecapital #startups #founders #entrepreneurs

Scared of Investor Questions About Your Financial Model? 😰 Facing a room full of investors can be intimidating, especially when they start grilling you about your financial projections.  But don't worry, you're not alone! Here's what kills your confidence (and how to fix it): 1. Assumption Anxiety • Unclear growth drivers • Unrealistic projections • Unsupported numbers • Guessing game metrics Fix: Back every number with market data and clear logic. 2. Formula Fear • Complex spreadsheets • Hidden calculations • Manual errors • Inconsistent formulas Fix: Use simple, transparent calculations you can explain in seconds. 3. Market Questions • Vague TAM numbers • Weak competitive moats • Unclear unit economics • Poor market validation Fix: Build scenarios based on real market research. 4. Update Uncertainty • Outdated projections • Static models • Slow updates • Historical inconsistencies Fix: Create dynamic models that adapt to market changes. 5. Story Struggle • Numbers without narrative • Missing milestones • Unclear growth path • Weak assumptions Fix: Connect every number to your story. Using this framework, Wasted.earth went from "model anxiety" to confidently raising $5M - investors were impressed by their clear, data-backed story. Want to walk into investor meetings feeling prepared? Let's chat about your model: https://dub.sh/oetMBFT