When it comes to learning about financial modeling, I’ve outlined some key points below. While you may be able to start with a template, keep in mind that your business is unique, and therefore your metrics and costs will be as well. You won’t need to start from scratch if you’re working with a professional (whether that be your VC firm, your CFO, or a seasoned angel investor/advisor in your industry): they’ll know the important metrics and average costs. Here are some common points that you’ll want to include in your financial model:
Don’t show an investor a financial model that shows smooth growth “up and to the right.” No company’s growth is without bumps. These models take a lot of time to build and are highly personalized, so it really is best to consult with a professional. If you’re planning on raising $3M+ you should come prepared with a well thought out financial model.