It is crucial to have financial projections, including revenue and costs, in an Excel table, especially if your startup is generating revenue. Most investors expect to see this information once you start discussing your business in more detail. When presenting to investors, it's best to use charts to visualize the financial information.
Investors typically expect 3 to 5 years of projections as it helps them evaluate the cost structure of the business, its potential, and the capability of the founding team.
While it's important to be realistic, don't underestimate your projections, as this may discourage investors. It's important to strike a balance between conservative estimates and accounting for the fact that startup investors are looking for potential unicorns. Exponential growth is the key to achieving this balance. Be conservative in the short term, but let the compounding effect of good month-over-month growth help you achieve big numbers in the long run.
Keep in mind that people often overestimate what can be done in a day, week, or month, but underestimate what can be achieved in 5 years. Avoid falling into that trap.
If your startup is in the very early stages, this slide may not be as important. If you are still in the process of creating a working product and finding product-market fit, it's better to show a high upside potential in the market slide.
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