• Mike Rogers

How to Present Your Financial Forecast

Having A Powerful Financial Forecast

When it comes to start-ups it is very difficult to know where you will be in 5 years. However, having a powerful financial forecast will help you in understanding the capital that is required for at least the next 18 to 24 months of runway.

Now, what should you present in your financial projections to justify both the amount you want to raise and to get as high a valuation as possible to minimize dilution? I believe you should present a financial model you believe you can deliver.

Everyone projects their revenue will go up and to the right. Investors expect that. After all, why would you approach an investor if you think your revenue will decline over time? Investors, therefore are very skeptical of the actual projections. They're looking for something else.


What needs to come across in your presentation more than anything is confidence. That will lead to trust, which in turn will lead to an investment. If you don’t believe your projections it will come across.

The potential investor will pick up on a “bad vibe” but won’t be able to distinguish between an overly aggressive forecast or an incompetent CEO.

Either way you’re unlikely to get funded.

To get funded you must believe your forecast. If the forecast you believe in says you need $1.5 MM to get to breakeven then use that model.

What to include

Your forecast should outline the following:

  • Projected income

  • Estimated expenses

  • Expected growth

A financial forecast is a carefully constructed projection of company development over a given time period, taking into consideration projected sales data, as well as market and economic indicators.

Normally you would want to include at least three years so that the investor can see the key drivers of your business over the course of time. Some investors may want up to five years, but in my opinion, that’s too much.

Benefits of a strong financial forecast

For potential investors, a strong financial forecast will help to:

1. Show the financial viability of your start-up as a new business

2. Identify potential risks which could affect business cash flow

3. Provide a clear understanding of future financial needs, including if subsequent investment will be required

4. Allow future comparisons between forecast and business operations so that start-up management can adjust the business to reach estimated goals

5. Show financial responsibility on the part of the founder

Your financial forecast is not only a critical tool to attract investment, but it will help you to show more clearly why you value your start-up at a specific figure. If you can show reliably that the business should generate healthy revenue, then investors will be more likely to accept less equity in return for the same level of capital investment.

Ultimately your forecast will help the investor see how the money that is being raised will be put to use and the impact it will have in the long term plans of the company.

For help with effectively presenting your financial forecast, contact me at mike@therevenuegroup.net


I also invite you to download the white paper and learn the 5 step process on How to Quickly Increase Your Valuation: a Proven 5 Step Process.

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