Hi all,
I made the move from M&A into starting my own company. I will be pitching to Venture Capital's in fall. I have also built a very strong financial model.
Would any one have any nice models applicable to this circumstance which I can cross check to see if I've captured everything, formatting and line item wise... I know the slidebean has one online, but im looking for something a bit more complex than that.
Also, if you know of any good pitch deck examples, grateful if you could guide. I know there is a lot online, but if there is any which you loved or got inspired. Anything helps.
Trying to get ideas - can't be less than perfect when i start the funding rounds.
Highly appreciated!!!!!
bump
We'd need to know more about the business to be of any help. Is it SaaS? CPG? Restaurant concept with a franchising component? Apparel? Selling online? D2C? B2B?
A financial model is a dime a dozen. Do you have traction with the business that you can use to justify you business models and financial projections?
Keep it short and sweet for your 'pitch deck' but I'd also recommend having a long form deck that doesn't require you to present in order to be understood. Typical format is: 1. Origin story/problem 2. Solution 3. Addressable market 4. Traction 5. Strategy for rapid growth 6. Use of capital 7. Competition/competitive landscape/competitive advantages 8. Financial pro forma 9. Exit strategy 10. Team/board/advisors 11. Contact info/round info
Designing a good deck is an absolute bitch if you aren't a designer or very familiar with ppt. Start by documenting your design MO (color hex/rgb codes, fonts, icon styles, gradients etc) and create a ppt template. Use the "master slide" to save time on redundant things like title placement, fonts, colors, background art etc.
Pinterest is great for infographic examples and how to model data on slides well. You'll likely make and re-make 25+ versions of your deck before you're satisfied so it's really going to be trial by fire.
We are a SAAS business pre-revenue, so we will be raising seed. We have a financial model projection but just wanted to cross check to see I havent missed anything.
All your notes are very helpful so thank you for that. If you do have a example model, would be useful. Otherwise, for the pitch, good recommendations!
Here are some considerations for you based on how we built our model in the early stages:
Make sure you build a churn variable across the whole model. Churn rates will vary for each stage you're at/time period so having this built in right away will save you a headache in the future and will help you understand your customer flow/sales needs.
If you're a tier-based SaaS product, you should include how much % of customers that you assume will be at each tier. This is hard with no historical data. What we did early on was assume what % of paying customers will be at each tier and then weighted an average cost (aka subscription price) that we used as our average MRR per customer for the model.
If you want to get more technical you can add in a waterfall/cohort component to the model to show how much revenue will be generated by new customer cohorts over their lifetime. This can also be used to calculate expected revenue churned in each cohort using the churn %s from step 1.
There's no one-size-fits-all for SaaS models. Depends on your industry, customer base, acquisition strategy, etc.
This is great feedback! appreciate it...
Regarding your churn point, we do have a churn rate each year which you can adjust in your yearly assumptions.
Currently we only have one pricing for our model but will keep in mind your tier-based approach
Question regarding point 3. What type of cohorts would you recommend? If we take an example of a software for retail companies, i don't expect a difference in cohorts from one year to another. Advertising cohorts? probably not... Would love to do something technical like that, but cannot think of what would be relevant? any thoughtS?
At this stage, your presentation should not look like a CIM. It should be much more colorful, captivating, and less data packed. Because you will be pitching with this document a large portion of the time, it serves a different purpose than a mini- / single-doc data room.
If you're doing a top-down banker style financial model, I don't think it will be helpful at all.
For early stage startup financial modeling, you need to start with a bunch of studies on unit economics, then take the various unit economic scenarios and show how acquisition spend will ultimately efficiently flow through the model and drive revenue/volume/MAUs or whatever else your organizational KPIs are. You need to have a really good sense of the acquisition flywheel and show how you can create an efficient machine that converts funding -> marketing spend -> growth.
There's other analyses around gross margin and stuff that should be taken into consideration as well. Altogether this is a longwinded explanation to say that the financial model you would build during your stint in M&A is pretty dramatically different than what you would need to show to raise venture funding.
Well said.
Focus on the core KPIs and their drivers. Anything else might be considered overkill.
At your stage, investors will be more likely to invest in you and your story vs hockey stick projections.
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