startup financial model

How To Build A Startup Financial Model To Win Attention

Startup Financial Model building is a pain. Let’s be honest. Unless you are an Excel nerd. It’s not just a problem of building up the model. The main issue is knowing what information to put into it.

What Is A Startup Financial Model And What Is It Used For?

For startups, a financial modeling is a finance tool that should be the numerical representation of the startup’s strategy and vision. It communicates and forecasts the company’s revenues, customers, KPIs, expenses, employee headcount and cash position.

For early-stage businesses, or simple ‘ideas,’ the startup financial model is a business plan that outlines the near-term expenses and goals for the company, and longer-term illustrates the startup’s growth potential. Companies raising venture capital funding will use the projections as a tool to communicate with the VCs, and it will often be an important part of finance due diligence. 

What Information Goes Into A Startup Financial Model?

Most projections that investors and experienced founders are expecting to see are pretty much the same template – revenue and expense projections, and a net cash position. Some templates have the three most important financial statements (the income statement, cash flow statement and balance sheet), but many templates simplify to just the income statement and a projected cash position.

We tend to recommend that founders use a template without the balance sheet and cash flow statement, unless they are working with a professional like us. This is because the balance sheet can be tricky to model correctly – an unbalanced balance sheet is embarrassing, and can cause investors to lose faith in the modeling exercise.

Since most early-stage companies don’t have complicated working capital, capex or loans, the balance sheet adds less to the analysis that you’d think. Thus, we recommend that founders DIYing their projections use a template that doesn’t bother with the balance sheet and cash flow statement. Although, when we produce projections our templates and outputs always have these statements – but again, we do this everyday, so it doesn’t take us meaningfully longer to get them right.

If you’d like to learn more about Financial Modelling, we highly recommend this page on the Kruze Consulting website, which also has free templates that you can use.


If you are the Founder of a Startup and you intend to raise capital from anyone other than your friends and family, you need to build a financial model before you start contacting investors.

Just in case you were wondering, I wrote another blog which covers the topic – what business metrics do investors check before investing. You can read it here.

About The Author

James Spurway is an Angel Investor, Advisor, Mentor, Speaker, former Commercial Pilot, and Author specializing in raising debt and equity funds for pre-seed or early-stage seed rounds for Startups in the Fintech, DeepTech, AgTech, ClimateTech, and AgeTech verticles. He lives in Singapore and has spent the past 30 years living and building businesses in Hong Kong, Vietnam, Germany, Switzerland, Monaco, the USA, Thailand, the Philippines, and Australia, where he was born.

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