Startup Financial Model

In a nutshell, there are five questions you must answer before building financial analysis for startups:

1. What is the goal?
Understanding why you need a startup financial model and what you will use it for helps you structure it well, choose the necessary metrics, and set the required timeframe. For example, VC financial modeling will look different from the one that will help you manage your cash flow or calculate the cost of your growth initiatives.

2. What are my key metrics?
The answer will depend on the goal of your financial model, your business model, and your industry. Some metrics like revenue, CAPEX and OPEX are surely a must. Others, like MRR, unit economics, sales efficiency, or retention, might be up to you or your industry and business model.

3. What are my revenue projections?
A good startup financial model calculates future sales based on market research, realistic assumptions, and/or past traction.

4. What is my cost structure?
Detail fixed and variable costs, including salaries, rent, marketing, and production costs.

5. What are the potential scenarios?
Create different scenarios (best case, worst case) to understand the potential effect on your revenue and cash flow.

There are three pillars of financial projections for startups:

1. Align your strategy with your numbers. Your customer acquisition strategy, business model, and growth goals define your financial projections. Make sure there are no discrepancies.

2. Include all incurring and future expenses. A well-devised financial analysis for startups must give a detailed breakdown of all the money spent on creating, operating, and scaling your business. Include CAPEX and OPEX, both current and within the next 3-5 years.

3. Add the most relevant metrics. Revenue growth rate and margins are surely at the top of your mind, but don’t forget to include other metrics that are relevant to your business model and industry.

Many of the same rules apply to SaaS startup financial models as to any other industry, except for a few things:

1. Saas Metrics:

– MRR and ARR breakdown (new / lost / expansion / total revenue)
– Retention metrics (net revenue retention, gross revenue retention)
– Unit economics (CAC, LTV, CAC payback)
– Sales efficiency (SaaS magic number)
– Churn rate and plan downgrade rate
– Net revenue retention (NRR)

2. Revenue boosters: Include upsells, cross-sells, and add-ons

3. Subscription tiers

Unlike other industries (SaaS, for instance), where subscriptions rule the revenue, ecommerce rests on one-time transactions, average order value, and inventory management. That’s why your ecommerce financial model should focus more on product sales, inventory, shipping costs, and customer acquisition. Also, don’t forget to include conversion rates and return rates metrics in your forecast.

Typically, constructing a fully operational and flexible startup financial model template takes up to a week once we have all the necessary client information and assumptions. Bear in mind that additional revisions could extend this timeframe.


We will help you fill in the blanks and guide you through the things the investors might expect to see in a venture capital financial model. All the data points used in your startup’s financial model will be benchmarked and adjusted based on industry ratios, competitor data, and investor expectations.

Absolutely. We build our models with usability in mind so even founders with zero finance / Excel knowledge can easily edit them. You can quickly adjust any assumptions and see immediate changes in your forecast. We will also guide you through the model structure upon completion and explain how all model sheets interact.

Absolutely. Based on your startup financial projections, you will see the cash flow needed for the next 12-18 months and onwards. The model will help you break down your expected revenue, expenses, and burn rate to get a clear picture of how much money you need to hit milestones, cover operational costs, and maintain a healthy runaway. Our startup financial model will also help you plan for different future scenarios so that you can get ready for the challenges and opportunities ahead.

Our startup financial models have a proven track record of successfully securing funding from top-tier VC and PE funds worldwide, praised for their usability and logical clarity. Over the past few years, we’ve assisted startups in raising over $610M+ in funding. Every sheet, line, and assumption is grounded in hundreds of hours of dialogue with various investors worldwide.

You will get all the necessary guidance to help you pitch your startup financial model to investors. If needed, we can also attend the investor calls for a separate hourly fee to help you pitch the numbers.

We will collect the needed industry-specific data, including conversion rates, channel cost metrics and typical expenditure levels to accurately estimate the required marketing budget based on your revenue expectations.