Startup Financial Model templates
What is a Startup Financial Model?
Financial models are created to portray some of or all the aspects of a business. But for startups, financial plans are roadmaps. A startup financial model enables entrepreneurs to understand their cash and to determine their burn-rate. This is crucial for a firm, as it makes one conscious of how long money will last and what milestones can be achieved with the given expenditures.
Why do your VCs and investors need to read and understand your startup financial model?
Startup financial models are key for investors as well. They are needed to validate how much money an entrepreneur will need to start-up with, as well as how much the investor himself can potentially make on the investment. Essentially, investors are not tolerant to businesses that do not have a startup financial plan drafted and ready for analysis. Startup financial Models stem from startup business plans.
A startup business plan gives entrepreneurs some assumptions, from which they can make rational projections of costs and income for a startup financial model. Hence, different pieces can be brought together to get an overall picture of the firm (your costs, revenue, cash-flow summaries and profit & loss statements) based on a variety of assumptions.
For example, if a firm has a SaaS business model, then assumptions will differ between that of a Freemium business model. Hence, the SaaS financial model will vary greatly to that of a Freemium financial model.
Startup Business Assumptions are at the heart of your Financial Model
Although the projections do not need to be correct all times, the assumptions, however, are key. The assumptions tell whether the entrepreneur has given some thought to the startup’s potential market share, its competitors, adoption rates, etc. This is key for investors. Given the overall picture, the startup financial model enables you to depict the strengths and weaknesses of your assumptions. It pushes you to go back to your business model and revise it, in order to further develop it into a more successful instrument.
The Two types of Startup Financial models
A bottoms up startup financial model: It is one with an existing 5-15 core assumptions about the business, that is most useful for firms considering specific product direction, distribution strategy, or partnership that can potentially be a big impulse for the company.
A top down startup financial model: it one that works for a company which, for example, is aware it will need to go out and raise $X million in a Series A round in a given time frame and has gathered data on what sorts of revenue, margins, or growth numbers it needs to achieve to have a successful fundraise.
The approach to building a Startup Financial Model
Ultimately, the type of startup financial model you choose depends on what kind of firm you run. But do make sure to have the financial model in place before you incorporate your business and build your first products.
All in all, startup financial models have the additional benefit of enabling access to leverage of an accurate baseline valuation. Meaning, you can track the progress throughout your firm’s history.
You do not need to be a professional to design a Startup Financial model. To create a startup financial model for your own company, you do not need to be a finance expert. What an entrepreneur needs is the right set of tools, specially a startup financial model template to get started.
The Eloquens catalogue has a variety of startup financial model templates for different types of businesses, that enable you to adapt the model to one of your own. Be it a SaaS, Freemium or E-commerce business.
To customize it to your firm, assumptions will need to be changed so specific results can be projected. Also, if you wish to add more value to your startup financial model, you may enrich it with more variables too. For example, you may add volume growth rates and number of salesmen to integrate a “What If” analyses into your model.
Also, aim to have projections in your early-stage startup financial model so that it can go up to 3 to 5 years from the present time.
If you would like more information on the subject, feel free to have a look at the following links:
- Educate employees, founders, and others in how liquidation preferences affect financial distribution in exit scenarios200 remove_red_eyefreeby Michael Dempsey
Cash Model Template for StartupsTemplate to forecast your startup's cash expenditure, cash-flow as well as downside potential.204 remove_red_eyefreeby Tim Raybould
SaaS Financial Model: Simple Template For Early-Stage StartupsSimple financial planning tool tailored for early-stage SaaS entrepeneurs.534 remove_red_eyefreeby Gary Gaspar
movieStartup Pro-forma Profit and Loss statement (P&L) TemplateMade to help you construct a high level operation plan for your startup.339 remove_red_eyefreeby Charlie Tillet
Freemium Business ModelCustomize a ready-made financial model for your Freemium Web Services Business357 remove_red_eyefreeby Giff Constable
Startup Financial ModelA very simple financial model template that can be used to project website revenue.331 remove_red_eyefreeby Brian Livtack
Venture Capital Method (Single Round Financing)A full model enabling an entrepreneur to understand assumptions of both sides of the table in a single round financing350 remove_red_eyefreeby Prof. Moana Vercoe
Sample Financial ModelTemplate for determining cost realities and financial projections for potential investors' demands.553 remove_red_eyefreeby Marty Zwilling
Financial Model Template for StartupsTell the story of your business in numerical terms.192 remove_red_eyefreeby Vince Scafaria
Basic Startup Cost modelAnswers the question to how much you need to raise for a venture backed startup.216 remove_red_eyefreeby Sunil Rajaraman
Financial Model for Mobile Payment StartupIncludes assumptions page, income statement, balance sheet, cash flow statement and valuation sheet.138 remove_red_eyefreeby Tayfun Uslu
SaaS Model & KPIsA simple model to define and track your key metrics as a SaaS Startup271 remove_red_eyefreeby Ryan Carson
How to Make Your Financial Model Stand Out to Investors in 18 WaysSteps for your model that will make it much easier for people to read, understand, and hopefully invest in your business400 remove_red_eye
Startup Financial Model TemplateA simple financial model for an early-stage startup/anyone building a model for a company537 remove_red_eye
SaaS Metrics 2.0 DashboardA dashboard to help founders manage their SaaS business716 remove_red_eyefreeby David Skok
movieSaaS Bookings Analysis - Pt 2 SegmentationThis model converts gross bookings data into net bookings.59 remove_red_eyefreeby Adam Jernigan
SaaS Financial PlanA financial plan template for SaaS startups based on a model created for Zendesk714 remove_red_eyefreeby Christoph Janz
Redfin-Based Financial Model TemplateBrowse through Redfin.com's adaptable Financial Model. Find what brought it to success.172 remove_red_eyefreeby Glenn Kelman
SaaS Financial ModelA simple 12-month SaaS financial model customisable to your startup precise conditions and needs.290 remove_red_eyefreeby Nicholas Petroski
S3 Cap Table TemplateA cap table file to help entrepreneurs structure and understand their financing rounds and increase their performance148 remove_red_eyefreeby S3 Ventures
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