Insightful Financial Modeling

What is Financial Modeling?

A Financial Model is a dynamic forecast of a company’s financials based off assumptions. Typically, a model consists of an income statement, balance sheet, and cash flow statement which is supported by several schedules.

Why are Financial Models Important for Startups?

First and foremost, models are essential for fundraising. Investors will want to see the assumptions that are made to get to the future performance and valuation of a company. This will help them understand if an investment is worthy. Financial models are also a very important part of operational planning for startups. At any point in time, a model will tell you how much money you have. This gives insights on how much cash you can burn before another raise or, during growth, how much can be put towards capital expenditures. Because models are dynamic in nature, they can constantly give answers to ever-changing business circumstances that startups experience the most. Below are several reasons startups need financial model: 

•       Fundraising
•       Tracking Financial Metrics
•       Predicting Cash Runway
•       Planning Hires
•       Analyzing Churn
•       What If Analysis

Why Venture First?

Venture First has presented hundreds of financial models to clients and has honed in on best practices because of it. Financial modeling can get very complex, but Venture first has mastered the art of making models complex, yet simple.