Building a Financial Model for Seed Stage Businesses
Financial models are key to running a successful business. A good financial model includes sales assumptions, a financial forecast, cash flow projections and will help you:
Make better decisions
Manage your cash
Enhance your planning around opportunities and challenges
Improves resource allocations to help you achieve the highest returns
Enables you to improve communications and align with employee goals
Identify risks and mitigate those risks
Fundraise
We’ve put together a financial model template for seed stage founders that we’ll review in the video below. It is also available to download and customize for your business.
Watch the walkthrough of the financial model with our instructor, Candice Tait, below.
Financial Model Overview
Let’s dive into the model. The model consists of 6 tabs:
README
This covers standard formatting rules and helps you and the viewer understand what they are looking at in the model.
For this model insert your company information where you see blue text. All other cells are formulas that are pulled from the blue text fields.
Cover
Defines the model, years the model covers, currency and historical data.
Input Assumptions
These are the key drivers of your business. You will spend the most time on your model here. Enter your TAM, SAM, SOM, Sales assumptions and more. Update the comment fields so you know how you came up with those numbers.
Summary
The Summary tab helps people understand your business quickly. It provides a high level overview of the business and graphs for visual representation. It provides a financial forecast, financing rounds and tells the story of your business and tells investors what they would be funding.
Financial Statement Workings
This is your P&L and cash flow projections.
Staff Wages Workings
One of the biggest expenses for companies is their staff wage. This provides a detailed view of staff costs.
Need additional help? Reach out anytime {at} hello@altitudeprograms.com or sign up for our course on financial modeling basics.
Meet your instructor, Candice!
Candice is a Finance Director with a passion for helping VC and PE backed companies enhance their knowledge of financial information to drive growth in her role as Investment Partner at Genesis Capital Limited venture firm. Her experience includes Finance Director and CFO roles for various private equity-backed businesses in both London and Europe. Candice served as Director of Finance at Lyft and is a seasoned mentor with 500 Global. Candice is a UK qualified Accountant, holds an MSc in Strategic Business Management, and is currently completing her Ph.D. in Corporate Finance through Auckland University.
Reach Candice {at] hello@altitudeprograms.
