As a CFO for hire and founder of TBC-Capital, I've seen countless investor pitches – some amazing, some... not so much. The biggest difference often boils down to how founders use their financial models to tell their story. It's not just about the numbers, it's about weaving those numbers into a narrative that captivates investors and demonstrates a clear path to success.
Here's my framework for using your financial model to communicate your business vision:
Align Your Model with Your Pitch
- Identify Key Themes: What are the core elements of your business story? Is it rapid growth, unique technology, or a massive market opportunity?
- Map Metrics to Themes: Which financial metrics best illustrate each theme? Revenue growth might speak to market traction, while gross margins could highlight your product's uniqueness.
- Highlight Key Assumptions: Be transparent about the assumptions driving your model. Explain how changes in these assumptions could impact your projections.
Storytelling with Data
- Go Beyond Numbers: Don't just list financial figures. Explain what those numbers mean for your business. A 50% month-over-month growth rate isn't just a number – it's a testament to your product's demand.
- Show the Path to Success: Your model should clearly illustrate how your business will achieve its goals. Connect financial milestones with key business strategies and operational initiatives.
- Use Data-Driven Anecdotes: Bring your data to life with anecdotes that showcase real-world impact. "Our customer retention rate of 90% has translated to 10,000 repeat customers in the past year alone."
Tailor Your Presentation
- Research Your Investor Audience: Different investors have different priorities. Angels might be more focused on early traction, while VCs may be looking for scalable business models.
- Adjust Content and Language: Tailor your pitch to resonate with your specific audience. Use language they understand and emphasize metrics they care about most.
TL;DR
Your financial model is more than just a spreadsheet – it's a powerful tool for communicating your business's potential.
I give an actual example and script in my newsletter. Sign up here: https://lnkd.in/dU_dAe6j
I also talk way more about this in the RaiseSmart accelerator which is now self-paced and a whole lot more accessible for founders in a financial crunch. Learn more: https://lnkd.in/gY7zPNRD