How to build Pre-Revenue Financial Projections for your Pitch Deck
For pre-seed founders, building a solid pitch deck is a crucial step towards securing that initial investment. Yet, the pressure to showcase financial projections can feel a little overwhelming, especially when revenue data is scarce.
But fear not! Even without a proven track record, you can craft compelling financial projections that resonate with investors and get started on your fundraising journey.
In this guide, we'll leverage the insights of veteran investors Lance Cottrell from Feel The Boot, the twitter post from EveryWhereVC Managing Partner Jenny Fielding, alongside my own experience navigating the startup fundraising landscape.
We'll also explore how Score My Deck, your fundraising co-pilot, can help you refine your financial projections and broader pitch deck for maximum impact.
Focus on Clarity and Transparency: Short-Term Wins Matter Most
While long-term projections can be a strategic tool, pre-seed investors prioritize the immediate future. Focus on year one, showcasing your burn rate, funding needs, and the key milestones you aim to achieve.
This transparency demonstrates a clear understanding of your financial runway and how the requested investment fuels your growth trajectory.
Be a Storyteller: Financial Projections Paint a Picture of Success
Your financial projections shouldn't just be numbers on a page. Use them to tell a compelling story about how your business model generates revenue and scales. Back up your assumptions with market research and industry benchmarks from websites like Statista to add credibility and demonstrate your grasp of the competitive landscape.
Embrace Realistic Assumptions: Ditch the Hockey Stick
Investors have seen their fair share of unrealistic growth projections. Instead of fantastical hockey-stick curves, showcase grounded assumptions about customer acquisition and unit economics.
Explain your thought process behind these figures, revealing a data-driven approach to building a sustainable business.
Highlight Your Runway: Demonstrating Fundability
Investors want to see that your funding request will enable you to reach the next fundraising milestone without running out of cash. Project your runway clearly, demonstrating your financial preparedness and ability to efficiently utilize capital.
Bonus Tip: Consider Alternative Scenarios
While you present your main financial plan, consider incorporating alternative scenarios that showcase your adaptability. This demonstrates your ability to adjust to unforeseen circumstances, impressing investors with your preparedness and strategic thinking.
Beyond the Numbers: The Process Matters
The process of building your financial projections is just as important as the final figures themselves. Investors gain valuable insights into your thought process and understanding of your business model by seeing how you arrived at your numbers.
Score My Deck: Your Pitch Deck Powerhouse
Crafting stellar financial projections is a key piece of the puzzle, but it's not the only one. Score My Deck is your secret weapon for crafting a pitch deck that captivates investors.
Here's How Score My Deck Supercharges Your Pitch Deck:
- AI-Powered Feedback: Gain objective, data-driven insights on your entire pitch deck, including your financial projections. Score My Deck's AI pinpoints areas for improvement on your pitch deck and ensures your message resonates with investors.
- Actionable Recommendations: Don't just receive generic feedback. Score My Deck provides specific, actionable advice on how to strengthen your financial projections and elevate the overall effectiveness of your pitch deck.
- Confidence in the Ring: With Score My Deck by your side, you'll approach fundraising meetings with renewed confidence. Your pitch deck will be investor-ready and primed to leave a lasting impression.
Pre-Seed Investors Back the Founders, Not Just the Idea
Remember, pre-seed investors are placing a big bet on you and your team, often with limited data on the business itself. While a strong financial model is important, your experience and capabilities are equally crucial.
Focus on showcasing your passion, expertise, and ability to execute your vision. Building a strong team is a key indicator of future success, and pre-seed investors recognize this.
Pulling from the VC Ecosystem: Building on Collective Knowledge
My direct conversations with prominent VCs like Haley Bryant, Brett Calhoun, and Casey Williams further emphasize this point. They all acknowledge the importance of the founding team in pre-seed investing decisions.
These investors look for founders with a deep understanding of their target market, a hunger to solve a real problem, and the grit and determination to navigate the inevitable challenges faced by early-stage startups.
Conclusion: Crafting a Winning Pitch Deck (and Company!)
By following these steps and leveraging the power of Score My Deck, you can craft compelling financial projections that effectively communicate the problem you are solving and your startup's potential so that you can effectively secure the pre-seed funding you need to bring your vision to life.
Remember, investors are backing you just as much as they are backing your idea.
So tell your story with passion, demonstrate your capabilities, and showcase a data-driven approach to growth. With a solid financial model**