Modeling

Financial modeling and forecasting is about running scenarios. “What happens if…?” is the question we’re trying to answer with modeling. Planning for the best case and for the worst case is meant to help a startup invest or pivot in areas of the business that provide the most value.

Operational models and fundraising models are going to be different in complexity. An operational model will be very detailed to help a company plan for each line item of expense or each customer’s revenue. Running variance analyses on these detailed models helps startups know where you overspent or underspent according to the plan.

A fundraising model is going to show the key assumptions and is typically built to be easier to follow and understand for a prospective investor who is not as well versed in the nuances of your business. This type of model needs to show the potential of the business under reasonable assumptions.