28. How to create financials for early stage pre-seed startups that will wow investors

Any time you are talking to an investor, whether in a pitch deck or during due diligence, they expect you to show financial projections. Many founders run into trouble with this when the company is mostly or entirely pre-revenue. You might wonder what you can show with no track-record. Even so, financial projections are still essential both to the investor and to your strategy.

Right off the bat, let's be honest. Angels know that your numbers are going to be wrong. That is the only thing they can be sure of.

Angel investors are an idiosyncratic bunch; we all have different things we are looking for in a business and in financial projections. I want to see the founder tell a not impossible story about their company’s success. We all know that it is likely that you will need to pivot at some point, but you still need to show that your initial plan could work and produce substantial returns on my investment. Of course, that means you will have a chart showing hockey-stick growth. But don't just make up the numbers, show that they are plausible, or better yet likely.

Read the blog version: https://ftb.bz/startup-financials

Listen to the podcast: https://ftb.bz/podcast

Links from the episode:

Embrace the Pivot- https://youtu.be/OEDmau9ljoU

Why do Angels Demand 20X returns - https://youtu.be/J7tnKZW7TXg

The Three Kinds of Virality - https://youtu.be/jyxTtZ6Gl0w

Test Driving Your Business - https://youtu.be/MLJQMRIIm7Q