I looked into every single video about Financial models on Youtube, and they all start with a spreadsheet.
And yes, of course, that’s what the Financial Model is, and we’ll get to spreadsheets today- but before that, we need to get on the same page about what the financial model is, how it should work, and the most common startup founders make when doing them.
A financial model is a sheet at which you through data: your expenses, your assumptions about the business, real benchmarks from other companies- and on the other side it should spit out some key company questions.
Some of them are urgent, almost life and death questions for your business:
- How much runway you have (how long until you run out of money).
- Can you afford that new hire? Or that new campaign?
- If you’re looking for investors- how much money do you need to raise, and when?
