Financial plan model template — Creandum

specht.p
Creandum
Published in
8 min readJul 14, 2022

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In every fundraising process, sooner or later, investors want to talk numbers. Besides the great J-curved charts predicting revenue in colorful pitch decks this usually means it is now time for a look under the hood. To understand key assumptions and value drivers of the business in more detail, the VC usually requests a business plan or financial plan. To help you get this right Maximilan Grohmann and me put our thoughts together and built a more detailed spreadsheet template with having Series A in mind (FIND HERE).

Over the years on the receiving side of such plans, we observed that the quality of such business plans for early stage ventures (Creandum predominantly looking at Seed and A rounds) varies a lot. However, whilst the pitch deck is often seen as the most important to prepare for fundraising, a well put together business plan in many cases will be equally important. If the deck is for getting your foot into the door, then the business plan (as well as any other materials you will share in the data room later on) will actually help you make it through the door frame to the other side.

In the following, summarized 5 tips we also give to entrepreneurs in our portfolio when preparing the business plan for fundraising.

5 key tips for your business plan model

  1. Think of the model as another chance to present your company. Well-prepared materials are usually a good indicator for investors of how things are running on the inside. You want to present a well-structured, thought-through, and aesthetically appealing model, so try to avoid sharing files designed for internal use only, which may be harder to understand for outsiders or poorly formatted.
  2. Be comprehensive but pragmatic. Make sure you provide sufficient granularity of the data you are showing. The core KPIs driving your business should be easy to find and understand. Make sure the data you are presenting is really relevant for the reader. Be pragmatic and simplify certain standard line-items if they are not as important to your business specifically. Especially since many variables will be hard to forecast beyond 6–12 months in early stage companies, a too complex model could potentially be even less reliable than a slightly simpler one.
  3. Make it as easy as possible for the reader to understand your model. Think about the way you want to present the output of your model. You should make sure you present individual line-items, sections and entire sheets in an order that intuitively makes sense to the reader. Consider guiding the reader through the model with a “how to read me” section in the beginning as well as useful comments throughout for things like abbreviations and core assumptions.
  4. Be transparent. Do not mislead the reader of your model. Whenever possible, use standard ways to calculate certain KPIs. Do not make too many random adjustments or invent fancy new KPIs that might make your numbers look stronger than they are. Ideally, give the reader the opportunity to easily understand your calculations by using formulas rather than hard-coding final values.
  5. Base your case on reasonable assumptions. The previously mentioned points around transparency and traceability become even more relevant when talking about your assumptions of the main drivers of your business case. Rather than driving your model using black box top-line MoM growth assumptions make sure you identify the key variables which are actually driving your business case and build on those.

Business / Financial plan model template

To make all of this a bit more tangible, we have created an exemplary dummy model /for a fictitious B2B SaaS business raising a Series A or later(CLICK HERE for the template). This model was inspired by the best practices of many great and more detailed financial models we have seen over the past years. Even though you might be able to use a lot of that for your own business, please keep in mind that the main purpose is to provide a rough idea of how such a model can look like

Disclaimer: It is not intended to be a plug-and-play template which you can just fill with your own data and you are ready to go — each individual business is just too different for that. The intention of this model is to provide a rough orientation of how such a model could look like, how you can structure and format it. However, if you actually find a few parts which you can directly implement in your own model, that is great too of course!

Even though it is a fairly straightforward model — in the following you can find some short explanations and background on the different sections of the model.

Cover sheet

This is the first thing the reader of your model will see. Here, you make the very first impression and set the tone for what is coming next. A nicely formatted cover sheet with a logo your company color etc. give the reader a good feeling when opening the model for the first time.

How to read me

As mentioned earlier, every model will be slightly different and company specific. Things that might be super intuitive for you will take other people minutes or hours to understand or might even lead to an extra round of Q&A which costs time and energy in already intense fundraising processes. Use such a section to provide any background information you think is necessary for the reader to really understand your model the way you want them to. Explain often used, non-standard abbreviations and definitions, and provide background on your key assumptions. If there are any special circumstances the reader needs to be aware of in order to correctly interpret the model, make sure you also add such background here (e.g. if you just pivoted last month, or if you expect to launch a new major product line in two months which will drastically impact the entire case, etc.). Sometimes, it can be handy to just add screenshots from the pitch deck or another presentation in which those things have already been explained here again. You can also make a loom.

Overview

This section should give a comprehensive overview (as the name suggests) of your business. In contrast to the next section — “financial statements” — it usually makes sense to not only show financial metrics here. Certain KPIs and metrics which are typically used to assess businesses in your industry should be displayed here. But also your own northstar KPIs that might be unique to your business definitely belong in the overview section. Oftentimes, adding some charts in a sort of simple dashboard rounds off this section quite well. Not only does it look nice but different readers have different preferences in the ways they consume data. Some the visual presentation whereas others cannot wait to jump right into the raw data.

Financial statements

In contrast to the previous section where you give an overview of different metrics that best present your business, here you should show a high level overview of the very standard three financial statements: profit and loss statement (P&L), cash flow statement, and balance sheet.

For most early stage, asset-light software companies, the financial statements usually are not very complex and can therefore be kept rather high-level. However, depending on your industry and business model, the opposite might be the case. Then you should make sure to also reflect that in the granularity of your financial statements of course.

Assumptions

The assumptions sheet is probably the section where we spend the most of our time when analyzing business plans of early stage companies. We want to understand how you think about your business, what the key drivers are and how they need to develop to lead to an attractive business case. Especially since there usually is not too much historical data to rely on in early stage companies many assumptions have to be made. A very well structured assumption section is therefore a key part of every financial plan. In our opinion, it really helps both the reader and the creator of the model to have one central place where all the assumptions can be found. For the reader, it is easy to read and understand how the model works and to play around with some core assumptions. And for the creator it minimizes the chance for errors if all assumptions are in one central place rather than spread throughout the model where they can easily be missed. A well thought through assumptions section also gives you the opportunity to tell your story the way you want. It clearly shows what assumptions you are, how you got to the numbers in your plan and what needs to happen for those assumptions to become reality. By adding comments and explanations throughout the sheet, you can guide the reader and avoid misunderstandings and misinterpretation.

Calculations

To avoid too much complexity on the output sheets (overview, financial statements etc.), it usually makes sense that the assumptions do not feed directly into those. This is where the calculation sheets come into play. Here you can make more detailed calculations based on the assumptions and input data. Oftentimes, there are interim calculations necessary to calculate the numbers shown in the output sheets. Hiding all these calculations in directly in the formulas in the output sheets would make the formulas very complex and hard to understand. Therefore, the calculation sheets do not only make the calculations more transparent, but they also give the reader an opportunity to dive one level deeper and look at the data at a slightly more granular level if desired.

Input data

In this section, you can add raw data which is being used as an input throughout the model. This could be actual (historical) P&L data, customer / pipeline data, employee salary data, etc. Make sure you only include data that you the reader is allowed to see. Anything confidential should be anonymized. If available, adding raw input data can create even more transparency and creates more trust into the model. However, it is definitely not a must.

Conclusion

A financial plan can be a cornerstone of successful fundraising processes, but the ways to deliver at the highest standard can be less obvious than with a pitch deck.

We hope these guidelines helped you, if you think we missed anything or have any ideas for how to improve it, let us know.

Thanks to my colleague Maximilian for co-authoring and doing lots of the heavy lifting - not only here but in 100s of financial plans we receive.

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