What makes for a good startup financial model template?
Financial models can be an invaluable strategic and financial analysis tool for any business, but for startups, they’re often also a prerequisite for securing necessary financing.
As a result, a good startup financial model template must appeal to your potential investors.
Some templates use the traditional three-statement model approach, which interlinks and forecasts the three primary financial statements: the profit and loss (P&L), balance sheet, and statement of cash flows.
That can be a viable option for more established startups with sufficient revenue and complexity to generate meaningful financial statements. However, it may not be the best approach for early-stage startups.
When your business is first developing, you often lack historical financial data and have minimal assets and liabilities, both of which diminish the relevance of the balance sheet and cash flow statement.
Since modeling them can also be time-consuming and difficult to do correctly without expert help, it’s often more trouble than it’s worth. The last thing you want is to scare off an investor by bringing a poorly rendered model to a pitch.
Instead, early-stage startups often benefit more from presenting a model that focuses on their P&L, doubling down on their revenue and expense projections, as well as the key drivers of their financial performance.
Ultimately, a good financial modeling template is one that matches your startup's current stage of development, clearly communicates your financial goals, and demonstrates a reasonable strategy for achieving them.

How to prepare a financial model venture capitalists want to see
Analyze your circumstances
As we’ve established, the best way to prepare a financial model often varies. Even when attempting to raise a Series A round from venture capital investors, the most appropriate structure and drivers can depend on your circumstances.
To determine what makes the most sense for you, consider factors like the following:
- Industry standards: What metrics are important to your industry? For example, monthly recurring revenue and churn rates are crucial to SaaS companies, while E-commerce startups focus more on customer acquisition cost and lifetime value.
- Investor requirements: If a specific venture capital investor asked you for a financial model, what expectations did they share? If nothing explicit, what do you think they’re looking for based on your interactions and knowledge of their priorities?
Keep in mind how you prepare your financial model is often secondary to your reasons for doing so. In many cases, venture capitalists ask for a financial model largely to test how well you understand your business and how you think.
Anyone can predict they’ll be generating hundreds of millions of dollars in five years. What matters is the logic behind the numbers—why you made your assumptions, how you chose your growth drivers, and what insight into your market you demonstrate.
Choose an appropriate modeling approach
After conducting the analysis discussed in the previous section, you should be well-equipped to pick a financial modeling strategy that suits your needs. When pitching to venture capital investors, the two primary approaches include:
- Performance projections: Financial models for venture capital investors often only need to include projections for your startup’s revenues, expenses, and net cash position, unless a potential investor explicitly asks for a balance sheet or cash flow projection model.
- Three-statement model: The three-statement model interlinks the balance sheet, income statement, and statement of cash flows, providing a more comprehensive view of your startup’s finances than a simple performance projection model.
If you’re not sure which direction to go, consider your level of modeling expertise. If you don’t have a financial background, you may be better off foregoing the balance sheet and cash flow statement, as they can be tricky to create.
However, if you’re confident in your modeling skills or are partnering with an expert financial modeling service provider like Zeni, a fully integrated three-statement model may be worth the effort for the extra insight it provides investors.
Pick a template and input historical data
Whatever financial model you decide to prepare, it’s highly beneficial to start with a template. There’s little if any benefit to building your own from scratch, and it’s far more efficient to tweak an existing one to meet your needs.
Fortunately, countless financial modeling templates are available for download, so you’re sure to find one that makes sense for you. For example, the one we’ve provided above is ideal for SaaS startup founders with B2B and B2C revenue streams.
Once you’ve decided on a template, the next step is to input the historical data that will serve as the foundation for your modeling calculations.
Generally, having more historical data to draw from should make all your startup financial projections more accurate. However, if you have at least a few years of information, that should be plenty to create a working model.
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Calculate key driving metrics
With the historical data entered into your spreadsheet, you can calculate the metrics you believe are primarily responsible for your financial growth and performance.
These can vary, as they should be tailored to your business, but be sure to include drivers for both revenues and expenses.
Revenue model drivers are often most important to investors, so spend extra time on them and be prepared to articulate your reasons for choosing them. For example, some potential revenue drivers include customer conversion, acquisition, and churn rates.
When selecting cost drivers, focus on your most significant expenses. For example, headcount is often a critical cost driver, as wages and benefits are frequently one of the most significant expenses for startups.
Create forecasts for multiple years
Once you’ve calculated your drivers, use them to project your future revenue and expenses over the next several years. That will help you generate the bulk of your financial model.
However, you shouldn’t use these types of metrics to forecast every element of your financial performance. Investors will expect you to use detailed schedules for the activities you can project more specifically.
For example, if you own fixed assets, calculate the depreciation expense you’re allowed to claim over their useful lives. Similarly, if you have long-term loans, you should model out your principal and interest payments based on your loan terms.
Cost drivers are also poor tools for forecasting the additional operational expenses you’ll encounter as your startup scales. Since you don’t have historical data for them, use benchmarks from similar startups to make reasonable estimates.
Repeat forecasts using different assumptions
Once you’ve created your initial forecasts, it’s highly beneficial to repeat the process using different sets of assumptions. Not only does that stress-test your financial model, but it also shows investors you’ve planned for a range of possible outcomes.
Commonly referred to as sensitivity or scenario analysis, this helps capture how your financial performance might change under various conditions. Use at least three sets of assumptions to model out the following:
- Base case: This uses your most realistic assumptions based on your current data and expectations. It reflects what you believe to be the most likely outcome for your startup.
- Best case: This uses optimistic assumptions, such as your most ambitious revenue projections. It should reflect an ideal but still realistic scenario.
- Worst case: This uses pessimistic assumptions, such as higher-than-expected costs and slower revenue growth. It should reflect a conservative—but not disastrous—outcome.
This type of financial planning isn’t just for impressing investors. It’s also a practical tool for your business, helping you identify your most significant risks and opportunities so you can develop strategies to mitigate or capitalize on them.
Create an investor-friendly presentation
When preparing a financial model for VC investors, forecasting is only half the battle. Just as important is presenting the data in a way they can readily understand. Here are some strategies you can use to make your model more digestible:
- Text formatting: Clear and consistent formatting can help differentiate between types of data. For example, it’s a good idea to use one text color for historical data and another for cells with formulas or projections, making it easy to discern between inputs and outputs.
- Logical layouts: Organizing your financial model into separate tabs and sections makes it much easier to read through at a glance. For example, you probably want to have your depreciation schedule on a separate sheet from your financial projection tab.
- Visuals and graphics: Incorporating charts, graphs, and other visuals can help you highlight the most significant aspects of your model and make the most important data points more accessible. For example, it’s often beneficial to have visual elements that track key performance indicators.
Ultimately, your goal is to make your financial model as user-friendly as possible. Not only does that demonstrate your attention to detail, but it also ensures investors can focus on your startup’s potential instead of wasting time deciphering your data.

Streamline your financial modeling with Zeni
As a startup founder, financial modeling can be an overwhelming task on top of juggling the day-to-day responsibilities of managing a growing business, especially if you lack a financial background.
When you need to prepare a model for meetings with venture capitalist investors, the stakes are also incredibly high, and you can’t afford to make mistakes.
Instead of DIYing your financial modeling, consider outsourcing the responsibility to a fractional CFO like Zeni’s. You can get expert financial guidance from an experienced financial professional without burdening your startup budget with a full-time CFO.
Not only can they prepare a robust financial model that appeals to investors, but they can also provide invaluable strategic advice as you navigate the fundraising process.
Schedule a free consultation with Zeni today to take the stress out of your finances and get the help you need to scale your startup.