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March 20, 2020 in Entrepreneur Advice, COVID-19

Best Practices on Building Your Financial Model (and Common Mistakes to Avoid!)

Are you an early-stage entrepreneur looking to raise capital, but need help building your financial model?

Our team at Village Capital has trained more than 1,000 early-stage startups over the past decade, with a curriculum that is focused on how to get your startup “investment-ready”. One of the main questions we hear from founders is: how do I build a financial model?

Last week I held an introductory webinar that provided a free look at that part of our curriculum. I also added some thoughts about how COVID-19 could impact your model over these next few months.

In the video below you’ll learn some of the best practices and common mistakes to avoid, including: 

Best practices

1. Include multiple different scenarios based on external factors.
2. Make sure your key drivers are visible.
3. Make sure to be consistent with unit economics.
4. Add comments to make things easier to read.
5. Color code! This can go a long way.

Common mistakes

1. Avoid inconsistency with company goals.
2. Never force your business model into a template.
3. Group rows instead of hiding rows.
4. Don’t let assumptions impact historical data.
5. Stop hardcoding data.

Watch the full webinar below for best practices and common mistakes to avoid. And sign up for our next webinar on planning milestones to scale your business.

If you are a fintech firm, check our US Finance Forward 2020 program and apply today!

Webinar_FinancialModels

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