How to pitch your financials to investors?
Financials are one of the most important parts of your pitch to investors. In times of crisis and economic uncertainty, the financials become far more important than during bull runs.
You can get everything else right, spin a great story, paint a great vision and design a beautiful looking pitch deck, but the numbers will reveal far more about the foundation of your startup and how likely it is to succeed.
The Role Of Financials In Your Pitch Deck
Some early-stage startups have gotten away without including financials in their pitch decks. Yet, even if you don’t have much in the way of existing financials to show, you should be including forward-looking financial projections. You ought to already have these prepared for your own internal use anyway.
The data shows that when a financials slide is included in a pitch deck that investors will spend the most time reviewing this slide. That alone should demonstrate how important it is. Next to your cover slide and team slide, it is probably the most pivotal in your presentation.
You may also be supporting your financials and the assumptions built to create your models in the appendix slides.
In a nutshell, the financials show your history as a startup, where you are now, and where you are taking investors that join you on the journey. Which is why, as an entrepreneur, you should learn how to pitch your financials to investors?
Keep in mind that in fundraising storytelling is everything. In this regard for a winning pitch deck to help you here, take a look at the template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.
Showing You Know Your Stuff
This is your chance to show that you not only know how to fill out a pitch deck template but that you know your industry and business in general.
Your financials instantly reveal if you don’t know your industry, or the basics of doing business today. This usually shows up by being significantly off the mark when it comes to market size, profit margins, and customer acquisition costs.
If you don’t have the basics down, then investors are going to have some very serious concerns about your ability to operate a business or protect their investment.
It shows whether you’ve done your market and fundraising research, and have invested your own time before asking them for their valuable time and hard-earned capital, as well as to put their reputation on the line for you.
Showing The Returns You Can Offer The Investor
The main purpose of the financials is to show investors the potential returns they can hope to get. They show the potential cash flow, the value at different stages if things go according to plan, and most notably the ultimate multiple investors can expect to cash out at.
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