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Recently I saw another one of the dreaded financial charts in a startup’s executive summary: $0 revenue today and $25 million in revenue in year three. Whenever I see this, I immediately know that the CEO either a) doesn’t have any startup experience or b) hasn’t done the appropriate homework. Can a company go from $0 to $25 million in three years from a cold start? Yes. Does it make the startup look credible in an executive summary? No.
Here are a few thoughts on financial projections for startups:
- Study the Inc. 500, especially technology companies. What does the revenue ramp look like there? These are some of the fastest growing companies in the country, and annual revenueslike $1M to $4M to $10M are more the norm (and incredibly high growth).
- Build a bottom-up forecast based on number of leads generated, conversion from lead to opportunity, number of trained…
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Filed under: Book Reviews, Career Development | Tagged: David Cummings on Startups, Financial Projections for Startups | 3 Comments »
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