The financials slide is one of the most important in a pitch deck. The information you add to this slide indicates to investors that the startup is worth investing in. As your fundraising consultant will advise, when creating the pitch deck, you’ll include compelling numbers to help investors evaluate your new company. However, presenting financials for a pre-revenue startup can be tricky, so you’ll rely on other metrics and stats to attract funding. If you aren’t quite sure how to do that, read ahead to learn how to value a startup without revenue and get the financing you need. 

Present Financials in the Form of Stats and Metrics

When designing the financials for a pre-revenue startup, you’ll include stats and metrics in the pitch deck. While a stat is a single number, a metric is more dynamic and indicates how the stat varies and changes over time. You’ll create a graph and plot stats on it to show how it evolves over the period you’re projecting. This graph becomes a metric. Given the choice of presenting your financials, a graph form always wins out over text. That’s because it lets readers quickly skim through your pitch deck and focus on the particular areas of interest.

A line graph is more suitable for projecting your startup’s growth from month to month. Investors like to see a growth of at least 15%, and you can show this growth by plotting sales numbers converted into percentages. But, if you wish to show a comparative analysis, like sales growth versus production costs, from month to month, you can use a bar graph. Increasing sales and corresponding dropping costs indicate a great investment.

Numbers to Add to the Financials

A typical pitch deck shows stats like cost per unit, profit per unit sold, cash burn rate, net profit, and gross profit. These numbers help investors determine the maturity of your startup. However, if your startup is pre-revenue, you won’t have these figures. In that case, you’ll add the stats you do have, such as cost per unit (assuming you’re making sales), estimated profit per unit sold, and cash burn rate. Businesses that are subscription-based can add information like the average customer lifetime or the time frame for which customers continue to subscribe to their services. 

Provide Future Projections

You’ll project your financials from a futuristic perspective and indicate estimated numbers over at least three years down the line. Since these projections are only estimates, you can calculate them after researching industry trends and your current business growth. Essentially, you’re presenting numbers to show how your business is likely to perform in the future and the profits your business plan can potentially generate. That’s how you’ll indicate that your pre-revenue startup is a great option for investing. 

As mentioned above, when putting down figures in the pitch deck, you’ll base estimates on carefully researched facts that can hold up during the due diligence process. When investors start digging, your numbers should be fairly accurate, or you risk losing credibility, resulting in the investment offer being withdrawn instantly. 

Don’t overlook the value of your team when designing a pitch deck for a pre-revenue startup. Investors like to back companies that have an excellent founding team with robust profiles and top-notch talent that is sure to propel the startup toward assured success. 

So you see, entrepreneurs can get the funding they need even if their startup is still in the pre-revenue stage. Use these tips to design a compelling financials slide, and your fundraising efforts are sure to be successful.

BIO

Alejandro Cremades is a serial entrepreneur and the author of The Art of Startup Fundraising. With a foreword by ‘Shark Tank‘ star Barbara Corcoran, and published by John Wiley & Sons, the book was named one of the best books for entrepreneurs. The book offers a step-by-step guide to today‘s way of raising money for entrepreneurs. 

Most recently, Alejandro built and exited CoFoundersLab, which is one of the largest communities of founders online. 

Prior to CoFoundersLab, Alejandro worked as a lawyer at King & Spalding, where he was involved in one of the biggest investment arbitration cases in history ($113 billion at stake). 

Alejandro is an active speaker and has given guest lectures at the Wharton School of Business, Columbia Business School, and NYU Stern School of Business. 

Alejandro has been involved with the JOBS Act since its inception and was invited to the White House and the US House of Representatives to provide his stands on the new regulatory changes concerning fundraising online.