Question 1

What's the minimum forecast I need?

Accepted Answer

12-18 month cash flow projection. Revenue, expenses by category, ending cash by month. Know when you hit zero. That's your runway.

Question 2

Should I use a spreadsheet or dedicated tool?

Accepted Answer

Spreadsheets work early. Dedicated tools (Causal, Pry) better as complexity grows—version control, scenarios, collaboration. Upgrade when spreadsheet breaks weekly.

Question 3

What unit economics do investors want?

Accepted Answer

CAC (customer acquisition cost), LTV (lifetime value), LTV:CAC ratio, payback period, gross margin. Know these cold.

Question 4

How do I forecast revenue?

Accepted Answer

Bottom-up from customers and pricing. Top-down from market size as sanity check. Be conservative. Reality usually between forecasts.

Question 5

What about forecasting expenses?

Accepted Answer

Start with fixed costs (rent, salaries). Add variable costs tied to revenue. Include planned hires and investments. Build in buffer for surprises.

Question 6

How often should I update forecasts?

Accepted Answer

Monthly at minimum. Weekly if things are volatile. After major changes (funding, pivot, big customer). Keep actuals vs forecast history.

Question 7

What scenarios should I model?

Accepted Answer

Base case (expected), optimistic (+30%), pessimistic (-30% or worse). Know your levers—what if we cut marketing, what if customer delays, etc.

Question 8

How do I calculate runway?

Accepted Answer

Current cash divided by monthly burn rate. But include revenue growth. More sophisticated: months until cash hits zero in projection.

Question 9

What's a burn rate?

Accepted Answer

Net burn = expenses minus revenue per month. Gross burn = total expenses. Net burn matters more—it's actual cash consumption.

Question 10

How do I forecast hiring?

Accepted Answer

Plan roles and timing. Fully-loaded cost (salary + benefits + taxes + equity). Usually 1.25-1.4x salary for all-in cost.

Question 11

What tools connect to my bank for real-time data?

Accepted Answer

Pry, Causal, Finta can connect to banks. Auto-update actuals. Reduces manual entry. More accurate forecasts from real data.

Question 12

How do I present forecasts to investors?

Accepted Answer

Clean charts showing trajectory. Key assumptions clear. Monthly detail for Year 1, quarterly for Year 2-3. Show you understand drivers.

Question 13

What if I have no historical data?

Accepted Answer

Use industry benchmarks. Be transparent about assumptions. Focus on the model logic—investors know early projections are wrong.

Question 14

Should my forecast be aggressive for fundraising?

Accepted Answer

Ambitious but defensible. Investors see through fantasy. Better to hit aggressive-but-reasonable than miss pie-in-sky.

Question 15

How do I track actual vs forecast?

Accepted Answer

Monthly variance analysis. Why were we off? Adjust future forecasts. Build institutional knowledge of what drives your numbers.

I need to create financial projections and forecasts

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