Question :
Hello team Maanaki!I have a question about financial forecasting. We are about to pitch our business, we don’t have revenue yet as we have boot strapped the development of our MVP. Is there a tool, guideline or data I should be following when doing these predictions to keep them accurate.

Question submitted 27/01/21 @ 01:04pm
Industry: Funding & Finance
  • Up

    Sara – I’m assuming that you are pitching for investment capital. Investors are looking for high-growth businesses – and forecasts are a way of showing you understand both how growth works in your industry and if you are thinking big enough. You need to find the balance of realistic yet enticing. Hard practical advice [which is what you want]. There are a number of growth frameworks to look at. These are predominantly software and SaaS frameworks [and you don’t say what your business is]. These are in order from highest growth profile to a lower profile [again software/SaaS]. 1/ T2D3 – hit $2M in ARR [annualised recurring revenues] then triple, triple, double, double, double. 2/ High-performance threshold – $100M in ARR in seven years. 3/ Par threshold – $50M in ARR in seven years. For a software or SaaS business – these are the levels of revenue that you should be targeting for investors. That is the sort of revenue profile that investors in software companies are looking for – it can be lower in other industries. You need to be able to tell a credible story about how you will achieve the forecasts – these frameworks are simply a guide. And remember – the only thing that you can guarantee about forecasts is; they will be wrong… Good luck. Mark


    Thank you so much for your reply.

    So you say forecast the financial targets they expect and give a credible story on how you can make that happen? I can do that.

    We are not yet pitching for investment but we will be soon. This upcoming pitch is to a panel for business growth opportunities.

  • You must be logged in to reply to this topic.