ralston blog

How to present financials to investors

Kyle Brennan

March 20, 2021

Pitching for funding was a key topic covered in our webinar, so as part of our #FinancialConfidence series, we’re sharing our top tips on how to present financials to secure funding. Check out our video presentation below and read on for the highlights to help your startup get investor ready.

Add credibility to your business model

Some of the key benefits of preparing your financials are the credibility it brings to your team and overall business proposition. The main things investors look for in a pitch are a breakdown of your team’s expertise, your industry’s market size and the financial viability of your business.

Validating your business plans 

It’s important to create business projections that outline your three to five-year plan so investors are confident in the future growth potential of your business. This will help you understand your business viability, whether your proposition makes financial sense and most importantly if you’re able to predict a healthy ROI for investors.

Get investment ready

Working on your financials as early as possible will ensure you are well prepared to go through the due diligence process. This means having your actuals in order well in advance so there are no holes in your numbers and it’s this forward planning that will help you sail through due diligence as you seek investment. 

Start off on the right foot

After you’ve successfully raised investment, it’s important to develop a strong relationship with your investors and show how you can communicate your financial growth plans whilst being a good steward of capital throughout the business relationship.

Show traction

Build investor confidence by sharing cautiously ambitious financial projection that helps to drive interest. Whether you secured a lucrative client contract, have a healthy sales pipeline or launched a successful Kickstarter campaign, all of these are evidence of huge business potential. Even if your startup doesn’t have much history or traction, it’s still vital to make those forecasts as investors are investing in future opportunities, your team and your industry market size.

Unit economics matters

It’s important to illustrate what the future of your venture looks like to investors. Do you have a viable business, healthy gross margins and clear customer acquisition strategies? Make sure to indicate how margins will change as the business scales and include a three-year forecast that showcases all your financial projections.

Outline your spending plans

If you’ve watched Dragon’s Den, you’ll know one key question from investors is how you intend to spend your investment. Clearly detail exactly what you plan to do with every penny of your funding whether that’s hiring, marketing or product development. Create an annual budget breakdown if the funding is intended to last for a year and most importantly, show the ROI.

Deck, appendix and model

Make sure your investor pitch includes a deck featuring high-level numbers, projections and unit economics. Your appendix should include a detailed spending plan whilst your financial model can feature more extensive numbers.

Create an assumption sheet

This is a forecasting spreadsheet that acts as a cheat sheet and features your projected numbers to ensure your financial model aligns with your pitch deck.

Schedule regular updates

Update your numbers regularly and review your pitch deck often so you have the most recent version and most accurate numbers for investors. Forecasts and projections fluctuate constantly so you need to update your deck accordingly to ensure your numbers aren’t out of date.

Discover how Ralston can help you prepare to pitch for investors by speaking to our founders.

Kyle Brennan

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