[HN Gopher] Startup financial models - Templates compared for SaaS
___________________________________________________________________
Startup financial models - Templates compared for SaaS
Author : warpech
Score : 126 points
Date : 2020-05-03 20:56 UTC (2 hours ago)
(HTM) web link (www.stephnass.com)
(TXT) w3m dump (www.stephnass.com)
| Silhouette wrote:
| These documents all look very smart, but how does anyone have any
| idea whether the numbers in them are even close to realistic? I
| can make up some cute hockey stick numbers for any of my
| businesses, but why should anyone trust them? Particularly for
| businesses that _haven 't even launched yet_ and therefore have
| _literally zero_ hard data on whether customers will actually pay
| them money or how much or for how long. How many startups in that
| position, with no financial data and no evidence of product-
| market fit, can credibly predict even a year ahead that they won
| 't pivot to some completely different plan, never mind 3 or 5
| years out?
|
| When I started my first B2C, a long time ago now, it was actually
| the bank where we opened our business account who asked these
| kinds of questions. We sat down, put our best guesses at
| plausible numbers into a spreadsheet for things like acquisitions
| and churn, worked out the money that would result.
|
| Barely any of the key assumptions we made were within an order of
| magnitude of reality, and they were _all_ in the wrong direction.
| For example, we have far higher churn than any example startup
| business plan I have ever seen just from card charges that fail
| with no obvious explanation each month where we don 't
| subsequently recover and continue that subscription. That problem
| remains one of our biggest pain points to this day, and that
| effect alone has turned many an otherwise profitable month
| negative and reduced that business to a fraction of the size it
| would otherwise have been by now if everything else was held
| constant. No-one here saw that coming. No example plans or
| startup guides or financial advisors we consulted even mentioned
| the possibility, never mind giving any concrete figures for what
| we might expect.
| JaakkoP wrote:
| I can only speak on behalf of my model (#3), but that's meant
| entirely for companies who want better visibility in their
| existing operations. Say, they want to figure out how much cash
| they have in the bank in 6 months, or can they afford to hire 3
| more ppl next quarter.
|
| Personally, I have found it hard to work with pre-revenue
| companies, especially if they come to me with a plan to hit
| tens of millions in revenue in just a couple of years since
| launching. Maybe a small percentage of them do, but given how
| many don't make even a single dollar I've tried to steer clear
| of pre-revenue startups. Companies with real revenue and growth
| seem to be a much better fit.
| stephnass wrote:
| I feel like there 2 very different use cases for financial
| models:
|
| - Early-stage fundraising. The numbers are wrong, everybody
| knows it, but you have to show that curve going up and right.
|
| - Later-stage (maybe 1-year post-revenue?) when there is some
| level of robustness behind the numbers, and you do it because
| it's useful to pilot the company
| JaakkoP wrote:
| Agree 100%. Very different needs with the two lots.
| 1cvmask wrote:
| That is the same logic of later stage VCs. Which makes me
| appreciate those earlier stage investors even more as it is
| really tough statistically to pick the winners.
| JaakkoP wrote:
| Thanks for putting so much work into comparing all these models!
| I'm the author of #3, and a founder of a financial modeling
| software company (the latter not reviewed here)
|
| One thing I'd add for anyone comparing these models for their own
| use: Make sure the model you're going to use covers the authors
| #1-5 criteria for the parts _you need._ More features isn 't
| always better. For example, if you run a marketing driven SaaS
| company, it doesn't matter if the model in question can't handle
| complex enterprise sales.
|
| I have a big update coming to the model this coming week. All of
| those changes have been made in the actual model template already
| if were planning to take a look - it's just the update to the
| documentation that's still missing.
| gk1 wrote:
| Shortcut to template:
| https://docs.google.com/spreadsheets/d/1nj0LtyG6Q9HhXk-iaj9-...
| lpolovets wrote:
| Great list. FWIW, a lot of SaaS companies use the second template
| from Christoph Janz when they're raising their seed rounds.
|
| If anyone's interested in additional content about financial
| modeling, I described ~10 common mistakes I see in financial
| models a few months ago:
| https://twitter.com/lpolovets/status/1188979329935409152
| ignoramous wrote:
| > _I described ~10 common mistakes I see in financial models a
| few months ago: twitter.com
| /lpolovets/status/1188979329935409152_
|
| Mirror:
| https://threadreaderapp.com/thread/1188979329935409152.html
| gloryless wrote:
| Nice work. I really appreciate acknowledging the landscape and
| sharing that work before putting your own into the mix.
| Underrated step
___________________________________________________________________
(page generated 2020-05-03 23:00 UTC)