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A VC Asked to See My Financial Projections: Here’s What Happened
- Financial projections are a tough area for founders to handle, especially since projections could be more fictional than factual.
- When an entrepreneur finally scores a meeting with a big-time VC, and they’re asked to present the company’s financial projections, it is both an exhilarating and anxiety-inducing experience.
- While presenting their product, the VC asked to take a look at their financial projections, an area of particular discomfort for the entrepreneur. But instead of panicking and bullshitting her way through the meeting, she found the courage to admit that their projections were based on the best facts they had at the time, but that they would remain in a state of flux so long as new information was coming in.
- VCs look for founders who know how to handle questions with aplomb, particularly when it comes to financial forecasts. An honest and open approach can go a long way.
- It's important to have a strong understanding of your business so that you can explain how you're thinking about growth, even if you don’t have everything figured out. Be transparent about your assumptions and acknowledge what you don't know.
- VCs don't want to hear a perfectly rehearsed pitch; they want to have a conversation. So, entrepreneurs should be ready to pause, take a breath, and be real.
- The writer realized that financial projections are just one piece of the puzzle and that investors are looking for something less tangible such as how a founder handles pressure, responds to tough questions, and confronts unknown challenges.
- VCs want to know whether entrepreneurs are willing to figure things out or if they'll crumble under pressure.
- Having a solid understanding of the business and being truthful about what you know and what you don't know can go a long way in building investors' trust.
- Entrepreneurs shouldn't panic when presenting their financials. Instead, they should focus on conveying a holistic understanding of their business's growth patterns, transparent assumptions, and how they plan to adapt based on new facts.
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