Top 5 financial projection and valuation tools for startups
8th August 2019
Until you start the process of fundraising, it’s easy to think that creating your pitch deck will be easy. I mean, it’s just 15 slides with a few bullet points on it after all. However, as any startup that has been successful in convincing investors to part with their cash will tell you, this couldn’t be further from the truth.
Through our Perfect Pitch service, we turn bland boring business plans into vibrant and exciting investment decks. This means we see many business plans, and through our PitchPrepTM formula, we help many startups refine and develop their business case to ensure they have all the information they’re going to need to excite, inspire and convince investors.
But one of the areas in which we see so many startups struggle is with their financial projections. When we ask for this information, so we can correctly summaries the financial opportunity to investors, we’re often underwhelmed with what we’re presented with – and that’s if we’re presented with anything at all. And if we’re underwhelmed, you can bet that the potential investor you’re pinning your future hopes and dreams on will be too.
You see, it seems that while your typical founder is great at creating an awesome business idea, they’re not so good at creating a solid set of financial forecasts – and why would they be, they’re not an accountant.
If you’re reading this, then the chances are you’re one of these founders. You have an awesome idea and need to raise money, but when it comes to creating 5 years’ worth of excel spreadsheets, you’d rather stick pins in your eyes.
But don’t fear – we’re here to help. We’ve listed below our five top forecasting and valuation tools for your startup. With these tools, you’ll have a set of investor-ready financials for your startup in no time!
1. iValuation from Investor Connected
iValuation makes creating business financials simple and is designed for both startups and scales ups. And it’s super quick – within an hour you can have yourself a set of investor-friendly financials.
The iValuation interface asks you simple questions across a range of areas from your past financial performance (if you have any) through to your projected earnings. Their software then generates your projection and calculates your valuation using 3 different industry recognised valuation methods – giving you a minimum, maximum and average valuation for your company (making it very hard for investors to argue).
With their automated sense checks, iValuation will make sure your finances add up, while their virtual accountant helps you map your revenue and expenditure. Not only that, but iValuation will give you a financial score between 0 and 999 with detailed analysis so that you can make the necessary adjustments to improve your score.
While it’s not free, it’s great value at just £299 (inc VAT). We think its money well spent.
2. Standard Financial Model by Foresight
So, as we’ve already established, you probably hate the idea of Excel. But bear with us. While staring at spreadsheets isn’t everyone cup of tea, there’s a reason why it’s the most popular financing tool.
The trouble is knowing where to start – staring at a blank Excel Sheet isn’t going to inspire you or explain to you how to nail your financials. This is why the guys at Foresight have created their “Standard Financial Model” Excel template.
It’s super detailed and contains very descriptive instructions to talk you through it, as well a video walkthrough. It’s used by pre-seed companies through to Series B and works with subscription and transaction business models as well as online marketplaces and physical products.
It’s a super-smart template and if you’ve got a good head for numbers is a great tool to get you everything you need to your investment round. But if you’re an Excel noob – this probably isn’t for you.
It’s low cost, with the template costing just $149, with add-ons available – such as full video course to teach you about financial modelling, or 1-hour of consultancy to get you started with your template.
3. Projection Hub
Projection hub looks very slick and you can start in just 30 seconds. You answer a few key questions about your business and industry and from there on your experience is tailored.
The process takes away the confusion of what information you should enter, making it great for those who struggle with numbers.
You simply select your business model, enter what you know about your revenue, expenses, assets and liability and Projection Hub will take care of the projections. You can then download PDF reports to share with potential investors.
They offer a free seven-day trial, which includes up to 3 years projections – and you may get what you need in that time. If you want to keep your access, paid packages cost $25 and $39 a month and come with various extra features as well as email support.
4. Startup Financial Model
Start Financial Model is an online app that helps startups quickly create their financial projections.
You simply input all your financial assumptions, and the software automatically calculates your financial statements. You can input a range of products and service offerings, each with different payment terms and easily test different assumptions. It will also calculate your burn rate and let you know when you’ll run out of cash – handy information when trying to raise investment!
No accounting or finance experience is required, and you can download the input into Excel to share with others and work offline for an additional fee.
There is a seven-day free trial available, so many startups may find that within the 7 days they can get the information they need. But if you want to keep access to your financials, so you can update and adjust over time it’s just $29 per month.
5. Three Year Financial Projection Calculator from Robot Mascot
Sometimes, you don’t need a fancy SaaS product or a super detailed Excel template. Sometimes you just need a starting point to get you going. And that’s where our financial projection calculator comes in. Admittedly it’s an Excel spreadsheet (we’re sorry!) but it’s completely free – so you can’t complain, can you?
We’re not going to try and claim that our freebie is better than those listed above – it isn’t. It’s got fewer features and isn’t so fancy – but it’s often more than enough to help the startups we work with get the detail they need to produce their financial forecasts to a pitch ready standard.
You simply input your monthly revenue for each product or service and list how much you’ll spend each month. We even give a list of the most common expenses to prompt your thinking. By the end, it will spit out your revenue, expenditure and EBITDA in a pitch ready format.
It’s completely free, so why not give it a go, and if it’s not for you, be sure to try out one of the premium solutions mentioned above.