Assumption based financial models

Assumption based financial models

• The goals is to learn and adjust the financial model “Learn as you go”

• Define the key assumptions underlying the financial model

• What MUST be true for the business to reach it’s financial forecasts

• What experiments or information must be gathered to prove the financial model

Rate of customer acquisition

What are the metrics that matter? (15 mins)

• Speed of acquiring parking lots?

• Average parking lots per new customer?

• Reservation per parking lot?

• No. of reservations?

• Reservations per parking lot / year?

• Gross margin per reservation?

• Web server costs?

• Website production costs?

What are the metrics that matter?

• Speed of acquiring parking lots?

• Reservation per parking lot?

• No. of reservations?

• Reservation per parking lot?

Why investment readiness level?

• Goal for entrepreneurs

• Common language for investors and entrepreneurs

• A gauge to inform investment decisions

• Data that entrepreneurs need to collect

• Adapted to fit each industry

Therapeutics

Digital health

Diagnostics

Microsoft – Investment readiness

ID assumptions, Competitive analysis, Tech skills

Execution ability & Coachablility

Find early adopter customer

Optimise messaging

Price testing

Build MVP

Customer satisfaction and retention (NPS)

Scaling costs (CAC)

Full assumption based financial model

Design an investment readiness scale for your industry

• Form relevant groups of 4 to 6 loan officers

• What does an investment readiness scale for your industry look like?

• What key data do you need from entrepreneurs?

• What are the metrics that matter?

• Choose a presenter

• Prepare a 2 minute presentation

Tea Break