I ended up in a position where I had to start creating a financial model for internal use but also for potential investors.

Consequently coming from a engineering background, I had little to no experience. And many financial models online was either not the same industry, not the same stage, or too complicated.

At the end of the day, our investor from last round (brilliant guy) put us in contact with a couple of entrepreneurs. They dedicated a few hours each to help me understand what was missing.

Ultimately, it helped me be less overwhelmed with it. But a few things I learned from this experience:

  1. Get the first version out (so there is structure for people to comment on) ASAP
  2. Iterate based on feedback you get. Easiest way to disappoint people who spent time is not to take their feedback seriously. Go through their thought process if you disagree so you can understand their perspective.
  3. Financial model is vital for internal use not just for investors. Your assumptions can change as you learn things and ideally it can reflect a different environment for the company. It may require a change in strategy. Modeling based on your assumptions as much as possible allow you to quickly understand when things are going to a dark path
  4. Keep it up to date as things evolve. It is a living, breathing document

Whew, time to go back and add more details :)

Albert Tai

Co-founder / CEO of @HypercareHq, helping clinical teams coordinate patient care seamlessly. Passion in good products. Alumni of Microsoft, University of Toronto, and Western University.

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