How to do Financial Modeling for a Pitch Deck

1. How to do Financial Modeling for a Pitch Deck Financial Modeling may be the deciding factor in gaining investment for your business. It is certainly what investors are the most interested in when you are pitching your business idea to them. That is why having an outstanding pitch deck is so important. But, fitting your financial model on a few slides can be a challenge, so here is the best way to do it. Financial modeling in 4 simple steps Before you even make your Pitch Deck, first make sure your financial model is complete and accurate. It is a number crunching process, but to make the whole experience a bit easier, it can be broken down into four steps: · Collecting data - Start by gathering all of the necessary information you can find. Look into your business’s history in sales, get data from doing market research,

2. anything and everything you can get your hands on. The more the better. · Making assumptions - After getting every piece of information you can find, proceed by making a list of assumptions. This step should be taken very seriously, since the rest of the model will be based on it. · · Forecast the 3 statement model The three statement model consists of income statement, cash flow statement and balance sheet. · Income statement will show your income and expenses for a certain period. · Cash flow statement shows how much money is entering and leaving your business, or how much money your business has at hand for a specific time frame. · Balance sheet shows how much your business owns in assets, liabilities and shareholder’s equities for a given period. · Risk assessment and sensitivity analysis - financial modeling is not complete without testing your model first. By doing assessments and analysis you are checking for any discrepancies in your model, checking to see if it will hold up, and understanding where you may fall within a realistic range. Organizing your financial model on slides After you’re done with financial modeling, the next challenge is trying to figure out how

3. to present it in your Pitch Deck. This is by no means an easy task, and there are a few things to consider: · · Consider the number of slides The whole pitch deck should not contain too many slides. Opinions on the slide number can vary. Some say no more than about 20 slides are necessary, but recently the trend is to keep your presentation down to only 10 slides. Keep in mind that only a fraction of those will be intended for your business’s finances, so your financial model may take up only about one or two slides. · · Consider the visuals Having only a couple of slides for your financial model will force you to get creative when presenting your numbers. The best way is to use visuals to convey information such as graphs and charts. But think about their design as well. It is not just about having an aesthetically pleasing slide, but it should be easy to read. Think about using adequate font and font size, and do not forget about having enough negative space, meaning do not cram your slide with too much text and visuals. Preparing a presentation is not easy, especially if you have a lot of material to work with. A challenge with pitch decks has always been how to present all of your business’s aspects in a limited number of slides, and having to incorporate Financial Modeling into them does not make things easier. Luckily, using the aid of compelling visuals will get the job done every time.