Blog · 12 Mar 2026

Financial projections that survive the second meeting

Every founder knows the five-year projection is fiction. Every investor knows it too. So why does the model still matter?

Because the model is not a prediction. It is a demonstration that you understand how your business converts money into growth. The revenue line is the least interesting part of it.

What the reader is actually checking

• Do your assumptions connect? If headcount grows fourfold and support costs stay flat, the model is decorative.
• Do you know your unit economics? Cost to acquire a customer, gross margin per customer, and how long a customer stays. If these three are absent, nothing else in the model is meaningful.
• Is the ask consistent with the plan? The amount you are raising should fall out of the model, not be picked first and justified afterwards.

Build it in the order the money moves

Start with drivers, not outputs. A workable structure:

1. Acquisition. How many customers arrive each month, and through which channel. Each channel gets its own cost and its own conversion rate.
2. Revenue. Price, multiplied by customers, adjusted for churn. Keep one-off revenue separate from recurring revenue.
3. Cost of delivery. Everything that scales with a customer: hosting, support, payment fees, fulfilment.
4. People. Usually the largest line. Name the roles and their start months rather than using a lump sum.
5. Everything else. Rent, tools, legal, marketing that is not directly attributable.
6. Cash. Opening balance, monthly burn, closing balance, and the month it hits zero.

If you build in that order, the model tells a story. If you build revenue first and pad costs to fit, it will not survive questioning.

Runway is the number that matters

Investors will find your zero-cash month faster than you expect. Know it before the meeting, and know what you will have proved by the time you reach it. The strongest answer sounds like: "this raise gives us nineteen months, and by month fourteen we will have shown that paid acquisition works at under a certain cost per customer, which is what a Series A needs to see."

That answer shows the raise is a step in a plan rather than a way to keep the lights on.

Three habits that cost founders credibility

The hockey stick with no mechanism. Growth accelerating in month eighteen is fine, if something causes it. Name the cause: a channel that unlocks, a product that ships, a market that opens.

Forgetting that people cost more than salary. Employer contributions, equipment, recruitment and the productivity ramp of a new hire are real. Budget a meaningful uplift over base salary.

Zero churn. Every model with no churn is immediately discounted. Put a number in, even a pessimistic one. It signals you have thought about retention.

Keep two versions

Keep a detailed working model for yourself and a summary for the room: monthly for the first eighteen months, annual after that, with the assumptions visible on one page. If someone wants the detail, they will ask, and then you get to look prepared.