Your Pitch Deck Needs to Answer This One Question

On Quora, I saw this question...

Do VCs care about seeing financial projections for all stages of fundraising (seed, series A, B, etc.) or only some? When does it not matter?

I answered the question but I thought it worth repeating here...

It's very difficult to make financial predictions in startups.

As a COO I helped CEO's pitch for funding from VCs on several occasions. We knew and the VCs knew that projections are only as good as the assumptions they're based on.

The earlier the company, the weaker the assumptions.


At seed stage I'd say it's pretty much impossible to create a meaningful financial projection. (By seed I mean the very first funding round before you've proved anything). Until you've proved your major assumptions in your business model canvas, there's no point in pretending that financial projections mean anything. What's more important is that you can be convincing as to the nature of the problem, the size of the opportunity and your vision to solve that problem.

Series A, B, C, D

With progressive rounds, the assumptions become stronger. Cost base, revenue model, seasonality, virality, referrals, repeat usage etc.

In these rounds, financial projections do mean something.

In every situation however, the most important information to share is this;

  • what are you assuming?
  • what are the key levers in the model?
  • what happens when these levers are stressed up or down?
  • how does that affect costs, revenue and therefore cash?
  • what are the "knowns" and "known unknowns"?

Ultimately, it's best to explain your assumptions and have your investor understand these assumptions.

The single most useful question to ask yourself therefore when preparing your pitch deck is this: "what does someone need to believe for this plan to succeed?"

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