Financial model building for companies looking to raise funds

A financial model is a crucial tool for any business looking to raise funds, whether through equity, debt, or other financing avenues. It provides investors and stakeholders with a comprehensive view of a company’s financial performance, projections, and the feasibility of the business plan. A well-structured financial model helps businesses demonstrate their value, potential growth, and ability to repay loans or generate returns, making it an essential step in the fundraising process. By building a financial model, companies can present data-driven insights that support their business strategies and funding requirements.

Documents Required

General Business Information

Business Registration Certificate

MOA and AOA (for Companies) or Partnership Deed/LLP Agreement

PAN Card of Business

Shareholding/Ownership Structure

Financial Documents

Financial Statements for the last 3–5 years

Tax Returns (Income Tax, GST, etc.) for the last 3 years

Bank Statements for the last 6 months

Debt and Liability Schedule

Business Plan and Projections

Business Plan Document

Revenue and Expense Forecast for 3–5 years

Detailed Cash Flow Projections

Cost of Capital and Debt Schedule

Assumptions Used in Financial Projections

Process Timeline

Initial Consultation and Objective Setting

Understand the client’s business, funding needs, and the purpose of the financial model (e.g., attracting investors, securing loans, or IPO preparation).

Data Collection and Analysis

Gather historical financial data, business plans, market analysis, and key assumptions related to revenue projections, expenses, and funding requirements.

Define Key Financial Drivers

Identify the key financial metrics and drivers that will impact the business model, such as sales growth, cost structure, margins, capital expenditure, and working capital.

Selection of Financial Modeling Approach

Choose the appropriate financial model type, such as a Discounted Cash Flow (DCF) model, comparable company analysis, or LBO model, based on the funding strategy.

Building Revenue and Expense Projections

Create detailed projections for revenues, operating costs, capital expenditures, taxes, and working capital, based on historical trends and market assumptions.

Constructing Cash Flow Statements

Develop cash flow projections, including operating, investing, and financing activities, to highlight the company’s liquidity and financial health.

Financial Statements Integration

Integrate the income statement, balance sheet, and cash flow statement to ensure consistency and coherence in the financial model.

Scenario and Sensitivity Analysis

Run various scenarios (e.g., base case, optimistic case, and pessimistic case) and sensitivity analysis to evaluate the impact of changes in key variables (e.g., sales, costs, funding).

Valuation and Funding Needs Estimation

Estimate the company’s valuation using appropriate methodologies (e.g., DCF, multiples) and calculate the amount of funding required to achieve growth objectives.

Investment Returns and Exit Strategy

Model potential returns for investors, including equity dilution, exit multiples, and timing, to demonstrate the investment’s profitability.

Drafting the Financial Model Report

Document the financial model, assumptions, and key findings in a structured report that explains the model’s outputs and supports the funding request.

Client Review and Refinement

Share the draft model with the client for review, gather feedback, and make any necessary adjustments to align the model with the client’s strategy.

Finalizing the Financial Model

Finalize the financial model, ensuring accuracy and alignment with the business goals, and present it in a format suitable for investors or lenders.

Ongoing Support

Offer ongoing support to refine the model for future funding rounds, strategic decisions, or performance tracking.

Find the Perfect Fit for Your Budget

Choose from our range of flexible pricing options that cater to your specific needs.

₹29,999

Basic Plan

A brief description goes here

Get Started

Initial consultation to understand business model, financial goals, and funding requirements

Creation of a basic 3-year financial model (Revenue, COGS, EBITDA, and Net Profit)

Assumptions and projections based on historical financials and industry benchmarks

Simple financial statements (P&L, Balance Sheet, and Cash Flow)

Guidance on the structure of fundraising (e.g., equity vs. debt)

Email support for 1 month post-service

₹59,999

Standard Plan

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Get Started

In-depth consultation to analyze business goals, growth strategies, and funding requirements

Comprehensive 5-year financial model including detailed revenue forecasting, operational costs, capital expenditures, and working capital

Sensitivity analysis to assess the impact of different scenarios on cash flow and profitability

Financial statements with projections (P&L, Balance Sheet, and Cash Flow) including key performance indicators (KPIs)

Capital structure optimization advice (equity, debt, convertible notes, etc.)

Guidance on presenting financials to investors and lenders

Email and phone support for 3 months post-service

₹99,999

Pro Plan

A brief description goes here

Get Started

Extensive consultation to refine the business plan and align the financial model with strategic objectives

Advanced 5-7 year financial model, including detailed analysis of revenue streams, cost structures, and EBITDA margins

Inclusion of scenario analysis and financial forecasting under various business growth and funding conditions

Integration of industry-specific metrics and benchmarks for a tailored approach

Support with investor-ready documents such as Pitch Deck and Investor Presentations

Detailed guidance on fundraising strategies (venture capital, angel investors, debt financing, etc.)

Sensitivity and break-even analysis to project capital needs and repayment schedules

Extended email, phone, and on-site support for 6 months post-service

Frequently Asked Questions

Find answers to commonly asked questions about our products and services.

What is a financial model, and why do I need one to raise funds?

A financial model is a tool that projects the future financial performance of your business, including income, expenses, and capital requirements. It is essential for raising funds because it helps investors assess the potential return on investment, understand the financial risks, and validate your business plan.

How long does it take to build a financial model?

The time required for building a financial model can vary based on the complexity of the business, but it typically takes 2-4 weeks to complete a comprehensive model.

Can I use the financial model for multiple funding rounds?

Yes, once the model is built, it can be adapted for future funding rounds by updating the assumptions and projections. It serves as a foundation for investor communications.

What types of funding can the financial model help raise?

A well-constructed financial model can help raise equity financing (from angel investors, venture capital, or private equity), debt financing (from banks or financial institutions), or crowdfunding.

What are the key components of a financial model?

A financial model generally includes revenue projections, cost assumptions, capital expenditures, financing assumptions, valuation, and scenario analysis. It may also include detailed cash flow projections and a break-even analysis.

Can I raise funds without a financial model?

While it’s possible, having a financial model significantly increases your chances of securing funding. It helps communicate the business’s value and potential return on investment to investors.

Can you help me raise funds once the model is built?

Yes, after building the financial model, we can assist you with preparing investor presentations, pitching to investors, and providing support during the fundraising process.

Do I need to update the model regularly?

Yes, it’s essential to update the model periodically to reflect actual performance, adjust assumptions, and keep it aligned with your business’s changing financial landscape.