Zack KanterVerified account

Both. Top line is basically impossible to predict, but still shows levers/assumptions/how people reply to feedback.

I've never seen a startup financial projection that had any good sense of leavers... Now maybe I've only seen bad projections, but this seems like something public companies don't do terribly well, can you share an example of good leaver analysis?

You can see projected spend on marketing vs sales and think about if one feels like a waste of money. See if one customer segment is projected to dominate revenue (in which case maybe ignoring other segments may make sense). How fast revenue can scale vs headcount. Etc.

I can see that would get at good thought process issues, but I think you would end up arguing over fiction. Why not ask much more short term qs as it would allow much more depth? Eg what is next marketing campaign, where is your sales bottleneck today?

A model saves time in the long run. If you don't have one, I have 30 planning/budgeting-related questions. If you have one, I can look at it for 10 min, have it answer most of my questions, & then ask the 5 questions that are left over. Now multiply across all investor meetings.

It reveals what metrics you are being asked to believe

Yeah, I think this is my point too. None of your metrics will (should!) be the same in 5 years, so it is a test 100% of people fail. Maybe there's some value in showing that you fail gracefully, but I'll wager there is a lot more value in analyzing your metrics for next 6 mo.

Not about KPIs, just about knowing that the company needs to ramp up to x rev by selling y products at z price over 6 months implying a market share and a cash need Just shines a light on what is believable and what is not