"Conservative" Financial Projections?

As program managers here at the Alliance of Angels, we see 20+ pitches per month. As you might guess, out of those 20+ pitches, we rarely see even one that doesn’t have “conservative” projections. :-) However, we’ve found that investors aren’t as interested in conservative projections as they are in transparency. We find that “aggressively reasonable” projections coupled with full disclosure of the assumptions behind the projections gives investors what they are looking for. This way, investors can see the scenario the entrepreneurs are shooting for while having the information they need to develop their own scenarios.

Other keys for building good, transparent, believable projections include:

• Build from the ground up - avoid building projections that are simply based on taking a percentage of the market.
• Display the projections in an easy to read bar chart.
• Include the key driver(s) (# of customers? # of sales partners signed?) in the bar chart
• Make sure your market analysis, go to market strategy, and projections are all 100% in sync.

Investors love to see a good looking hockey stick at the end of a compelling pitch – just back it up with a full set of assumptions and they’ll have the information they need to decide for themselves if the projections make sense. For a sample financial projections slide and other information about building a great pitch, check out our sample deck or enroll in one of our popular pitch clinics.