When showing financials to prospective investors, how do you account for not knowing when the new investment will actually happen?



Rookie error.

Investment should NEVER increase growth in a model.

Investment should only SUPPORT growth.

So, put the money into the model at a logical date vis-a-vis when you are raising it (e.g., 2 months out).

But if you need money to grow, you are doing it wrong.

You should grow.

Then raise money to keep the engine humming, and feed the machine.

Whenever I hear “we need the money to grow”, I’m always out as an investor. 100% of the time.

That’s just not the way pre-nicorns work.

View original question on quora

Published on October 16, 2016

One Comment

  1. …but if you have +ve unit economics and a replicable sales machine, the amount of cash you have “may” determine your growth rate….if you don’t raise, slow your growth to survive and go cash flow +ve, or raise and accelerate growth…..Seems like a valid question….

Leave a Reply

Your email address will not be published. Required fields are marked *

Share This