Mike Lingle at Rocket Pro Forma
The Best Pitch Deck Financials Slide
Updated: Jun 21, 2021
My 3-year financial projection template for startups
Today I’m going to give you my killer financial projections slide for your pitch deck. It’s exactly what investors want to see, and you can grab it here.
My formula is:
One or two key metrics (KPIs)
Income statement (Profit and Loss or P&L)
This format gives both you and your potential investors everything you need to see to understand your startup's financials at a glance. It shows you everything you need at a glance, tells a complete story, makes you look smart, and helps you impress investors. It's also great for running your business—even if you're not raising money.
Here's a video walkthrough of my financial projections slide template:
When you're raising money it's important to have a financial plan to present to investors. They want to see that you've thought about your costs and your growth. They want to be able to talk with you about your numbers and the assumptions behind them—even though they understand that reality will turn out to be different than what you're projecting.
Imagine that you're the investor and you're about to hand thousands—or millions—of dollars to a startup. Would you want them to have a handle on their financials?
The good news is that you don't have to become a financial whiz or a math expert! You just need to understand the basics and be able to present them to investors. This article will help you get there.
The Best Financial Projections Slides for Your Pitch Deck
Here’s my favorite financial slide template. This is for a subscription (SaaS or “software-as-a-service”) company, and I'm using condensed version of the slide, which is my favorite simplified format to impress investors:
Some founders push back that this looks too complicated, but I find it’s exactly what investors want to see. Believe it or not, I simplified this from a version I used to use with all twelve months broken out for the first year.
You can grab the pitch deck financial slide template here, and I've included a few different versions:
Condensed Version (quarterly in the first year) or Full Version (monthly in the first year)
Presentation Slide or Spreadsheet Tab
Want the full spreadsheet template for your financial projections that automatically creates this pitch deck slide for you? Check out Rocket Pro Forma.
What If You're Not Raising Money?
Even if you’re not raising money, it’s important to get in the habit of creating and sticking to a budget for your company. Successful startups know how to manage their cash flow. You'll get better at making predictions the more you practice.
Wait, you say you’re working on your product for the next few months? It’s still important to start thinking about cash management now. You’ll thank yourself later for being prepared before things start moving more quickly.
The first time I sat down to write out my business plan (yes I’m that old lol) I didn’t know how to do the “Pro Forma Financial Projections” so I just left it out. I didn’t even know what “Pro Forma” meant.
Since then I’ve helped raise millions of dollars for both my own and other founders’ startups. I’ve put together hundreds of pitch decks—and I’ve reviewed thousands more. In this article I’ll make it easy for you to create killer financial projections by sharing what I’ve learned.
Oh, and in the startup world, “Pro Forma Financials” mean forward-looking financials based on assumptions. They’re your best estimate of your future results.
Finance Is the Language of Business
Indeed, writing, when it first developed in ancient Sumer, was invented for financial contracting and accounting.
— William N. ::, Yale School of Management
Some of the entrepreneurs I talk to are great with numbers. This is always refreshing, and it gives me confidence in their ability to execute.
Other entrepreneurs either don’t how to create their financial projections or they don’t know how to present their pro forma in their pitch deck.
It’s crucial for founders to either understand their numbers or find a co-founder who does (and even then you’ll want to learn what’s going on).
We’re going to tackle both issues, and I’ll give you my favorite financial slide template for your pitch deck.
What to Expect
Yes we all understand that these financial projections are a guess. It’s important, however, that they’re your best guess. Your job as an entrepreneur is to make your best prediction…and then go out into the world and prove yourself either right or wrong. Then come back and update your best guesses based on what you’ve learned.
One major benefit is that you'll build a mental map of how your business works in terms of revenue, costs, and cash flow. You'll identify a ton of questions you need to start finding answers to. That's okay because it's part of the process.
Take the time to put something together that you think can work.
Don’t worry that it’s not perfect. You’ll improve it as you move forward, both from what you learn as you try to hit your numbers and from the feedback you receive from investors.
I was talking to an entrepreneur who said he was embarrassed by the first financial projections he put together. So was I! I told him that’s what’s supposed to happen. We all learn by doing so just get started.
Keep at it, ask for help, and don’t get discouraged. It took me a few tries and several years before I truly started understanding financial projections (and that was while I was already running my startup). But don’t worry because I’m giving you a huge head start.
How Do I Make Money and How Much Does It Cost Me?
These are the two main questions in every investors mind, and this slide tells them exactly what to expect.
It’s important to provide more detail in the first year. I used to do every month, but now I like starting with the first three months followed by the next three quarters. Sometimes investors ask to see every month of the first year, which is why I built my Rocket Pro Forma financial projections template to automatically create both slide versions.
Revenue is imaginary while expenses are real—until you prove otherwise in the real world.
I then show year 1 in summary as well, followed by summaries for years 2 and 3.
I used to build. 5-year financial projections but no one seems to be able to predict that far ahead anymore.
Investors are looking to sanity-check what the entrepreneur is telling them, so we’ll give them enough info to do this at a glance. It’s best for both your startup and your investors if you err on the conservative side, so that any surprises happen on the upside rather than the downside. Startups have a habit of underestimating their revenue while also underestimating their expenses.
Remember that revenue is imaginary while expenses are real—until you prove otherwise in the real world.
The Anatomy of an Income Statement
I find that financial projections work best when constructed as an income statement (also called a profit and loss statement) with a little bit of extra info at the top (key metrics) and bottom (headcount and cash flow). Let's do a quick review of the income statement.
The basic formula is Total Revenue minus Cost of Sales (COGS) equals Gross Profit, which is the money you have left to pay your Operating Expenses. From here, Gross Margin % equals Gross Profit divided by Total Revenue.
Subtract Operating Expenses (Sales & Marketing plus Research & Development plus General & Administrative) from Gross Profit to arrive at EBITDA (you may also hear some startups call this EBIT, although technically EBITDA is different than EBIT).
Here’s the formula for the income statement:
– Cost of Good Sold (COGS or sometimes Cost of Sales in an online business)
= Gross Profit