Today I’m going to give you my killer financial projections slide for your pitch deck. It’s exactly what investors want to see.

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. Wait, you say you’re working on your product for the next few months? It’s 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 a ton 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.

Check out our free mini-course on financial modeling for a great walkthrough!

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. Goetzmann, 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.

And some entrepreneurs either don’t how to create a financial model or they don’t know how to present their projections in the 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:

  1. I’ll teach you how to build out a financial projection in the email course below
  2. I’ll give you my favorite financial slide template for your pitch deck
  3. I’m hosting a Financial Projections Bootcamp on Wednesday, 9/27 to teach you everything you need to know about your startup financials.

Problem solved!

The Best Financial Projections Slides for Your Pitch Deck

Here’s our favorite financial slide template (which you can grab for free as part of the email course). This is for a subscription SaaS or “software-as-a-service” company.


(Click on the #s above to see them larger)

Some founders push back that this looks too complicated, but I find it’s exactly what investors want to see. If you insist on having something simpler in your pitch deck then make sure you have this ready in the appendix if someone asks.

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 guess based on what you’ve learned.

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 today who said he was embarrassed by the first financial projections he put together. 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 break out the first year by months. I’ve tried doing it by quarter instead and I always get complaints from investors.

I show three years total, with the first year both broken out by month and show in summary. Years 2 and 3 are only shown in summary.

I also show the revenue numbers in thousands, because hopefully I’ll be generating enough revenue that all of the zeros will make my financial projections look crowded. All this means is that I divide the dollar amounts by 1000—so $6,000 becomes $6 and $23,000,000 becomes $23,000.

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 (number of units sold) and bottom (cash flow).

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 surprised happen on the up-side rather than the down-side. Like when you underestimate your revenue and overestimate your expenses.

The Anatomy of an Income Statement

The basic formula is Total Revenue minus Cost of Sales (COGS) equals Gross Profit. 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 EBIT (you can probably also call this EBITDA in your startup).

Here’s a visual:

 + Revenue

 – Cost of Sales (also called Cost of Goods Sold or COGS)


 = Gross Profit

 – Expenses (S&M, R&D, G&A)



The Key Ingredients of Your Financial Projections

Here’s what investors want to see in your financial projections:

  1. # of Units / Subscriptions Sold
  2. Revenue
  3. Cost of Sales (Cost of Goods Sold)
  4. Gross Profit
  5. Operating Expenses
  7. Headcount
  8. Cash Position

The key is to provide enough detail that investors can understand your business model, but not so much detail that the slide becomes confusing.

If an investor is interested you’ll have the opportunity to provide more detail, so don’t worry too much if you’re leaving some of the complexity of your business model out of this top-level slide.

For example, if you’re selling an IoT (Internet of Things) product like the Nest Camera you might have revenue streams from both unit sales and monthly subscriptions. You could combine both into a single “Revenue” line and then either break key metrics out separately in a separate slide or be ready to give investors the breakdown if they ask.


A Walkthrough of the Financial Projections Template

Let’s review each component of the financial projections slide template individually:

# of Units / Subscriptions Sold

This should be whatever your key metric is that drives revenue growth.

This goal is to give investors a quick glance at how many subscriptions, products, or services are you planning to sell. You’ll want to tailor this to your business model. In this case we’re using Paid Subscribers, since that’s the key revenue driver for this startup.

If you’re not going to have revenue for a while then this should be the key metric that drives the eventual success of your business — which in Facebook’s case might be Daily Active Users. Or if you’re selling physical goods you might use Units Sold.

We also recommend including a line for Growth % to show how quickly your sales will ramp. Investors can use these numbers to sanity-check your projections, especially if they know your industry well.


This tells investors how quickly revenue will grow, which may be different from how many units are being sold. Revenue is a key driver for the income statement, and every business must eventually make money in order to survive.

It’s okay to combine multiple revenue streams into a single line here. You can always dive into a detailed breakdown for anyone who’s interested.

Cost of Sales (Cost of Goods Sold)

Investopedia defines Cost of Goods Sold as “the direct costs attributable to the production of the goods sold by a company. This amount includes the cost of the materials used in creating the good along with the direct labor costs used to produce the good.”

This traditionally means:

  • Raw materials
  • Labor costs for turning raw materials into sale-able goods
  • Cost of storing inventory
  • Factory overhead

Many of the business we work with at 10xU are selling virtual products, so I like the term Cost of Sales. For a software-as-a-service company the Cost of Sales would include:

  • Web hosting and other costs to run your production environment
  • Salaries for customer support and training (but not selling expenses)
  • Apps and subscriptions used by support and training teams
  • Cost of any third-party data or technology that is included in your delivered subscription

What’s not included in Cost of Sales is credit card fees or sales commissions. I know it sounds weird to say that sales commissions aren’t included in Cost of Sales, but they’re not because sales commissions aren’t part of the shipping product. Same thing with Credit Card fees, which are also viewed as optional.

You can’t make money in your business as a whole if you’re not making money on each unit you sell, so your gross margin should pretty much always be positive. Otherwise you’re literally losing money on every sale—and you won’t be able to make it up on volume.

Gross Profit

Gross Profit is calculated by subtracting Cost of Sales from Revenue. It’s the money you actually have to pay your bills, after covering all your costs of creating the product or service you’re selling.

The key here is the Gross Margin %, which is calculated by dividing Gross Profit by Revenue. Different industries have different Gross Margin %s, and you should aim for yours to be in the right neighborhood by year 3.

You can look up industry-specific Gross Margin percentages (start here and here), and you can also check out the income statements of publicly traded companies in your industry.

If an investor is looking at a SaaS business, for example, they’re expecting to see a Gross Margin % between 80% and 90%.

Operating Expenses

These are your operating expenses (sometimes called “OPEX”), which make up the day-to-day costs of running your business. These are typically divided into:

  1. Sales & Marketing
  2. Research & Development
  3. General & Administrative

As an investor I eventually want to see the breakdown, but for the Financial Projections Slide it’s fine to just show a single line for these expenses.

This is where startups typically spend more than they make in the early years (or apparently forever if you’re Uber).

Purchases of land, buildings, or equipment different. These are capital expenditures (often called “CAPEX”) and are treated differently.

“If the asset’s useful life extends more than a year, then the CAPEX is recorded as an asset in the balance sheet and is expensed using depreciation to spread the cost of the asset over its designated useful life as determined by tax regulations.” —Investopedia

Most software startups don’t have CAPEX, but other businesses do. Internet of Things (IoT) companies, for example, might purchase molds for manufacturing their hardware that degrade over 200,000 units. The purchase is recorded as CAPEX and the expense is allocated proportionally to the COGS for each unit as it is produced. If the molds are $100,000 of CAPEX that means the COGS for each unit produced increases by fifty cents ($100,000 CAPEX / 200,000 units).

CAPEX typically doesn’t appear on the income statement, which is confusing when we’re trying to figure out how much money a startup needs. For startups that need it we’ll add a CAPEX line to our financial projections below the EBIDTA line, to separate it from the regular operating expenses (OPEX).

Depreciation” is simply reducing the value of an asset over it’s useful lifetime in accordance with tax regulations.

CAPEX is only for purchases, and leases are treated as OPEX instead.


EBIT stands for Earnings Before Interest and Taxes. EBITDA stands for Earnings Before Interest, Taxes, Amortization, and Depreciation. For early-stage startups they’re pretty much the same (unless you have CAPEX, see below). You calculate them by subtracting your Expenses from your Gross Profit.

For your purposes, EBIT is the same as “Operating Income” and tells us your startup’s profit or loss.

Software companies without any real CAPEX can use EBIT as their main profit / loss metric. Internet of Things (IoT) companies will want to use EBITDA instead, which stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” This helps you account for your CAPEX.

Investors like EBIT and EBITDA because they’re upstream from where most financial engineering can occur, but neither is a perfect metric.

Companies may be acquired for a multiple of EBIT / EBITDA once they’ve figured out how to turn a profit. Otherwise, if a startup is attracting a ton of attention but not turning a profit yet, it may be purchased for a multiple of revenue, a value assigned to it’s growth trajectory, a dollar value per active user, or really whatever the buyer and seller can agree to.

“Basically, high-growth web properties are being valued on growth, the ultimate utility of the base they are creating, and the valuation floor created by prior funding rounds (assuming they are in a position of strength).”  — Quora


It takes people to run a successful business, and investors want to see how many you expect to need. Even virtual companies need management, developers, marketing, sales, and customer support.

As revenue grows investors expect to see both the expenses and the headcount grow:

  • Cost of Sales (COGS) grows directly with the number of units / subscriptions sold.
  • Operating Expenses (OPEX) also needs to grow with revenue, but the relationship may be indirect. You might be able to spend three years in the same office, for example, even if you have to cram in some extra desks.
  • Headcount usually grows with the revenue, because you need a larger team to sell and service your customers.

Headcount that doesn’t grow with revenue is usually a red flag for investors—unless you’re on the bleeding-edge of automation (and even then we find that it still takes more people to generate more revenue).

Once we know the headcount we can calculate Revenue per Employee, which is one of my favorite sanity-checking metrics.

Here was the Revenue per Employee for some major tech companies in 2015:

  • Apple: $2,136k
  • Facebook: $1,413k
  • Google: $1,206k
  • Amazon: $464k
  • Twitter: $462k
  • Yahoo: $450k

And just to compare with traditional companies:

  • Procter & Gamble: $693k
  • Wal Mart: $221k
  • Mattel: $184k

So if you’re telling investors that your company is going to make more money per employee than Apple…they probably won’t believe you.

Professional investors want to find reasons to say “no” to deals, and you may have just offered them the chance with wildly optimistic projections for Revenue per Employee.

Cash Position

This doesn’t appear on a regular income statement, but it’s vital to the life of your startup. If you run out of cash you die.

There are, in fact, several items that affect your cash position that don’t show up on a regular income statement:

  • Starting Cash Position—How much money do you have in the bank right now?
  • Investment Money—Cash that you raise from investors either as equity or convertible note.
  • Capital Expenditures (CAPEX)—Purchases of property, buildings, and equipment with a useful life of more than one year.
  • Cash Position—How much is projected to remain in your bank account at the end of a particular month or year.

This template ignores investment money and CAPEX. The Cash Position line shows you about how much you need to raise:


(Click on the #s above to see them larger)

The lowest negative number we can see is -$639k — and we should probably have a buffer in case things don’t go as planned — so we might raise $700k (or more, depending on how confident you are in your projections).

Optional Items to Include

Here’s our best financial projections slide template for an Internet of Things (IoT) company with revenue from both unit sales and subscriptions:

(Click on the #s above to see them larger)

Other things you might show in your financial projections slide:

  1. Investment Money Raised and/or CAPEX (Capital Expenditures)
  2. Multiple Revenue Streams
  3. Salaries
  4. Interest, Taxes, Depreciation, Amortization
  5. Breakeven
  6. Other KPIs (Churn, CAC, LTV)

Let’s break each down individually:

Investment Money Raised and/or CAPEX (Capital Expenditures)

Here’s an example of how you might include both Investment and CAPEX at the bottom of your financial projections in addition to Cash Position.

In this case we’re starting this plan once we’ve raise $800k, we’re buying $250k worth of equipment (CAPEX) in month 3, and we’re raising an additional $3 million in year two to fund growth:


(Click on the #s above to see them larger)

Now we’ve lost our negative number and we can see that we have a $52k buffer if our plan doesn’t work out as expected.

Multiple Revenue Streams

Total revenue is key here, so if you absolutely must show multiple revenue streams then be sure to include a total revenue line as well. Your revenue section can look like this:


(Click on the #s above to see them larger)


Salaries are the biggest expense for most startups, so you may want to break the total out separately. If so, do it below the financial projections so that you don’t accidentally account for the expense twice. Remember that all of your salaries have already been subtracted as part of Cost of Sales and Operating Expenses (Sales & Marketing, Research & Development, and General & Administrative).

Interest, Taxes, Depreciation, Amortization

These items are very important when running your business—and making enough money that you have to pay taxes is actually a good thing. Most startups, however, can ignore them at first. One exception is if your business has big CAPEX needs.


If you’re selling a single product or service it’s helpful to calculate how many you would have to sell to break even. You would divide your Operating Expenses (Sales & Marketing, Research & Development, and General & Administrative) by the Gross Profit for a single unit.

For example, let’s say that you sell widgets for $10 and the Cost of Sales per unit is $3. Your Gross Profit for a single unit is $7 ($10 minus $3). Your total Operating Expenses are $535k.

You would need to sell 76,429 widgets in order to break even ($525k in Operating Expenses divided by $7 Gross Profit per unit).

So your Breakeven is 76,429 widgets.

Other KPIs

You might want to let investors know about other key metrics such as:


How many of your subscribers stop using your service every month. You can use this to figure out how many months your subscribers stay active:

Divide one by the percentage of your subscribers who left last month to get the average number of months each of your subscribers will stick around.

So if 5.2% of your customers left last month your average subscriber lifetime is 19.2 months (calculated as 1 divided by .052)

Cost to Acquire a Customer (CAC)

This is your total sales and marketing spend—including salaries—for a period divided by the total number of sales you made in that same period.

So if you made 100 sales in the past month while spending a total of $50k on advertising, marketing, and salaries for sales & marketing…your CAC would be $500. Remember that this is per customer, so you’ll want to reference Lifetime Value (LTV) below to ensure that you can eventually make that money back.

CAC may also be referred to as COCA (Cost of Customer Acquisition) or CPA (Cost per Acquisition).

Lifetime Value (LTV)

How much you expect to make off of the average customer. For a subscription business this is the Customer Lifetime (in months) times the Gross Profit per month.

So if your subscription costs $10 per month and your Cost of Sales per subscription per month is $3, your Gross Profit per unit is $7 per month ($10 minus $3).

Your LTV (Lifetime Value) is your Gross Profit per unit per month multiplied by your average subscriber lifetime.

So your LTV is $134.40 in the example where your Gross Profit per unit per month is $7 and your average subscriber lifetime is 19.2 months.

For a hardware business it’s easy to end up with only a single purchase—so your LTV is simply the Gross Profit on one unit. That’s why you see Nest (and Dropcam) offering monthly subscriptions in addition to the purchase price.

I know an investor who put money into a late-stage IoT company purely because they were seeing a 90% renewal rate in their annual memberships. He didn’t care at all about how many hardware devices they were selling.

I also know an entrepreneur who’s business model is only selling hardware devices—without a subscription—and it’s been harder (but not impossible) for him to raise funds. Now he’s planning to add a subscription.

Some Common Mistakes With Financial Projections

I never used to understand the story the financial projections were telling. It just looked like a bunch of numbers to me. It just looked complicated and made my brain freeze up. That’s how we all start out, and it’s frustrating because we don’t know what we don’t know.

Then I started building my own financial projections. I started looking at other people’s projections. I learned some basic accounting and started paying attention to my company’s QuickBooks reports. I started creating budgets and running my business of of them.

Finally I started to understand.

Then I looked at a thousand more pitch decks.

Now I can glance at a financial model and see the story it’s telling. I get a quick sense of how realistic it is, and how good the person is with numbers.

Here are some of the quick sanity checks I do:

  1. Expenses Don’t Grow with Revenue
  2. Headcount Doesn’t Grow with Revenue
  3. Revenue per Employee is Unrealistic
  4. Cost of Sales (COGS) Is out of Line for the Industry
  5. The Founder Is Raising Too Much Money…

Let’s unpack each of these:

Expenses Don’t Grow with Revenue

Cost of Sales / COGS is directly tied to each unit sold, so it should grow along with revenue.

Operating Expenses will likely grow too. You probably have to increase your sales and marketing budget in order to grow your sales 10x.

The first sanity checks I do with any financial model is looking to see how Cost of Sales and Operating Expenses grow with revenue.

Cost of Sales (COGS) Is out of Line for the Industry

You can look up industry averages, as well as company-specific gross margin percentages. If I’m looking at financial projections for a SaaS company that are only 30% (vs. the 85% that I’m expecting) I want to know why.

Headcount Doesn’t Grow with Revenue

You also probably have to hire more people (and get a bigger office) in order to grow your sales 10x.

If I see that headcount isn’t projected to grow with revenue I immediately become suspicious about how realistic these financial projections are.

Revenue per Employee is Unrealistic

We talked about revenue per employee for big companies. I’ve only seen one startup actually do more revenue per employee than Google.

Everyone else who claims this—especially when they don’t have the data to back it up—sets off alarm bells in my head.

The Founder Is Raising Too Much Money…

…relative to the stage of the company and the projected growth. I was looking at a pitch deck yesterday where the founders are trying to raise $15 million on what appears to be $800k of revenue. Try to raise the right amount of money for your current stage. Then use the money to grow. Then come back for more money. It’s difficult to shortcut the process.

The other problem with raising a lot of money is that it’s difficult to exit. If I raise $15 million and my investors are looking for a 10x return, I need to sell for $150 million. But it’s easier to find someone to buy your company for $50 million rather than $150 million.

Keep your eye on the exit as you raise money.

You will get the Financial Projections Slide Templates + more useful info as part of our free mini-course:

How to Use the 10xU Financial Projections Slide Template

We’ve included two versions: one for subscription (SaaS) business and one for Internet of Things (IoT) businesses. You can simply copy the slide and paste it into your own Google Slides presentation. Or you can download the slide as PowerPoint from the Google File menu.

  1. Update the template with your financial information (or join our bootcamp for info, training, and a copy of the spreadsheet behind our template).
  2. Change the colors of the text and the background as needed. I prefer to format the columns for months and years differently so it’s immediately obvious which is which.
  3. Change the font to match your branding.

You should assume that anyone and everyone will see your pitch deck. This is usually what you want, but you can also hold back any sensitive information and only show it to potential investors you trust. For the most part it’s okay to share financial projections precisely because they’re educated guesses.

Next Steps for Your Financial Projections

Still have questions? I’ve put together an easy-to-use spreadsheet (yes, I promise it’s easy to use!) that I used to create this slide. It gives me the detail I need both to talk to investors and for budgeting when running the company.

Join our Financial Projections Bootcamp on Wed, Sept. 27th if you want a walkthrough along with your own copy of the spreadsheet. You can attend either virtually—or in-person at the 10xU learning center in Miami.

I’ll teach you how to feel confident talking numbers with investors, advisors, your team…and yourself.

Learn more about the Financial Projections Bootcamp here.

And please share your financial projections with us, especially if you have questions or need help. We’ll happily update our slide template to make your life easier!

Written by Mike Lingle — Find more practical suggestions for entrepreneurs at or connect with me on LinkedIn.

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