Key Takeaways:
- A financial model helps investors understand your growth plan, KPIs, and valuation.
- Clear summaries and clean assumptions are essential for investor readiness.
- KPIs are your financial story. Without them, your pitch lacks credibility.
- Red flags include unsustainable burn and poor cost structure.
- Treat your model as a living tool, not a one-time deck insert.
In part one and part two of this series, I shared how to build a solid foundation for your financial model and how to use it to forecast growth. In this final installment, we’re looking at fundraising—specifically, how your model can build investor confidence, guide valuation, and support smart decision-making after the raise.
These are the questions I hear most often from founders preparing to pitch.
Why do I need a financial model to raise venture capital?
It’s the story behind your numbers and the foundation for your valuation.
Your financial model gives investors a structured look at where the business has been and where it’s going. It highlights the assumptions you’re making to get from your current state to your future goals, and it helps validate whether that journey is realistic.
It’s also how you make sense of valuation and dilution. If you’re raising $5 million at a $20 million valuation, what does that do to your ownership? How does it impact your runway and growth plan? Too often, founders jump into fundraising without understanding the downstream impact.
The model gives you a way to speak to those tradeoffs with clarity and protects you from giving away too much equity just because you “need the cash.”
What metrics and KPIs do investors care about most?
Industry benchmarks + your unique performance story.
The most important KPIs depend on your business model. For SaaS, that might include MRR, ARR, CAC, LTV, and Churn. For marketplaces, the focus might include GMV, Conversion Rate, and Average Order Value.
At Burkland, we often build KPI dashboards that include both industry-standard metrics and custom KPIs unique to the startup. This dual view helps investors evaluate:
- How the business is being managed
- How it compares to similar companies in the space
Without a model, you can’t track KPIs, and without KPIs, you can’t tell a compelling story about performance or potential.
What makes a financial model investor-ready?
Clear summaries. Defensible assumptions.
KPIs that tell a story. When I build investor-ready models, I focus on two levels of detail:
- Summary View: This is what investors see first. Keep it high level. Roll revenue into a few key streams and group costs into categories like “People,” “Marketing,” and “Ops.” Show the big picture by quarter or year.
- Detailed Tabs: These support the summary. You don’t need to show investors every account, but if they ask a question, you should be able to pull up the backup data instantly.
An investor-ready model also makes it easy to identify growth levers, pressure-test assumptions, and answer questions like, “What happens if this revenue stream underperforms?” or “What would it take to double revenue next year?”
What are red flags investors look for in a financial model?
Unrealistic KPIs, unsustainable cost structures, and weak runway.
Investors will compare your metrics against known benchmarks. If your CAC is 5x industry average or your gross margin is shrinking as you scale, those are red flags.
Cost structure is another one. No investor wants to see half the raise go straight into payroll. A solid model shows thoughtful use of funds, with burn and runway aligned to milestones. These days, most investors expect a raise to provide 24–36 months of runway.
If your model only gets you 12 months, or if you’re overspending in the wrong areas, that’s a risk signal. The model is your opportunity to show investors you’ll be smart with their money.
Final thoughts for founders preparing to fundraise
Your model is the starting point, not the finish line.
Building a solid financial model is essential, but it’s just the first step. The real power comes from using it consistently, integrating it into your operational rhythms, and updating it as the business evolves.
I’m thinking of one particular client who initially came to Burkland three years ago for help preparing a model ahead of their Series A. The model we developed helped them raise the round, and they’ve continued using and evolving it through Series B and C. Today, it’s a core part of how they operate. We meet weekly to review actuals, adjust forecasts, and use the model to guide key decisions.
This kind of ongoing relationship isn’t rare. Many of our most successful clients use their model as a central tool for running the business, not just for fundraising.
Founders wear a lot of hats, but building and maintaining a model that ties to your fundraising strategy shouldn’t be something you do alone. Burkland works with startups to build their financial model, help interpret it, track performance, and ask the right questions that hold teams accountable.
If you’re preparing to raise or just want to get your model investor-ready, let’s talk. We’ll help you build a model that supports your raise and strengthens your business at the same time.
Also in this series:
This article is the final installment of a three article series. Also see:
- Part 1: Financial Modeling Basics
We explore the basics of a financial modeling, including important use cases, key inputs, and when to use top-down vs. bottom-up approaches. - Part 2: Modeling Growth
We look at how to forecast revenue, headcount, expenses, and margins in a way that supports scale.