Startup funding strategies for 2025
With data, experience and insights gained from £2B+ raised on SeedLegals, we’ve curated these top three funding strategi...
For this post, we hand over to Hatty Fawcett, Founder of Focused For Business, to explain how to prepare a convincing financial forecast that will impress investors.
If you’ve joined one of the webinars we co-host regularly, you’ll already know Hatty for her practical advice on building a compelling case to secure funding.
For other aspects of getting investor-ready, such as sorting out your cap table or securing SEIS/EIS status, SeedLegals has you covered. We’re here to help with those, as well as the legal documents you need to take investment, whether you’re raising a funding round or taking one-off investment.
‘How much money should we ask for?’ It’s one of the most challenging questions startup founders face when raising equity investment. At the heart of the answer lies your financial forecast.
The financial forecast in your pitch isn’t just about impressing investors with your ambition. It sets out your strategy to grow, hit milestones and avoid running out of cash. In this guide, we’ll explore the essentials of financial forecasting and how to confidently calculate your funding ‘ask’.
A well-thought-out financial forecast is your strategic growth blueprint. It’s a tool to clarify your funding needs, avoid unnecessary dilution of equity and demonstrate to investors that you understand your business inside and out.
Too many founders approach their forecast as an academic exercise, but done right, your forecast becomes the backbone of your pitch. A detailed and realistic forecast not only builds investor confidence but also ensures you raise enough money to achieve your goals without overextending.
Raising the right amount of money means balancing enough funding to achieve growth milestones without excessive equity dilution.
Here’s how:
Start with where you are now. Include:
This establishes your baseline and builds investor trust.
Excite investors with your future potential. Highlight:
Projections must be based on data and sound assumptions. Wild guesses erode credibility.
Investors back plans, not guesses. Define clear, measurable milestones tied to funding needs. For example:
Consider your context:
Research industry norms for your stage and sector:
Deviating from the norm? Justify it with data and strategy.
While your forecast should provide a vision for long-term growth, it must also address immediate realities.
A well-crafted cash flow plan shows not only when funds might run low but also when you might need to raise again. Investors will scrutinise these details to ensure your request aligns with your business’s immediate needs and strategic vision.
A financial forecast isn’t just a numbers game; it’s a story about how you’ll grow value.
Each funding milestone you outline should translate directly into tangible outcomes, whether it’s developing your product, acquiring customers, or reaching revenue targets.
For instance, securing funding to launch an MVP de-risks your business by bringing your product to market, while hitting customer or revenue milestones increases your valuation ahead of the next round.
A solid financial forecast can be the difference between securing funding and struggling to convince investors. It’s your opportunity to show you have a clear, credible plan for growth, and that their money will be put to good use.
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