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COPYRIGHT 2007-2009 VENTUREARCHETYPES, LLCNathan@venturearchetypes.comwww.venturearchetypes.com415-370-5060
 
We build great startups.™
Financial Modeling for Startups
Plug & Play Tech CenterVentureArchetypes, LLC
September 24, 2008
 
COPYRIGHT 2007-2009 VENTUREARCHETYPES, LLCNathan@venturearchetypes.comwww.venturearchetypes.com415-370-5060
 
We build great startups.™
Why bother?
A good financial model is an
operating plan
and
roadmap
foryour business…sales targets, hiring plan, marketing, etc.A financial model is a
framework
for thinking through keyassumptions regarding growth rates, pricing, costs, etc.A good financial model is a mark of 
credibility
and can help
convince investors
of the overall potential of your
opportunity
A well thought out financial model gives youan idea of 
how much money
you need to
raise
and
when,
as well as overall
ROI.
 
COPYRIGHT 2007-2009 VENTUREARCHETYPES, LLCNathan@venturearchetypes.comwww.venturearchetypes.com415-370-5060
 
We build great startups.™
…But don’t take my word for it.
“I look at financials because they are a credibility test for theentrepreneur …A good entrepreneur understands both thetechnical and business opportunities and how to flesh out thenumbers behind it”-
RusselSiegelman, KleinerPerkins Caufiled& Byers 
“I look at financials to see if they make sense. I actually look atthem more for mistakes. If someone thinks they will have 40%after-tax margin after 5 years, they clearly do not understand thecost of running a business”-
Sonja Hoel, Managing Director, Menlo Ventures 
“The financial model discussion is more often a good insight intohow smart a team is.”-
Fred Wang, Trinity Ventures 
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