When you are pitching your business to a venture capitalist, you will need to include financial statements in your pitch deck. These statements will show the potential investor how healthy your business is and how much money you expect to make in the future. There are five financial statements that you should always include in your pitch deck: the assumptions sheet, the balance sheet, income statement, cash flow statement, and the statement of shareholders' equity. In this blog post, we will explain what each of these statements means and how to create them.

Start by building out the assumptions sheet.

What is the assumptions sheet of a financial model?

An assumptions sheet is a document that outlines all of the assumptions that were made in creating a financial model. This sheet should include both numerical assumptions (such as sales growth rate) and qualitative assumptions (such as the assumption that the company will be able to obtain necessary permits). The assumptions sheet is important because it allows investors to see how sensitive the financial model is to different assumptions.

One common mistake is to assume that the company will always be able to raise money when it needs to. This is often not the case, especially for early-stage startups. Another common mistake is to assume that the company will be able to scale its operations quickly and efficiently. This is often not the case, as many startups struggle with growing pains. Finally, many startups assume that they will be able to achieve profitability quickly. This is often not the case, as it takes time to build a sustainable business model. When creating assumptions for your startup, be realistic and err on the side of caution. This will help you create a more accurate financial model.

What is the balance sheet?

The balance sheet is a financial statement that shows your assets, liabilities, and equity. This statement can be used to show how much your business is worth and how much debt you have.

It can be difficult to build a balance sheet for a startup because many startups do not have much in the way of assets. This is especially true for early-stage startups. In addition, many startups have a lot of debt because they have taken out loans or issued equity to raise capital.

One way to strengthen your balance sheet as a startup is to focus on revenue growth. If you can grow your revenues, you will eventually have more assets. Another way to strengthen your balance sheet is to focus on reducing expenses. This will help you increase your profits and eventually have more equity.

What is the income statement?

The income statement shows your revenue and expenses for a period of time. This statement can be used to show whether or not your business is profitable. The cash flow statement shows how much cash you have coming in and going out. This statement can be used to show your business's liquidity.

A quick note on SaaS revenue models:

The main difference between a SaaS revenue model and traditional revenue models is that with a SaaS revenue model, you are paid based on the number of users you have. Traditional revenue models are based on the number of products or services you sell. Some unique characteristics of a SaaS revenue model include recurring revenue, high customer lifetime value, and low customer acquisition costs.

What is the cash flow statement of a startup?

The cash flow statement of a startup is a financial statement that shows the cash inflows and outflows of the business. This statement can be used to show the business's liquidity.

What is a statement of shareholders' equity?

The statement of shareholders' equity shows the changes in your equity for a period of time. This statement can be used to show how much your business is worth to shareholders.

There are a number of software programs that can be used to track shareholders' equity. One popular option is QuickBooks. Another option is Microsoft Excel. However, we recommend our partner company Carta. Carta is a software program that offers a number of features for tracking and managing equity. Carta can be used to track the number of shares outstanding, the value of each share, and the total value of all shares. Carta can also be used to track the number of shares held by each shareholder. Carta's equity tracking features are available for both private and public companies. (BTW, if you want to get a discount on your Carta account, use this link!)

You can also include appendix notes to the financial statements to provide additional information about the financial statements.

Now that you know what to include in your pitch deck's financials, you can start creating your own projections. Remember to always use conservative estimates and to err on the side of caution when making assumptions. If you need help creating your financial projections, contact a professional accountant or business consultant.