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Breaking Down the Importance of Early-Stage Startup Revenue Projections

I’m a member of ffVC’s Acceleration Team focused on supporting our portfolio companies in financial budgeting and modeling. At our firm, we have a fundamental belief that companies should be run using a metric-based approach. Every quarter our investment team requests a series of pre-specified, idiosyncratic metrics from our portfolio companies. This could be as simple as Customer Acquisition Cost (CAC) and Life Time Value (LTV) or something more company-specific, like Ratio of Paid Users to Total Users. It sounds simple, but I find tracking core metrics particularly important.

In this post, I’ll use a broad, hypothetical example of making revenue projections for an early-stage enterprise SaaS company to demonstrate the value of an anticipatory, data-driven projection approach.

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