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But don’t quote me a damned IRR. I’ll judge your projections for realism and credibility, but that’s sales, costs, expenses, cash flow, and other basic numbers. I hate hearing about a $43 billion market, and even more so when you present a sales forecast validated by getting some percentage of that market.
In all these cases, capital is provided to fuel forecasted growth without creating a commitment to a particular vision for future funding rounds, exit goals, and associated blitzscaling. That said, nothing is cost-free. More complex cost of capital calculation. Transaction costs. Legal costs typically $5K-$50K .
If you look at the spreadsheet, you will see that the “Required Rate of Return” is expressed as an IRR. Internal Rates of Return naturally compound, so a 50% IRR is 7.59 (If you plug in an IRR of 58.5% Internal Rates of Return naturally compound, so a 50% IRR is 7.59 times at 5 years and 11.39
But don’t quote me a damned IRR. I’ll judge your projections for realism and credibility, but that’s sales, costs, expenses, cash flow, and other basic numbers. ” I hate hearing about a $43 billion market, and even more so when you present a sales forecast validated by getting some percentage of that market.
A detailed financial model that shows your anticipated revenue, costs and profits (Income Statement) as well as your balance sheet and cashflow statements. Investors love to be able to see what you told them in forecasts in prior years and then compare with how you actually performed.
If you want to learn about how to do simple forecasting and trend analysis, please see the official forecast function in Excel post on the Microsoft website, and this handy tutorial on trend lines and forecasting in excel. In an ideal world as you do the above exercise, you'll take into account: 1. And other such things.
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