Angel investment discussions are clearer when a startup can reconcile its historical results and show how a realistic funding amount supports specific operational milestones.
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Start with evidence, not a pitch-deck revenue chartBuild a driver-based forecastExplain the use of fundsPrepare to answer dilution and runway questionsCreate an organised investor information folderFrequently asked questionsStart with evidence, not a pitch-deck revenue chart
Prepare recent financial statements or management accounts, bank reconciliations, current liabilities and a simple bridge from historical revenue to planned growth. If the business is pre-revenue, identify what has been tested, what is assumed and when a customer will pay.
Build a driver-based forecast
Rather than entering a single target for future sales, build revenue from customers multiplied by usage and price, then model direct costs and the timing of cash collection. Test hiring, product-development and marketing spend separately. Show the financial outcome if conversion is slower than expected.
Explain the use of funds
Connect each spending category to a milestone: product release, sales hires, geographic expansion or compliance readiness. Separate one-off costs from monthly commitments. Investors should understand both what the round enables and how long it is expected to last.
Practical output to request
Ask for a dated, editable file; named owners for each assumption; and a review meeting that identifies decisions rather than merely presenting charts.
Prepare to answer dilution and runway questions
Founders should understand the distinction between pre-money and post-money valuation and how an equity raise affects ownership. A CFO can model scenarios, while valuation negotiations and legal terms should be reviewed with appropriately qualified advisers. Cash runway depends on available cash and future net burn, not just the amount you plan to raise.
Create an organised investor information folder
Maintain one version-controlled financial model, a KPI definition sheet, supporting historical numbers and a questions log. Identify confidential information before sharing. Make the story consistent across the pitch deck, spreadsheet and data room.
Frequently asked questions
How many years of forecast should we prepare?
The appropriate period varies by business and investor. A 12–24 month operational model is often more useful for near-term decisions than an unsupported five-year growth curve.
Should financial projections show a downside case?
Yes. A base case and an understandable downside scenario show how management would adapt if hiring or sales assumptions change.