Don't say your pro forma financials are "conservative." They are complete fabrications! And that's OK.
About SpringTime Ventures
SpringTime Ventures seeds high-growth startups in healthcare, fintech, logistics, and marketplace businesses. We look for founders with domain expertise, forging a path with a truly transformative technology. We only invest in software-based businesses in the USA. We bring a people-focused approach, work quickly, and reach conviction independently. Our initial check size is $400k to $600k. You can learn more about us and our approach.
About Rich Maloy
Rich's mission is to rebuild the American dream through entrepreneurship. He works with early stage startups transforming the world, giving all people the opportunity to grow, learn and earn. With prior careers in finance and sales, he's now focused on startups investing through SpringTime Ventures where he is a Managing Partner. He's a father of two young children and loves sci-fi, skiing, and video games.
Rich:
Today you on things you should never say while fundraising is the word... conservative. Your pro forma financial statements are not conservative. Your revenue projections are not conservative. They are complete fabrications! And that's okay. The point of your pro forma financials is not to accurately forecast how you're going to get to$10 million MRR by year three. The purpose is in the name. Pro forma is Latin for"for form". As in, something done for the sake of doing it. Whether or not I believe you are going to get to$10 million MRR by year three is kind of beside the point. The point is in the exercise of doing it. I want to see where you think that revenue is coming from, if your cost of sales is realistic, what's your staffing plan is, and more. Show how you get from Here to There, and let me better understand the drivers of growth. When you say your projections are conservative, it says two things to me. First, it reinforces the fact that you haven't been through this process before, because every first time founder says,"these are our conservative projections." Second, if they're your conservative projections, then why are you showing them to a growth investor? The lesson here is that you don't need to label them at all because you have already done so: they are pro forma. And they should reflect the growth that you can reasonably expect to achieve with this round of financing and how that gets you from Here to There, so you can level up on the treadmill.