Monday, June 18, 2007

How Startups Forecast Revenue for VCs

One item that I've never really seen covered well in any of the entrepreneurship events that I've attended is forecasting revenue. Most folks seem to either over-simplify or over-complicate forecasting. Anyway, Will Price has a great explanation of how to forecast revenue for an enterprise sales business model. The key take away is that investors do not find top down forecasting credible. If you want to impress an investor, you need to think through how you build repeatable sales processes and that requires a bottoms up approach. But you don't need to pay a consultant to do this for you. A quick read of Mr. Price's explanation and a spreadsheet is really all you need.

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