I want to share with you an email I just sent to a young great friend of mine who is starting up a successful company and now in the process of making its financial projections (Revenues, Ebitda, Operating profits, Free cash Flow, etc.).



Anytime you are in doubt, please listen to this Steve Jobs famous speech: I heard it 20 times but I listen to it again anytime I need it.


I have no comments about your financials: its reality will depend on many things, including your personal engagement, your team passion and commitment, your rate of customer engagement and loyalty, market situation, global economy, competition innovation, luck, …

You will be only in charge and really responsible for your own effort and commitment: the rest will not depend only on you and professional investors know it very well.

In my opinion, financials are not the most relevant thing at the actual stage if your goal is to execute your idea and launch your dream to the market: make all business models you can think about and pivot them all with some real customer; after that, your business model will be more solid and your message stronger.

Professional investors want an idea about how big is your potential market, how engaged and diverse is your team, how much it will cost you to acquire a new customer and its Life Time Value, how you can protect your company when the big guns will enter your business (if they will not acquire you before), your burning rates, your traction timing (when you will start to create revenues and break-evening).

Talk about your risks and try to evaluate them.

I do not suggest you to evaluate your company on the base of a discounted free cash flow method, for nobody, neither you, knows it for sure (it is valid when you are generating positive cash flow in a long while).

Do not try to say «I will get 2% of the market» for it is very general: it is much better to say how much kind of customers you can get in the next 2/3 years. 5 years is very far away.


Stay hungry. Stay foolish.