The short answer
What financial information should a startup pitch include?
Explain how the company makes money, the evidence behind the market opportunity, the cash needed to reach its next milestone, and the financing you are seeking. Show the assumptions, a downside case and how investors could eventually receive a return. Tie the financial story to the customer problem and the team’s ability to execute.
Give the financials a job in the story
A pitch should connect the customer’s problem, your solution, evidence of demand, the business model, the team and the opportunity. Financial slides show whether that story can work economically. They cannot compensate for an unclear customer or an unsupported claim of demand.
| Investor question | Useful evidence |
|---|---|
| Who buys and why? | A specific customer, buying process and evidence from use, purchases or well-labeled research. |
| How large is the opportunity? | A defined customer population and pricing assumptions; distinguish the market from your sales forecast. |
| Can the economics work? | Revenue drivers, gross margin, acquisition costs and retention, with stage-appropriate uncertainty. |
| Why this amount of funding? | Cash uses, monthly forecast, cash buffer and milestones that the raise is intended to fund. |
| Why this financing? | An explanation of debt, SAFE, convertible note or priced equity and the consequences for ownership and obligations. |
| What happens if the plan is wrong? | A downside forecast, spending choices, warning signals and the next funding decision. |
References: Sequoia: writing a business plan
Build market size from assumptions you can explain
Distinguish TAM, the overall market under a defined scope; SAM, the portion your offer and reach can serve; and SOM, the share you can plausibly capture over a stated period. Definitions vary, so make your boundaries explicit.
Fictional example: 2,000 eligible accounts in an initial region × $6,000 annual revenue per account = a $12 million modeled annual serviceable opportunity. Winning 100 accounts would produce $600,000 of annual recurring revenue at that price, assuming all are active for the full period and the revenue is truly recurring. Reaching those accounts requires a sales and retention plan.
An industry report may help establish context. It does not prove your startup can win 1% of that market. Record the source date, account criteria, geographic scope, price and the evidence behind attainable penetration.
Show the cost of winning and serving a customer
Separate revenue from gross profit and cash collected. Label whether customer acquisition cost includes sales salaries, benefits, commissions, marketing and onboarding. Use a consistent cohort and period; do not compare today’s acquisition spend with unrelated historical customers.
Fictional steady-state example: monthly revenue per customer is $500, gross margin is 80%, and acquisition cost is $4,800. Monthly gross profit is $400, so simple gross-profit CAC payback is 12 months. That shortcut ignores churn, collection timing, discounting and overhead outside the gross-margin calculation. A real forecast needs those details.
Include a realistic hiring ramp and fully loaded compensation. If founders take no salary initially, say so, show when cash compensation begins, and distinguish cash expense from their opportunity cost. Free founder labor should not silently make the mature business look profitable.
Connect the raise to runway and milestones
Burn describes cash use over a period; state whether you mean gross spending or net cash outflow after receipts. Runway is how long available cash might last. The simple cash-divided-by-net-burn shortcut assumes burn is stable and does not predict lumpy hiring, annual payments or changes in collections.
Fictional example: opening cash is $150,000 and a planned raise brings in $900,000. After $50,000 of transaction and launch costs, $1 million remains. Keeping a $100,000 minimum cash buffer leaves $900,000 for planned net cash use. At $60,000 per month, the business reaches that buffer in 15 months. At $90,000 per month, it reaches it in 10 months. These figures exclude any additional funding.
Build a monthly forecast and tie spending to evidence: product delivery, validated demand, retention, margin or another milestone appropriate to the business. Plan the next funding decision before the cash buffer is reached. A financing round is not guaranteed just because the forecast needs it.
Explain the financing choice in plain language
These are general distinctions, not a substitute for reviewing actual legal terms with counsel.
- A valuation cap is part of a conversion formula, not automatically a current appraisal of the company.
- Compare financing structures against the company’s cash needs and risk, rather than assuming the same instrument fits every business.
- Model the capitalization table across financing rounds, including option pools and existing convertible instruments.
| Instrument | What to explain |
|---|---|
| Loan | Interest, scheduled payments or maturity, security or guarantees if any, and whether cash flow can support the obligation. |
| Convertible note | Debt that may convert into equity: interest, maturity, conversion triggers, discount or cap, and what happens if no qualifying round occurs. |
| SAFE | A contractual right to future equity under specified events. A standard YC SAFE is not a loan and has no interest or maturity date. Explain conversion, cap or discount, and potential dilution. |
| Priced equity | Shares issued at an agreed price, with defined economic and governance rights. Explain pre-money and post-money valuation, ownership and investor protections. |
References: Y Combinator: SAFE financing documents
Separate company success from investor return
Revenue growth and cash raised are not cash returned to an investor. Show a possible distribution or exit, ownership after dilution, the capital required to get there, and the rights that affect who receives proceeds.
Fictional simplified priced round: $1 million invested at a $4 million pre-money valuation creates a $5 million post-money valuation and 20% ownership, before any other changes. If later financing reduces that ownership to 15%, and a sale produces $20 million available to equity, a purely pro-rata distribution would be $3 million. That is 3.0× the original investment before investor taxes and fees, not $20 million of investor profit.
Actual proceeds may differ because of debt, preferences, participation rights, additional investment, expenses or other terms. The timing also matters: the same multiple over a longer holding period produces a lower annualized return. This is an illustration of mechanics, not a prediction of an exit.
Prepare for the questions that test your judgment
Keep the monthly forecast, source notes, comparable-company analysis, capitalization table and downside case in an appendix. Make it easy to reconcile a slide number to the model. State what is known, assumed and still untested.
- Why is this market reachable with this team and budget?
- What happens if sales take six months longer or a major customer leaves?
- Which expense can you delay without undermining the milestone?
- What would make you raise less, change the financing or stop?
- What exactly are you asking the investor to do next?
One-minute check
Can you explain the difference?
Put it into practice
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Common questions
A few useful clarifications
How much money should I ask for in a startup pitch?
Build a monthly cash forecast to the next meaningful milestone, include the cost of reaching it and a justified cushion, then subtract cash and reliable funding already available. Test a downside. The amount depends on the business; an arbitrary round size or runway target is not enough.
Is a SAFE a loan?
A standard Y Combinator SAFE is not a loan and has no interest or maturity date. It gives contractual rights under specified events, including future equity financing. Modified documents may differ, and dilution depends on the terms and later financing.
How do I calculate startup runway?
For a simple constant-burn estimate, divide usable cash by monthly net cash outflow. Deduct any minimum cash buffer before dividing. Use a monthly cash forecast when spending, receipts or financing change over time.
Does an investor earn the company’s revenue growth?
No. The investor’s return depends on the price paid, ownership, dilution, cash distributions, eventual exit proceeds and contractual rights. Company revenue is a business operating measure, not a payment to investors.
Sources & scope
Adapted from Devon Coombs’s teaching feedback across entrepreneurial finance and real estate at Santa Clara University. The advice is generalized; all companies, transactions and numerical examples here are fictional. No student work, identities, grades or private classroom records are published.
Reviewed October 9, 2026. Numerical cases are fictional teaching examples, not current market quotes or individual advice. Assumptions appear beside each calculation. Rules, program requirements and source material can change.
- Sequoia: writing a business planA primary investor perspective on the questions a fundraising story should answer.
- Y Combinator: SAFE financing documentsOfficial SAFE forms and user guide. Actual rights, conversion and dilution depend on the signed documents.
Keep going
Use what you learned.
Study Entrepreneurial Finance
Build the foundation in startup business models, forecasts, valuation and financing.
Model SAFE dilution
Change an investment or cap and see the simplified ownership implications.
Build a short-term cash forecast
Translate accounting results into dated receipts and payments.
Draft your decision brief
Write the ask, evidence, alternative, downside and next step in one place.