Creating a Compelling Financial Model

A financial model is essential when presenting your investment case to key stakeholders. Without a clear and compelling financial model, your pitch lacks the necessary detail to sway investors in your venture’s favor. Here are some tips to creating a compelling financial model that will help start successful conversations with potential investors.

Use Excel for Financial Models

Excel is a robust modeling tool that allows for a lot of flexibility and customization when building out your financial model. One of the key components of a Darby financial model is the ability to have dynamic inputs all contained on one page. Setting up your financial model to present complex data in a simplistic way that anyone can understand is one of the skills we pride ourselves on at Darby Finance.

In addition, Excel has some wonderful auditing tools that can also help you with error-checking. A little bit of research into the auditing tools available to you can save you a lot of time when it comes to error-checking, plus it provides you with a strong confidence that your model is error-free.

Use Formatting for Clarity

It’s always a good idea to put a professional polish on your financial model, but make sure you are using formatting tools to provide clarity as well as polish. Color-coding inputs, variables, and common themes throughout the model are great ways to provide both clarity and a bit of design flair. Using a formatting system to help tell your financial story through your model will go a long away to furthering conversations with key stakeholders and potential investors.

Use a Process to Implement Major Changes

One of the hardest lessons learned for any financial analyst is the habit of documenting your work. Creating a robust financial model is an intense process that usually spans a long amount of time to perfect. Making notes about how different elements of the model works will save you time – and a potential headache – later on in the process when your client asks for changes to the model.

With over 40 years of supporting Fortune 50 companies, we’ve learned how to create a model that is both customized to your venture or company, as well as dynamic enough to handle change, from the minuscule to the major. Darby Finance’s customized financial models excel at handling deal changes, in-flux contract terms, and tax laws.

 


About Darby Finance – A Leading Financial Consulting Firm

Darby Finance helps our clients make better financial decisions by transforming complex data into a compelling and easy-to-understand financial story. We work alongside our clients to develop customized financial models, valuations, and sophisticated investor presentations while utilizing more than 40 years of experience in energy, finance and investor relations.

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