Startup Funding Espresso -- How to Build a Top-Down Financial Model

How to Build a Top-Down Financial Model Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. There are two approaches to building a financial model: top-down and bottoms-up. In general, you should use a bottoms-up approach for preparing the financial projections, which will be more detailed. To build a top-down financial model, consider the following: Start with the size of the market. Estimate the market share of the company in a sector or region. Use the price of the product to calculate the revenue. Increase the revenue based on the growth rate of the market and increasing market share. Input the expenses as a percentage of revenue based on historical data. The top-down approach is relatively simple as it uses market sizes and market share estimates. Use this approach to check against the bottoms-up model as a comparison. Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.Let's go startup something today. ___________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Investors check out: https://tencapital.group/investor-landing/ For Startups check out: https://tencapital.group/company-landing/ For eGuides check out: https://tencapital.group/education/ For upcoming Events, check out https://tencapital.group/events/ For Feedback please contact [email protected] Please follow, share, and leave a review. Music courtesy of Bensound.