Here’s What Investors Will Ask About Your Startup’s Revenue Plan
It seems like a requirement that every startup’s investor pitch deck includes a slide that shows revenue increasing exponentially over time.
The classic definition of a “hockey stick” growth chart.
This slide is actually kind of a fallacy, almost a joke, because what usually happens is a longer-than-expected period of stagnant or even negative growth. Then leadership runs it all back — doing the same thing and expecting a different result.
The classic definition of insanity.
It’s not enough to show that idea + investment = growth
Obviously, a startup can’t just will its way to exponential revenue growth. You can’t wish your way to profitability. You can’t spend your way to scale.
But that magical hockey stick chart is the critical ingredient for return on every single investment in a startup. So it’s a Catch-22. Every investor will expect you to have developed a revenue growth plan that every investor will be maximum skeptical about.
These are the most damning questions I usually have to answer about my revenue plan. They’re the ones for which I do the most research and the ones for which I prepare the most well-constructed answers. They’re also the ones I ask first when I advise a startup, and they’re the ones that are usually met with the silence from the founding team.
Let’s attack that silence.
What happens when the bubble pops?
Why you’ll get this question: Every market is a fluid thing. Market shifts, or changes in the adoption of a type of product, are what fuel revenue. Market trends, the consolidation of those little shifts across a wider market, are catalysts for revenue growth. Market evolutions, or the ability to exploit inefficiencies and imbalances in those changing markets, can create massive business opportunities.
Here’s the problem: Market shifts, market trends, market evolutions, and market bubbles all look like the exact same thing at the…