Real Growth Metrics
Fundraising Guide

How to Use Growth Projections to Plan Your Next Fundraise

Investors want to see realistic growth math, not hockey stick charts. Learn how to build fundraising models that actually make sense.

11 min readNovember 23, 2024

The Problem with Most Fundraising Models

Investors see hundreds of pitch decks every year. Most show the same unrealistic growth curves: linear acquisition, zero churn, infinite market demand. The problem? These models don't survive first contact with reality.

What Investors Actually See

Hockey stick growth curves
Assumed 0% churn rates
Perfect unit economics
No market saturation

What Really Happens

Slower-than-expected growth
Unexpected churn spikes
Rising customer acquisition costs
Market and competitive responses

The best fundraising models acknowledge these realities upfront. They show investors you've thought through the challenges and have a plan to overcome them.

Building Realistic Growth Projections

Start with your current business metrics and build forward. Use conservative assumptions that you can defend with data.

Interactive Growth Model

Model your business growth for fundraising. Start with your current metrics and project forward. Adjust the assumptions to see how they affect your growth trajectory.

Month 12
Members: 270
Revenue: $20,250/month
Month 24
Members: 420
Revenue: $31,500/month
Month 36
Members: 570
Revenue: $42,750/month

Key Insight: At these growth rates, you'll have 570 members and $42,750/month revenue in 3 years. This is realistic growth that investors can believe in.

The Metrics Investors Actually Care About

Unit Economics

Customer Acquisition Cost (CAC)
How much you spend to get a customer
Customer Lifetime Value (LTV)
How much revenue you get from a customer
LTV:CAC Ratio
Should be 3:1 or higher for sustainable growth

Growth Metrics

Monthly Recurring Revenue (MRR)
Predictable revenue you can count on
Net Revenue Retention
Revenue growth from existing customers
Payback Period
How long until customers become profitable

Turning Data into Compelling Narratives

Investors don't just want numbers-they want stories. Here's how to weave your growth projections into a compelling fundraising narrative.

The Fundraising Story Framework

1

Establish Credibility

Show what you've achieved so far. "We've grown from 0 to 150 paying customers with $11,250 MRR and 4% churn."

2

Show the Opportunity

Connect your current metrics to market size. "Our target market is $2B, and we're capturing 0.006%. With proven unit economics, we can scale to 1% market share."

3

Present Realistic Projections

Use conservative scenarios. "Conservatively, we'll reach 570 customers and $42,750 MRR in 3 years. Aggressively, we could hit 800 customers."

4

Address the Risks

Show you've thought through challenges. "If churn rises to 6%, we'd still reach 450 customers. Our plan B includes [contingency strategies]."

Common Fundraising Model Mistakes

Overly Optimistic Assumptions

Assuming viral growth, 0% churn, or unlimited market demand makes investors question your judgment.

Fix: Use historical data and industry benchmarks. Show conservative, base, and aggressive scenarios.

Ignoring Churn

Many models show linear growth without accounting for customer loss. This creates unrealistic expectations.

Fix: Include churn in all projections. Show net growth (new - churn), not just gross additions.

Not Modeling CAC Increases

Customer acquisition costs rise as you scale. Assuming constant CAC leads to unrealistic profitability projections.

Fix: Model CAC increases over time. Show how unit economics change at different growth stages.

No Sensitivity Analysis

Single-point projections don't show what happens if assumptions change. Investors want to see ranges.

Fix: Show best case, base case, and worst case scenarios with clear assumptions for each.

Preparing for Investor Questions

Questions You'll Definitely Get

"What's your churn rate?"

Investors know high churn kills growth. Be ready to explain your current rate and reduction plan.

Good answer: "We're at 4% monthly churn. Our plan reduces this to 3% through better onboarding and customer success. Here's the impact on growth..."

"How much does it cost to acquire a customer?"

CAC is the second most important metric after revenue. Show how it changes as you scale.

Good answer: "Currently $120 CAC with 3:1 LTV:CAC ratio. As we scale to 1,000 customers, we expect CAC to rise to $180 but maintain 2:1 ratio."

"What's your payback period?"

Investors want to know how long until customers become profitable.

Good answer: "4 months currently. We're working to reduce this to 3 months through higher margins and more efficient acquisition."

"What happens if growth slows?"

Show you've thought through downside scenarios. This builds credibility.

Good answer: "If growth slows 50%, we'd still be cash flow positive at 300 customers. Our unit economics work at much smaller scale."

Build Your Fundraising Model

Use our growth simulator to create realistic projections that investors will believe in. Model different scenarios and understand the impact of your key assumptions.

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