Worse than useless
Fri, 02/18/2005 - 15:01 — jpark (not verified)
In creating projections for a VC, don't bother going out more than 5 years. We know that all the numbers you have are made up. They're guesses based on assumptions with no direct relation to any known fact. So when I saw a bplan today with projections going out to 2030, it seemed less than honest. When years 2015 - 2030 looked EXACTLY THE SAME, this seemed laughable. If all those values are equal, doesn't it stop being a "projection" and start being a "copy"?
The numbers are supposed you represent your best estimate, not an exercise in spreadsheets. That having been said; there was one group I worked with that managed to hit their numbers, over and over again. How? Experience. This team had worked together for 5 years earlier. They were experts in the field, and knew all the key players. They knew the sales growth plan, the headcount growth, and who would buy and when.
Make the numbers rational. If you need to make wild guesses, perhaps a few more calls are necessary.
The numbers are supposed you represent your best estimate, not an exercise in spreadsheets. That having been said; there was one group I worked with that managed to hit their numbers, over and over again. How? Experience. This team had worked together for 5 years earlier. They were experts in the field, and knew all the key players. They knew the sales growth plan, the headcount growth, and who would buy and when.
Make the numbers rational. If you need to make wild guesses, perhaps a few more calls are necessary.
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Jean-Luc Park
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