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 info@tencapital.group  

Please follow, share, and leave a review.

Music courtesy of Bensound.

On this episode of Investor Connect, Hall welcomes Hernan Haro, Founder and General Partner at MrPink VC.

MrPink is a VC seed fund that invests in founders located in Colombia, Peru, Chile, Argentina, and Uruguay, that address large regional or global challenges. MrPink empowers entrepreneurs in CAPUC (Chile, Argentina, Peru, Uruguay and Colombia), by providing the capital, hands-on support, advice, and connections needed to launch global businesses. 

VC investment in LATAM will exceed $10 billion this year, more than 2 times the levels of 2019, and more than 20 times 2016; Mexico and Brazil take three-quarters of the total pie. MrPink’s portfolio companies will benefit from their Venture Design & Growth playbook, leveraging their experience by building, investing, and refining over 40 startups, and producing 10x returns and multiple exits. 

Hernan is a tech entrepreneur and Founding Partner of MrPink. As an entrepreneur, he ran operations for Pulpo Media, a California-based startup, leading the company through 14X revenue growth and its successful exit to Entravision. At ConsumerAffairs, he built the Data and Analytics team from scratch, later running Finance and Growth at scale. During the last decade, he has been actively advising entrepreneurs and angel investing in the region. Hernan holds an MBA from UC Berkeley (2010), an MSc in Industrial Engineering from ITBA (2001), and a BS in Computer Science (1997) from ORT.

Hernan discusses the state of investing in Latin America, some of the challenges investors and startups face, and the biggest change he sees happening in the next 12-24 months.

You can visit MrPink VC at https://mrpink.vc/, via LinkedIn at www.linkedin.com/company/mrpink-vc/, and via Twitter at www.twitter.com/MrPink_VC/.

Hernan can be contacted via email at hh@mrpink.vc, and via LinkedIn at www.linkedin.com/in/hernanharo. 

_____________________________________________________________________

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 info@tencapital.group   

Please follow, share, and leave a review.

Music courtesy of Bensound.