Startup Fundraising Sees a Growing Use of Dynamic Financial Models – Reported by eFinancialModels

In its latest report, eFinancialModels highlights that serious founders are able to successfully raise funding with the help of highly dynamic financial models.

In its latest reports, eFinancialModels reports that many founders are turning to dynamic financial models to help investors better understand business assumptions, revenue drivers, and potential financial outcomes under different scenarios. The surge in the popularity of dynamic financial models is in sync with the evolving processes of venture capital and angel investment. Founders are increasingly expected to provide greater financial transparency and flexibility during fundraising discussions, where they find dynamic financial models useful.

“Investors are not only evaluating a vision; they are evaluating how resilient a business model is under different conditions,” said Cyrill Haenni, Founder and Managing Partner of eFinancialModels. “A dynamic financial model supports more productive discussions by allowing assumptions to be examined and scenarios to be adjusted transparently.”

Unlike static spreadsheets or fixed projections, dynamic financial models allow assumptions to be adjusted and scenarios to be tested in real time. This approach enables investors to explore how changes in key variables, such as pricing, customer acquisition costs, or growth rates, affect financial performance and runway.

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Moving Beyond Static Projections
As due diligence expectations increase, many investors now expect founders to present multiple scenarios, often including base, upside, and downside cases. Dynamic financial models can support this process by enabling founders to:
– Illustrate operational sensitivity, showing how changes in costs or retention affect cash flow and runway
– Provide clearer financial traceability, allowing investors to follow how revenues and expenses are calculated
– Support real-time discussion, enabling adjustments during meetings rather than post-meeting revisions

Financial Modeling and Professional Readiness
Financial models are frequently viewed as an indicator of a team’s preparedness and understanding of its business mechanics. Structured and modular financial models can help founders present financial information in a format that aligns with the expectations of institutional investors and experienced angel groups.

“When investors can review assumptions and explore scenarios directly, it can streamline the evaluation process,” Haenni added. “The objective is to support clearer communication and reduce uncertainty during investment discussions.”

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