Spent a good hour on a call with a VC’s CFO this morning and it was really helpful to think through all the ways I need to up my game to model our startup’s future.

We’ve worked on several iterations and the previous feedback had been that they were too complicated. But to get hung up on the word “complicated” misses the bigger picture of why analysts were struggling to make hide or hair of my workbook. Like many early-stage startups’ financial models, ours was built from the bottom-up, trying to work out what would need to be true about our business to make a top-line revenue number come together. To correctly interpret that model, I’m requiring some analyst to have a good understanding of the business to even get started. For most analysts at an early-stage startup, they’re more likely generalists and won’t know what the difference is between a gigawatt and a gigawatt-hour. I’m not doing my startup any favors by expecting them to know anything about the specific niche we operate in.

I need to get better at telling the story from the top – down, illustrating how we imagine the business to grow with global assumptions about the future of the world. From a top-down financial statements point of view, from the revenue projections and COGS, we can get to a view on income and metrics like profit margin. Get people grounded in the idea that marginal costs are so low that it doesn’t quite matter if we move quickly into three states vs. five. Then I can spend some time working down into the different deal structures based on the global assumptions we might make and illustrate the mechanics that underlie the main business model.

This is the job over the next few days.