Daniel Cohen, an Israeli-based VC, has a good post up on how to present summary financial information in a first meeting with a VC. I always find it comforting that good practices are the same all over the world when it comes to finance, investing, valuation and due diligence.
A few of Daniel's hints:
- You have to have a financial summary
- Round numbers off to a significant number of digits (for example, $55,834,671.54 could be presented as $55 million)
- Forget the graphs because VCs as a group are quantatative and don't need the training wheels of pictures; (hallelujah, hallelujah, hallelujah--maybe we could ban all graphs for ever given that most people pick the wrong chart type, don't label the axis, omit the unit of measurement, use ugly colors, etc.)
- Present a logical scenario and avoid the hockey stick forecast
The one point that I wish Daniel had made was that the financial summary should show the growth driver(s) in the business and perhaps their economics. For example, instead of showing just new or total sales people or revenue per sales person, perhaps show EBITDA contribution per sales person. For more on growth drivers, see this post.
And remember, forget the graphs!!