Benchmarks for Early-Stage Financial Projections

Nov 2, 2022 · Data sources and approaches to benchmarking your metrics for private, early-stage companies.

Taylor Davidson

CEO / Founder

Benchmarking the assumptions and outputs of financial models is a difficult problem when modeling privately-held, growing companies where data can be sparse and hard to apply to your specific situation. Answering questions like "what should my gross margin be?", "how much should I spend on marketing?", "how much should I plan on revenues growing?" are difficult to answer without knowing the strategy (e.g. Saas or Ecommerce? growth or profit?), stage of development (e.g. pre- or post-market fit? Seed or Series B stage? $1mm in ARR or $20mm in ARR?), capital structure (e.g. venture-financed or bootstrapped?) and specific context behind the business.

Early-stage companies looking to benchmark their projections need to pay attention to those concerns, and use benchmark and comparable company data as directional signs, not absolute answers. Meaning, if a data source says that the average CAC payback period for a SaaS business is N, you have to contextualize that data point to your own situation, and understand whether your metrics should be different or not. You have to find the right comparison set for where you are and for where you want to go.

On the topic of using data in your assumptions, How to Create Assumptions

Finding benchmark data can be hard, so I'll try to share links to data points as I find them. Here's the beginning of a list of data sources and reports for early-stage companies. [1] [2]

For modeling venture funds, I typically refer people to:

Questions on assumptions or benchmarks for your specific situation, contact me anytime.

  1. Please contact me with links to more reports, I'd love to share more. ↩︎

  2. Thank you to Brian Weisberg for contributing a number of resources. ↩︎

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