5 Beginner Tips for Financial Modeling
Advice + an example from a spreadsheet wonk
My first job out of college was as an investment banking analyst at JP Morgan in New York where I was responsible for building financial models for large companies looking to raise new capital.
While I didn’t love everything about the job, I’m extremely grateful for the training I got working with spreadsheets and large amounts of data. That training helped me land a subsequent job as an investor with a private equity firm, and gave me increased confidence in raising capital for my own companies.
A spreadsheet is a tool that almost every businessperson relies on for forecasting revenue, expenses, and cash flow. And yet, most people, including many first-time entrepreneurs, product managers, and business owners, haven’t had any formal training in building forecast models. And, the templates provided by Google Sheets are a far cry from what an expert would create.
Perhaps AI will someday be able to make your financial model for you but 1) we’re not there yet, and 2) even then, if you really want to understand a business, making your own model — and understanding how different assumptions influence outcomes — will still be one of the best ways to do so.
