Revenue Projection Model

PROJECTION PHILOSOPHY

Revenue Projection Fundamentals

REVENUE PROJECTION PHILOSOPHY

WHY REVENUE PROJECTIONS MATTER:
☐ Investors evaluate your understanding of growth
☐ Projections show business maturity
☐ Demonstrates strategic thinking
☐ Foundation for valuation discussions
☐ Guides resource allocation
☐ Creates team accountability

PROJECTION PRINCIPLES:

1. BOTTOMS-UP IS KING
   ☐ Build from unit economics
   ☐ Based on real capacity
   ☐ Grounded in current data
   ☐ Defendable assumptions

2. TOP-DOWN VALIDATES
   ☐ Market size check
   ☐ Comparable benchmarks
   ☐ Reality check on growth
   ☐ Identify disconnects

3. ASSUMPTIONS DRIVE CREDIBILITY
   ☐ Every number has a source
   ☐ Document your reasoning
   ☐ Be prepared to defend
   ☐ Update with actuals

4. RANGES > POINT ESTIMATES
   ☐ Show confidence intervals
   ☐ Scenario analysis
   ☐ Sensitivity modeling
   ☐ Acknowledge uncertainty

PROJECTION TIME HORIZONS:
| Horizon | Accuracy | Detail Level | Purpose |
|---------|----------|--------------|---------|
| 3 months | High | Monthly | Operations |
| 6 months | Medium | Monthly | Planning |
| 12 months | Medium | Quarterly | Budgeting |
| 24 months | Low | Quarterly | Strategy |
| 36+ months | Directional | Annual | Vision |

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COMPREHENSIVE PROJECTION MODEL

Bottoms-Up Revenue Build

BOTTOMS-UP REVENUE MODEL

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SALES CAPACITY MODEL
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CURRENT SALES TEAM:
| Role | Count | Avg Quota | Attainment | Expected |
|------|-------|-----------|------------|----------|
| AE - SMB | | $___K | ___% | $___K |
| AE - MM | | $___K | ___% | $___K |
| AE - Ent | | $___K | ___% | $___K |
| Total | | | | $___K |

HIRING PLAN:
| Month | Hire | Role | Ramp Month | Full Prod |
|-------|------|------|------------|-----------|
| M1 | | | | M___ |
| M2 | | | | M___ |
| M3 | | | | M___ |
| M4 | | | | M___ |
| M5 | | | | M___ |
| M6 | | | | M___ |

RAMP MODEL:
Month 1 of ramp: ___% of quota
Month 2 of ramp: ___% of quota
Month 3 of ramp: ___% of quota
Month 4 of ramp: ___% of quota
Month 5 of ramp: ___% of quota (full productivity)

PRODUCTIVE CAPACITY BY MONTH:
| Month | Tenured | Ramping | Total Capacity | Expected Bookings |
|-------|---------|---------|----------------|-------------------|
| M1 | | | $___K | $___K |
| M2 | | | $___K | $___K |
| M3 | | | $___K | $___K |
| M4 | | | $___K | $___K |
| M5 | | | $___K | $___K |
| M6 | | | $___K | $___K |
| M7 | | | $___K | $___K |
| M8 | | | $___K | $___K |
| M9 | | | $___K | $___K |
| M10 | | | $___K | $___K |
| M11 | | | $___K | $___K |
| M12 | | | $___K | $___K |

═══════════════════════════════════════
MARKETING CONTRIBUTION MODEL
═══════════════════════════════════════

FUNNEL METRICS (Current):
Monthly visitors: _____
Visitor to MQL: ____%
Monthly MQLs: _____
MQL to SQL: ____%
Monthly SQLs: _____
SQL to Opp: ____%
Monthly Opportunities: _____
Opp to Close: ____%
Monthly New Customers: _____
Average ACV: $_____
Monthly Marketing-Sourced ARR: $_____

FUNNEL IMPROVEMENT PLAN:
| Metric | Current | M3 Target | M6 Target | M12 Target |
|--------|---------|-----------|-----------|------------|
| Visitors | | | | |
| MQL Conv | | | | |
| SQL Conv | | | | |
| Close Rate | | | | |
| ACV | | | | |

MARKETING-SOURCED REVENUE:
| Month | MQLs | Conv Rate | Deals | ACV | ARR |
|-------|------|-----------|-------|-----|-----|
| M1 | | | | | $___K |
| M2 | | | | | $___K |
| M3 | | | | | $___K |
| M4 | | | | | $___K |
| M5 | | | | | $___K |
| M6 | | | | | $___K |
| M7 | | | | | $___K |
| M8 | | | | | $___K |
| M9 | | | | | $___K |
| M10 | | | | | $___K |
| M11 | | | | | $___K |
| M12 | | | | | $___K |

═══════════════════════════════════════
EXPANSION REVENUE MODEL
═══════════════════════════════════════

EXPANSION DRIVERS:
☐ Seat expansion: ___% of base monthly
☐ Upsell to higher tier: ___% of eligible
☐ Add-on products: ___% adoption rate
☐ Usage overage: ___% over commit

EXPANSION BY COHORT:
| Cohort Age | Monthly Expansion Rate |
|------------|------------------------|
| 0-3 months | ___% |
| 3-6 months | ___% |
| 6-12 months | ___% |
| 12+ months | ___% |

EXPANSION PROJECTION:
| Month | Base ARR | Exp Rate | Expansion ARR |
|-------|----------|----------|---------------|
| M1 | $___K | ___% | $___K |
| M2 | $___K | ___% | $___K |
| M3 | $___K | ___% | $___K |
| ... | | | |
| M12 | $___K | ___% | $___K |

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CHURN MODEL
═══════════════════════════════════════

CHURN DRIVERS:
☐ Logo churn rate: ___% monthly
☐ Contraction rate: ___% monthly
☐ Gross churn: ___% monthly

CHURN BY SEGMENT:
| Segment | Logo Churn | $ Churn | Contraction |
|---------|------------|---------|-------------|
| SMB | ___% | ___% | ___% |
| Mid-market | ___% | ___% | ___% |
| Enterprise | ___% | ___% | ___% |
| Blended | ___% | ___% | ___% |

CHURN PROJECTION:
| Month | Beginning ARR | Churn Rate | $ Churned |
|-------|---------------|------------|-----------|
| M1 | $___K | ___% | $___K |
| M2 | $___K | ___% | $___K |
| M3 | $___K | ___% | $___K |
| ... | | | |
| M12 | $___K | ___% | $___K |

Complete ARR Build

COMPREHENSIVE MONTHLY ARR BUILD

| Month | Beg ARR | New ARR | Expansion | Churn | End ARR | MoM Δ |
|-------|---------|---------|-----------|-------|---------|-------|
| M1 | $___K | $___K | $___K | ($___K) | $___K | ___% |
| M2 | $___K | $___K | $___K | ($___K) | $___K | ___% |
| M3 | $___K | $___K | $___K | ($___K) | $___K | ___% |
| M4 | $___K | $___K | $___K | ($___K) | $___K | ___% |
| M5 | $___K | $___K | $___K | ($___K) | $___K | ___% |
| M6 | $___K | $___K | $___K | ($___K) | $___K | ___% |
| M7 | $___K | $___K | $___K | ($___K) | $___K | ___% |
| M8 | $___K | $___K | $___K | ($___K) | $___K | ___% |
| M9 | $___K | $___K | $___K | ($___K) | $___K | ___% |
| M10 | $___K | $___K | $___K | ($___K) | $___K | ___% |
| M11 | $___K | $___K | $___K | ($___K) | $___K | ___% |
| M12 | $___K | $___K | $___K | ($___K) | $___K | ___% |

ANNUAL SUMMARY:
Year 1 Ending ARR: $_____
Year 1 Growth: ____%
Net New ARR: $_____
Net Revenue Retention: ____%

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TOP-DOWN VALIDATION

Market-Based Validation

TOP-DOWN REVENUE VALIDATION

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MARKET SIZING APPROACH
═══════════════════════════════════════

Total Addressable Market (TAM): $___B
Serviceable Addressable (SAM): $___M
Serviceable Obtainable (SOM): $___M

Current market share: ____%
Year 1 projected share: ____%
Year 3 projected share: ____%

Market growth rate: ____%/year
Your growth vs market: ___x

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COMPARABLE COMPANY BENCHMARKS
═══════════════════════════════════════

| Comparable | ARR at Stage | Growth Rate | Path Time |
|------------|--------------|-------------|-----------|
| Company A | $___M | ___% | ___ years |
| Company B | $___M | ___% | ___ years |
| Company C | $___M | ___% | ___ years |
| Average | $___M | ___% | ___ years |
| Your Plan | $___M | ___% | ___ years |

ARE YOU FASTER OR SLOWER? Why?
☐ Larger market
☐ Better product-market fit
☐ More capital
☐ Network effects
☐ Different go-to-market
Explanation: _______________________________

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RECONCILIATION
═══════════════════════════════════════

| Metric | Bottoms-Up | Top-Down | Variance |
|--------|------------|----------|----------|
| Year 1 ARR | $___M | $___M | ___% |
| New ARR | $___M | $___M | ___% |
| Growth Rate | ___% | ___% | ___pp |
| Market Share | ___% | ___% | ___pp |

VARIANCE EXPLANATION:
If bottoms-up > top-down:
☐ Are sales assumptions too aggressive?
☐ Is market sizing too conservative?
☐ What's the realistic middle?

If top-down > bottoms-up:
☐ Under-invested in sales capacity?
☐ Marketing underperforming potential?
☐ Pricing leaving money on table?

FINAL PROJECTION:
☐ Use bottoms-up (more conservative)
☐ Use top-down (market opportunity)
☐ Use blended (weighted average)
Final Year 1 ARR Target: $_____

Assumption Documentation

ASSUMPTION DOCUMENTATION

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SALES ASSUMPTIONS
═══════════════════════════════════════

PRODUCTIVITY ASSUMPTIONS:
☐ AE quota: $___K/year
  Source: _______________________________
☐ Quota attainment: ___%
  Source: _______________________________
☐ Ramp time: ___ months
  Source: _______________________________
☐ Rep turnover: ___% annual
  Source: _______________________________

HIRING ASSUMPTIONS:
☐ Hiring start date: _______
☐ Hires per month: _____
☐ Cost per hire: $_____
☐ Hiring success rate: ___%

═══════════════════════════════════════
MARKETING ASSUMPTIONS
═══════════════════════════════════════

CONVERSION ASSUMPTIONS:
☐ Lead to MQL: ___% | Source: _______
☐ MQL to SQL: ___% | Source: _______
☐ SQL to Opp: ___% | Source: _______
☐ Opp to Close: ___% | Source: _______

CHANNEL MIX:
☐ Inbound organic: ___% of pipeline
☐ Inbound paid: ___% of pipeline
☐ Outbound: ___% of pipeline
☐ Partner: ___% of pipeline

═══════════════════════════════════════
RETENTION ASSUMPTIONS
═══════════════════════════════════════

RETENTION METRICS:
☐ Gross retention: ___%
  Source: _______________________________
☐ Net retention: ___%
  Source: _______________________________
☐ Expansion rate: ___% of base
  Source: _______________________________

═══════════════════════════════════════
SENSITIVITY ANALYSIS
═══════════════════════════════════════

IF SALES ATTAINMENT -10%:
Year 1 ARR impact: -$___K (___%)

IF CHURN +1%:
Year 1 ARR impact: -$___K (___%)

IF CONVERSION -5%:
Year 1 ARR impact: -$___K (___%)

IF RAMP +1 MONTH:
Year 1 ARR impact: -$___K (___%)

WORST CASE (All negative):
Year 1 ARR: $___K
vs Base Case: -___%

Investor Presentation Format

Metric	Current	Y1 End	Y2 End	Y3 End
ARR	$___K	$___M	$___M	$___M
Growth	N/A	___%	___%	___%
Customers
NRR
Gross Margin

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