What are the best budgeting practices for early-stage startups fundraising?

yes! agree Demonstrating financial responsibility and a strategic approach to resource management is key when fundraising for an early-stage startup.

The startup budget serves as a valuable tool for founders to gain a deeper understanding of the business model, pinpoint key growth drivers, and effectively allocate resources that directly contribute to expansion. In cases where historical data is lacking, it becomes essential to explore multiple scenarios. Subsequently, focus should be directed towards the scenario closest to reality, continually updating actual information. This involves adjusting forecasts based on accumulated data, and considering changes in plans, decisions, and external factors. The startup budget is a powerful management tool when seamlessly integrated with daily operational activities and consistently updated to reflect material decisions.

Based on my experience, I've observed that Excel or Google Sheets are optimal tools in the initial stages of budget development. As the business model becomes more comprehensible and the startup acquires richer data from practical experience, there's the potential to transition to more advanced software or platforms.

Seeking expert advice during the early phases of designing a startup budget can be beneficial. An experienced professional, in communication with the founder, will try to understand the business model, pinpoint key growth factors, and determine the resources required to attain the startup's objectives. Additionally, the expert will employ a professional budget structure for the effective budgeting of both revenue and costs.

An often overlooked point is the narrative. Numbers lie, and they are not intuitive. Especially in early stage, numbers don't mean much and its rare for somebody to get excited over a financial model. A great story on how you are going to attack the market, win over customers, and capture larger and larger segments of the opportunity is critical for investors and team members alike to understand the plan.