We build a MarTech financial model in Excel for a startup scaling from $0 to $3.5 million ARR in its first three years. Free template included.
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We learn how to build a startup financial model for a marketing technology company. You can download the MarTech financial model template for free in the resources section.
MarTech companies are usually a type of SaaS startup – so they have very sticky customers and sky-high gross margins.
Examples of MarTech companies could include email / SMS platforms, affiliate marketing platforms, influencer marketplaces, landing page builders, link-building/SEO tools, and more – and they often focus on a single sector.
MarTech is one of my favorite sectors of the startup ecosystem because they are building into a massive end market. The market is huge for the following reasons:
► There are an incredible number of industries that still do not leverage digital marketing very well in the acquisition & retention of their customers.
► Businesses that get a positive ROI on marketing will spend a lot.
► Many of the giant paid ads platforms are prohibitively expensive, difficult to use, and don’t convert very well (especially post-iOS 14).
In this video, I build a financial model for a MarTech startup scaling from a single product to a platform of products over its first 3 years.
0:23 what is MarTech? And advice on scaling from a product to a platform.
1:59 overview of our MarTech startup financial model
4:34 forecasting pricing & cross-selling
8:22 customer acquisition, marketing assumptions, CAC, paid vs. organic conversions
19:06 churn & total active customers for all product lines
24:02 calculating total subscription revenue using pricing & active customers
26:20 explanation of ARR (annual recurring revenue) – what is included vs. not included
27:34 forecasting COGS for a subscription startup
34:22 calculating the gross margin for our martech startup (plus typical GM range for SaaS businesses)
35:25 modeling MarTech operating expenses (my easy payroll forecasting method)
44:48 calculating operating income, burn rate, and runway
By the end of this video, you will know how to build a financial model for marketing technology startups – I guarantee it!