That modeling spark

Other advisors sometimes ask my why I focus on teaching financial modeling to founders.

Most other FracCFOs don't do this, and for good reason:

It's an uphill battle sometimes, because many founders just want to outsource it

FracCFOs make TONS of money building models for founders (minimum ~10k per model!)

Founders are less reliant on you when they know how to run their own model

Models built by founders often only make sense to founders and VCs; many finance folks will think they're too crude, messy, or just not how they would build it.

In other words, for many FracCFOs, it's a pain in the butt for a founder to build the model.

But here's why I can't resist:

Honestly, I'm addicted to watching a particular moment.

When a founder without a financial background builds their own model for the first time,

There's this moment.

I call it The Spark.

I see it most vividly in 1:1 modeling coaching sessions:

Folks come into the first meeting with this flustered feeling.

"I really don't like Excel."

"I've never been good at this."

"You can look at what I have so far but it's just a mess."

"I'm going to try this, but if I just can't figure it out, can you build it for me?"

Then we get started:

They input all the costs, they map out their best guesses on revenue,

And they get to the point where they can see that monthly view

Of what their business will be doing,

Will be spending,

Will be making,

Will be earning,

And, without fail, the entire vibe in the room changes.

I actually can see them light up.

Their face changes; they start smiling.

They start speaking faster, getting excited.

The way they talk about their business starts to change nearly instantly.

They immediately start sounding less like an early-stage founder, and more like a CEO.

On occasion, I initially sit down with a founder and think,

"I don't know man... I'm not sure if it's going to happen this time..."

But without fail,

It does.

I've been teaching this for 5 years now, and without fail,

As long as that founder has a business plan and a set of working ears,

We get to that Spark.

That realization, that evolution of understanding

Of how the activities you and your cofounders or employees take

Relate to the dollars and cents your business will make.

And as an advisor, it's hard to put a dollar value on being witness to that moment.

That transition from dreamy founder to real CEO.

And transformation that comes from - of all things - a stupid little model in Excel.

And once they feel that Spark,

They have it forever.



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