POST #3: FINANCIAL MODELING: FORECASTING REVENUE 101

Author: Deepak Kumar

At Envol Capital, we work with both mature companies and startups, whether seeking growth funding or an exit. No matter the size, we focus heavily on revenue forecasts during the preliminary phase. While forecasting revenue for mature companies can be complex, start-up forecasting often blends art with science.

We categorize revenue into three main streams—Recurring, Consumables, and Contract Revenue—and tailor our approach to each. Understanding these streams, COGS, and key growth drivers is crucial to building a reliable financial model.

Ultimately, the revenue forecast forms the cornerstone of the financial model. It informs the income statement, ensures compliance with GAAP, and reveals key insights that help avert long-term risks. At Envol, our goal is to create realistic projections that help clients scale and achieve financial success.