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Financial Projection, Utilisation of Funds, Unit Economics & Break Even Analysis

You have to calculate the burn rate as well as expansion plan and goals firstly - then you'll get the number you wanna shoot them.

A critical part of your ask should be underpinned by your market size analysis, that’s is the Total Addressable Market (TAM), Serviceable Available Market (SAM), and your Serviceable Obtainable Market (SOM). Look at how companies like PhonePe justify their valuations by aligning their asks with the market opportunity. Investors want to see that your number isn’t arbitrary; it’s linked to realistic market share projections and growth opportunities. Do the math, and make sure your ask is proportional to the size of the pie.

Some argue that you shouldn’t get lost in complex calculations. Instead, outline key milestones and assign costs to each. For instance, when Swiggy scaled, they focused on expanding delivery capacity and tech upgrades. Estimate the cost of reaching your next product version, market expansion, and customer acquisition. If your milestones total ₹50 lakhs in expenses over the next 6 months, that’s the number to present—with a bit of wiggle room for unforeseen expenses.

When an investor asks for a number, start by crunching your monthly burn rate and determining how long your current cash will last. Factor in future hires, marketing spend, and R&D. For example, a company like Razorpay has to forecast costs around scaling their payment infrastructure and compliance expenses. Investors expect a solid runway plan—if you’re burning ₹10 lakhs a month and want a 12-month runway, that’s ₹1.2 crores, plus a buffer. It’s not magic; it’s good financial planning.