Modeling backwards

I was just watching an amazing video by modeling expert Chris Reilly on how he maps out financial models before building them.And it made me realize something about how traditional Big-Co FP&A is totally different from building financial models for startupsAnd how Finance best practices - in general - should be different for startups than they are in big companies.It all comes down to this:It's backwards.In Chris's video,He starts his modeling map based on the Raw Data (your historical statements)Next, he goes straight to building a 3-statement model (P&L, BS, and CF)He then builds a forecasting layer between the two (he calls this a Sub Schedule)Next up, he makes a control panel, from which he can control the modelAnd finally, a summary view that can be sent around to leaders, investors, etc.All in all, a brilliant breakdown of how to build a model for an established business.... But…

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