What is financial forecasting?
Financial forecasting is the process of estimating a company’s future financial outcomes — revenue, expenses, cash flow, capital needs — based on historical data, assumptions and pipeline visibility. Forecasts are central to business planning, fundraising and internal target-setting.
Startups typically maintain a 12–36 month financial model with monthly granularity. Investors use the forecast to evaluate trajectory, capital efficiency and milestones, while the company uses it for hiring plans, budget management and runway calculations.