The use of financial models and projections in fundraising by pre-revenue companies and those in the early and optimistic stages of their business cycle is almost universal. Often, companies disclose assumptions underlying the models and projections. Many include warnings and disclaimers in fine print further advising the uncertainties behind the business and risk in relying too heavily on the models or projections. In these circumstances, the fundraisers feel secure in the disclosures accompanying the models or projections provided to investors.
Source: Financial Projections in Fundraising: How Early-Stage Companies Can Mitigate Risk at a Time of Heightened Enforcement