The 5-part investor financial model
People mean two different things by a "five-part" model. Here are both, and the five parts investors actually want: assumptions, revenue, costs, the three statements and funding.
7 November 2026 · 6 min read
You will hear founders and investors talk about a "five-statement" or "five-part" financial model. The phrase is used in two different ways. This guide explains both, and sets out the five parts an investor-ready startup model should have.
Meaning 1: the five financial statements
In accounting, a complete set of financial statements under IFRS (IAS 1) has five components. UK FRS 102 accounts follow a similar pattern:
- Statement of financial position: the balance sheet.
- Statement of profit or loss and other comprehensive income: the income statement.
- Statement of changes in equity: how share capital, reserves and retained earnings moved.
- Statement of cash flows.
- Notes: accounting policies and the detail behind the numbers.
Those are statutory accounts that look backwards. A forecast model for investors uses the first, second and fourth as its core: the three-statement model.
Meaning 2: the five parts of an investor model
When an investor asks for a "full model", they usually mean something with five connected parts. The three statements sit in the middle, fed by assumptions and feeding the funding story:
- Part 1AssumptionsPrices, rates, terms, tax
- Part 2Revenue buildCustomers × price, by month
- Part 3Costs and headcountHiring plan, overheads, capex
- Part 4Three statementsP&L, cash flow, balance sheet
- Part 5Funding and runwayRaise, use of funds, cap table
1. Assumptions and drivers
Every number in the model should trace back to a labelled assumption: prices, conversion rates, churn, salaries, payment terms, tax rates. Investors change these to test your plan, so keep them in one place and never hard-code them inside formulas.
2. Revenue build
Build revenue bottom-up: customers or units × price, by product and channel, month by month. Top-down claims like "1% of a £10bn market" don't convince investors on their own. Use market size as a sense check, not as the forecast (Pear VC, market sizing guide).
3. Costs and headcount
Cost of sales, a hiring plan by role and start month (with employer taxes and pension), overheads by category, and capital spend. Headcount is usually the largest cost, and investors check that hiring keeps pace with growth.
4. The three statements
Income statement, cash flow and balance sheet, monthly, linked so that the balance sheet balances and cash ties every month.
5. Funding, runway and returns
How much you are raising, when the money arrives, what it is spent on, how many months of runway it buys, and what it gets you to. Include the cap table and dilution if you are modelling several rounds. This is the page investors turn to first.
Plus: the KPI summary
Most investor models open with a one-page summary: revenue, gross margin, EBITDA, burn, runway and the key unit economics (CAC, lifetime value, payback). Investors use it to decide whether to read the rest.
How Caiflo covers the five parts
The Caiflo builder goes through the parts in order. You start with the assumptions, and revenue, costs and headcount are worked out from them. The three statements follow, month by month, and the funding summary shows your runway and where the money goes. The readiness score then tells you which part needs more work.