Picture this: you sit down with a VC in Dubai. They open your spreadsheet and jump to three things: cash runway, unit economics, and tax settings. In five minutes, they can tell if your plan holds up. Investor ready financial models help you clear this first screen and move to term‑sheet talks. If the model is messy, with top‑down guesses and no cash link, the meeting ends fast.
I build and review models for UAE startups. In this guide you will get a simple plan to make investor ready financial models that match how your business works. We use clear drivers, we handle UAE VAT (5%) and Corporate Tax (9%), we connect the P&L, cash, and balance sheet, and we add scenarios that fit 2025 funding. You will get step‑by‑step checklists, copy‑ready tables, and actions you can do today. The goal: a model that tells a clean story, stands up to questions, and helps you raise.
What Investors Check Before They Say Yes
Why it matters
- Most investors do a fast scan first. If basics fail, they pass.
- A good model shows control. It shows you know how money moves through your business.
The 3R test for investor ready financial models
- Reality: Are inputs real? Can you tie them to data (CRM, billing, payroll)?
- Rigor: Do sheets link cleanly? Do totals foot? Any circular refs?
- Reconciliation: Do P&L, cash flow, and balance sheet tie each month?
The 5‑minute scan many investors do
P&L sanity
- Revenue drivers: prices, volumes, churn, usage.
- Cost lines: headcount plan, cloud, marketing, rent, licenses.
- Taxes: UAE VAT not in revenue; Corporate Tax at 9% on profits (with free zone rules if they apply).
Cash and runway
- Cash in bank today and burn per month.
- Months of runway at current plan.
- Hiring plan vs. cash runway.
Scenarios
- Base, Down, Upside sheets.
- Clear switches for ad spend, hiring, pricing.
Local fit
- VAT 5% handled in invoices, not in revenue lines.
- Corporate Tax (CT) from your first CT year. Free zone “QFZP” logic if relevant.
- WPS payroll timing and gratuity accrual.
24‑hour actions
- Add a monthly cash roll‑forward: starting cash + inflows − outflows = ending cash (must equal the balance sheet).
- Add a “drivers” sheet with all inputs in one place.
- Turn on a simple three‑scenario switch (Base/Down/Upside).
Build the revenue engine the right way
Why it matters
- Top‑down guesses (“we will get 1% of the market”) fail fast.
- Bottom‑up logic wins trust and lets you adjust live in the meeting.
Steps to build revenue drivers
Step 1: Start with units
- SaaS: leads → trials → paid → upgrades; seats or usage.
- Marketplace: buyers, sellers, take rate, order value.
- Services: hours, rates, utilization.
Step 2: Set prices and discount rules
- Use your price book. Add promo limits (how long, max %).
- For B2B, show annual vs. monthly mix.
Step 3: Add churn and expansion
- Track logo churn (% of customers leaving) and net revenue retention (upsell minus churn).
- Use current data, then improve over time.
Step 4: Link to IFRS 15 timing
- “Over time” items (subscriptions) recognize monthly.
- One‑time setup: recognize when delivered if it is distinct. If not, spread over the term.
- Keep a simple “revenue memo” tab for big deals.
Step 5: Handle VAT correctly
- VAT (5%) is not revenue. Model it in cash collections and VAT payable/receivable.
- Use UAE Central Bank rate if you invoice in foreign currency.
Step 6: Add collections timing
- B2C card: same month or next month, net of fees.
- B2B invoice: add days sales outstanding (DSO). Model late pay risk.
24‑hour actions
- Replace any top‑down revenue row with a driver tree (units × price × churn).
- Add a VAT 5% line to cash collected and a VAT payable balance.
- Create a one‑page “revenue memo” template for your top three deals.
Table Revenue drivers you can copy
Costs, cash, and runway that match UAE reality
Why it matters
- Investors want to see “cash truth.” Costs drive burn. Burn drives runway.
- UAE‑specific rules shape cash timing (WPS) and end‑of‑service costs.
Build the cost side
Step 1: Headcount plan
- List each role, start month, base pay, allowances.
- Add employer costs: visas, health insurance, free zone fees if any.
- Model payroll through WPS date. Keep a simple gratuity accrual (based on basic pay and service).
Step 2: Operating costs
- Cloud and software by team.
- Marketing by channel with CAC (cost to acquire a customer).
- Rent, utilities, travel, license renewals.
Step 3: Taxes and duties
- VAT: input VAT on costs set against VAT you collect; refund or carry forward if excess.
- Corporate Tax: 9% on taxable profit (from your first CT financial year). If in a free zone, add a QFZP toggle and split “qualifying” vs. “non‑qualifying” income.
- Withholding tax: usually not in the UAE, but model it if you pay abroad where it applies.
Step 4: Debt and interest
- If you plan venture debt, use the Central Bank of the UAE base rate plus your margin to estimate interest.
- Add covenants checks if lenders require them.
Step 5: Cash roll and runway
- Add cash collections (after card fees), minus payments (vendors, payroll, rent, tax).
- Show months of runway at each scenario.
- Add a “Runway alert” that flips to red when <9 months.
Unit economics that investors ask for
- CAC: total marketing + sales cost / new customers in the period.
- Gross margin: (Revenue − direct costs) / Revenue.
- Payback: months to recover CAC from gross profit.
- LTV: gross profit per customer over life (keep this simple and honest).
24‑hour actions
- Add a WPS pay date and a gratuity accrual line to payroll.
- Add a CT 9% toggle and a free zone QFZP toggle.
- Add a row for card fees and a lag for invoice collections.
Table UAE tax and payroll settings to switch on
Scenarios, sensitivities, and milestones that earn trust
Why it matters
- 2025 investors want to see you can adapt. They test downside first.
- A clean scenario setup shows control.
Build three clear scenarios
Base case
- Today’s conversion, pricing, and churn.
- Hiring that matches realistic growth.
Down case
- 25–40% less new business, slower collections, flat pricing.
- Hiring freeze or delays. Lower ad spend.
Upside case
- Faster conversion or a new channel, but with higher costs to support it.
Sensitivity switches to add
- Price ±10%
- CAC ±20%
- Churn ±2–3 points
- Hiring delays (shift start dates by 1–2 quarters)
Milestone to money map
- Write key milestones by quarter (for example: “$1m ARR,” “Launch KSA,” “Reach payback <12 months”).
- Link each to a cost and a date.
- Show how the round funds those milestones and extends runway 18–24 months.
24‑hour actions
- Add a one‑cell switch for price, CAC, churn, and hiring.
- Create a scenario summary page: revenue, burn, runway, CT, and key ratios for each case.
- Add a “trigger plan”: what you will change if a trigger hits (for example: CAC rises 20%).
Table Scenario switchboard you can copy
Model hygiene and a UAE‑ready data room
Why it matters
- A clean model and tidy folder cut weeks off diligence.
- It also helps your team run the business.
Make your investor ready financial models pass the scorecard
- Use one input sheet, one calc area, one output sheet per topic.
- Lock formulas in key ranges and use data validation.
- Name ranges for top drivers (price, churn, CAC).
Your finance data room structure
- Corporate: license, charter, cap table, board minutes, UBO file.
- Tax: TRN, VAT returns, Corporate Tax registration, CT calc.
- Revenue: price book, top 20 contracts, revenue memos, schedules.
- Cash and AP: bank statements, vendor list, WPS files, sanctions logs.
- Model: current model (xlsx), PDF outputs (Base/Down/Upside), model guide (one page).
24‑hour actions
- Add a “Read me” tab to the model with version, owner, last update, and how to use it.
- Create the five data room folders and drop in what you have now.
- Run a quick self‑audit with the scorecard below.
Table Model readiness scorecard (12 checks)
Action plan you can do in 24 hours
- Add a Drivers tab and move all inputs there.
- Build a cash roll‑forward that ties to the balance sheet.
- Replace top‑down revenue with units × price × churn.
- Add VAT and Corporate Tax tabs and link them to P&L and cash.
- Create Base/Down/Upside with one‑cell switches.
- Set up the five data room folders and add a one‑page model guide.
Frequently Asked Questions
1. What makes a model “investor ready”?
It passes a fast scan. Drivers are clear. The three statements tie each month. VAT and Corporate Tax are handled. Scenarios show how you adapt. There is a one‑page guide that explains how to read the file.
2. How detailed should my model be for seed vs. Series A?
Seed: keep it simple. Focus on revenue drivers, cash, and 12–18 months of runway. Series A: add unit economics by channel, hiring by team, a full cash roll, and three scenarios. In both cases, link to real data where you can.
3. Should I model VAT and Corporate Tax in the UAE?
Yes. Keep VAT out of revenue and show VAT payable/receivable. Add Corporate Tax at 9% from your first CT year. If you are a free zone company, add a toggle for “Qualifying Free Zone Person.” Investors will ask.
4. How do I pick the right growth rate?
Start from your funnel data. Use recent conversion, churn, and pricing. Show what changes if you improve one driver at a time. Avoid big jumps without proof (like a new channel test or a signed partnership).
5. What KPIs do investors focus on?
Runway months, burn, gross margin, CAC, payback period, net revenue retention, and collections lag. Define each KPI in the file. Show them for Base, Down, and Upside.
6. Do I need a complex model tool?
No. Excel or Google Sheets works. Keep inputs in one place, protect formulas, and name your ranges. Move to a tool later if the team needs it.
7. How often should I update the model?
Monthly is a good rhythm. Update actuals, compare to plan, and note changes. If you are raising now, update weekly until the round closes.
8. What breaks trust fast in a model review?
Top‑down guesses, no cash link, VAT included in revenue, no Corporate Tax, and scenarios that are copy‑paste with different titles. Fix these before any investor meeting.
References
Government and regulators (UAE and international)
- UAE Federal Tax Authority (FTA) VAT Law, TRN verification, invoice rules, and VAT guidance (updated 2024–2025) tax.gov.ae
- UAE Ministry of Finance (MoF) Corporate Tax Law (Federal Decree‑Law No. 47 of 2022) and decisions incl. Small Business Relief and QFZP (2023–2025) mof.gov.ae
- FTA Corporate Tax registration timelines and portal user guides (2024–2025) tax.gov.ae
- MOHRE Wage Protection System (WPS) and UAE Labour Law guidance (updated 2024) mohre.gov.ae
- Central Bank of the UAE Base rate and monetary policy updates (2024–2025) cbuae.gov.ae
- IFRS Foundation IFRS 15 Revenue from Contracts with Customers (current) ifrs.org
