Scenario planning guide
A short guide to testing your plan against a better and a worse case, and finding the assumption your runway depends on most.
This guide is for any founder who needs to show investors or a board that they've stress-tested the plan.
For illustration only: any business or figures shown here are made up, and your own results will differ.
How to scenario-plan
- Start from a base case built on real drivers
- Change one assumption at a time
- Build an upside and a downside from specific changes
- Find the assumption that breaks the business
- Show what you'd give up in each case
What good looks like
- A one-line change summary, e.g. 'Cutting CAC 10% moves runway from 14 to 15 months' (illustrative: acquisition is about two-thirds of monthly burn, so burn falls about 6.7% and 14 months becomes 15)
- Scenarios that share one model
- A clear note on which assumption carries the most risk
- Scenarios you can explain line by line to an investor
Questions founders ask
What is scenario planning?
Comparing a base case with an upside and a downside by changing key assumptions, to see the trade-offs and what breaks the business.
How many scenarios do I need?
Usually three to four: a base, an upside, and one or two downside stress tests on the riskiest assumptions.
Why does it matter for a raise?
It shows you understand your own risks and can explain the plan when an investor pushes on it.
Build this on your own numbers
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