Scenario analysis tests your financial model under different conditions: Best Case, Base Case, and Worst Case. It shows investors you've thought about risks and have contingency plans. Each scenario should change 3-5 key assumptions.
Key Takeaways
- Always present 3 scenarios: Best, Base, Worst.
- Change 3-5 key assumptions per scenario, not everything.
- Worst case should still show a viable path (or explain the pivot).
- Investors want to see you've stress-tested your model.