Around 90% of startups ultimately fail within two years because they run out of money. It is critical that startups create a financial model when they are in their early stages so that they can properly allocate the funds they receive and use their money most effectively. Additionally, a financial model helps a new company plan out its team, recognize key hires, and maximize its manpower and skillset. Most importantly, a financial model allows a company to identify when it reaches key milestones and how it arrived there so that it can effectively plan to keep growing and reaching new milestones in the future. Without a financial model, early stage companies often aren’t equipped to understand where to properly allocate their resources, money, and team in order to maximize effectiveness and keep their company going and growing.