Online Real Estate Broker Startup (Redfin) Financial Model Template

Here's a generic, non real life version of the financial model that online property broker Redfin used to project costs over their 1st 2 years of start up operations.

The public release and coverage of this model template by Guy Kawasaki created quite a stir (in a positive way), as it shed light into how an actual internet startup approached its revenue and cost management from Day 1.

Here’s what you’ll find in the model:

- Earnings, capital expenses and cash balance summarized on a single page.
- Ratios of revenue and profits to employees and program expenses.
- Assumptions called out so investors can easily evaluate dependencies.
- Assumption-driven formulas, so changes to the assumptions propagate through financial statements.
- Unit economics isolated on a separate page: for Redfin, this is how much profit each real estate market can generate.
- Charts of headcount growth, cash balance, earnings segmentation, revenue segmentation.
- Hiring detail with headcount and salary sums for each department.

The model also contains a few Redfin-built, custom Excel functions:

- Counting the number of employees in a department, by counting the number of times a department value like “Engineering” appears in a column.
- Summing the salaries of employees in a department, by adding up salaries for each employee where the department value for that employee equals a value like “Engineering.”
- Calculating how a Redfin market grows in revenue-capacity to reach maturity, and then grows more slowly thereafter.
- Calculating the number of support personnel needed to accommodate demand, and when those support personnel start. This allows us to update the staffing projection automatically when we change demand assumptions.

To get the custom functions to accommodate changes in the assumptions, you will have to set Excel’s macro security to “Low” or "Medium" (Tools | Macro | Security | Low).