# How Hemrock models are built

The principles, structure, and workflow behind every model. Read this once; it explains what you'll see across the product line.

## Principles

Every Hemrock model follows the same set of rules. Once you know them, every product is easier to read and edit.

- **Inputs, calculations, and presentation are separated.** Colors, sheet structure, and notes signal where to enter values and where not to.
- **Illustrative defaults.** Every assumption is a starting number. Change them to fit your business.
- **Flexible revenue logic.** Revenue structures handle a wide range of businesses. When they don't fit, delete the revenue section and [bring your own model](https://www.hemrock.com/byom). That's normal.
- **Accounting-agnostic.** Cash or accrual, GAAP, IFRS, or other standards — the math holds.
- **Templates are a starting point.** Expect to customize. Every cell is open.
- **Notes explain intent.** Formulas handle edge cases across many use cases. If you're building your own version, you may not need the same complexity.

## Structure and formatting

Models follow the [FAST Standard](https://www.hemrock.com/fast-standard) with small deviations for broader accessibility, and match the [principles of good financial models](https://www.hemrock.com/docs/best-practices).

- **Colors signal intent.** Blue for inputs, black for formulas. That's the core visual contract.
- **Sheet order is deliberate.** Presentation sheets (`Summary`, `Key Reports`) come first so readers get the big picture on open. Deeper detail follows: `Get Started`, `Forecast`, `Statements`.
- **Notes are a feature.** Row-by-row notes explain what each line does. Delete them when you share with stakeholders if you prefer — but notes are a signal of model quality.
- **Formatting is flat.** Minimal styling means you can layer your brand on without fighting the defaults. [Colors and formatting →](https://www.hemrock.com/docs/colors-and-formatting)

You don't need Excel expertise. Pay attention to formatting and notes. To brush up, see the [most common functions](https://www.hemrock.com/learn/excel-key-functions).

## Typical sheets

Most models share a similar backbone:

- **Informational** (`README`, `License`, `Disclaimer`, `Additional Tools`, `Model Comparison`, `Changelog`) — hide or delete without affecting the model. Keep `Changelog` hidden rather than deleted so you can compare versions later.
- **`Get Started`** — model-level inputs that drive everything else.
- **`Forecast`** — detailed assumptions and calculations. Intentionally a hybrid input/calculation sheet so you can make targeted changes over time.
- **Presentation** (`Summary`, `Key Reports`, `Statements`) — pre-built outputs for sharing and reviewing.

Product-specific setup guidance lives on each product's dashboard page after you log in.

## Modularity

The [Standard Financial Model](https://www.hemrock.com/standard-financial-model) separates into two components:

1. Growth and revenue (`Revenues` + related inputs on `Get Started`)
2. Financial reporting (everything else — expenses, hiring, statements, cap table)

Setting up revenue for your business is usually the hardest part. See [Revenues](https://www.hemrock.com/docs/revenues). If the prebuilt revenue structure doesn't fit, delete it and [bring your own](https://www.hemrock.com/byom).

- The [Runway Tool](https://www.hemrock.com/runway-cash-forecasting) skips prebuilt revenue — add calculations directly.
- Component models — [Ecommerce](https://www.hemrock.com/ecommerce-forecasting-tool), [SaaS](https://www.hemrock.com/saas-forecasting-tool), unit economics — handle one revenue type and can plug into any base template.
- [Venture capital models](https://www.hemrock.com/venture-fund-model) share the same `Forecast` sheet, varying mainly in portfolio construction logic.

## Workflow

Building a base model from a template takes about 2 hours. The process is iterative:

1. **Write down the questions.** Before opening the model, note the main things you want the model to tell you and the key numbers you expect. Keep it as a reference.
2. **Start with baseline assumptions.** Pull from your understanding of the business and comparable metrics.
3. **Iterate toward expected outcomes.** Tune growth, margins, and cash needs. Compare against your baseline.
4. **Review.** See [how to review a model](https://www.hemrock.com/docs/how-to-review) for a structured approach, especially if you're working backwards from an output.

## Preparing for stakeholders

Models exist to support decisions, so you'll share them.

- **Start with the presentation sheets.** `Summary` and `Key Reports` appear first in the workbook — readers get the big picture on open. Deeper detail is on `Get Started`, `Forecast`, and `Statements`.
- **Send a PDF first for external parties.** Investors and lenders can review the story before you hand over a live model.
- **Don't lock models.** Investors want to change inputs and test sensitivities. A locked model signals low confidence in the numbers.

## Edit with AI

Every model is built to be read and edited by Claude, ChatGPT, and other AI tools. Blue/black cell conventions, documented rows, and consistent sheet structures give AI enough context to edit without hallucinating.

- [Context primer](https://www.hemrock.com/docs/ai) — paste before any AI edit.
- [Prompt guide](https://www.hemrock.com/docs/ai) — ready-made prompts for setup, customization, investor prep.
- [MCP server](https://www.hemrock.com/mcp) — connect Claude Desktop or Claude.ai directly.
- **Verify before trusting.** AI introduces subtle errors (wrong references, hard-coded values, confused metrics). The prompt guide includes sanity-check prompts to catch these.