Bryan Starbuck, a founder's institute mentor and former CEO, discusses the importance of financial modeling for startups to prevent failure. He recommends modeling revenue early to test pricing strategies and business models. Investors expect proposed companies to target large markets of $40-80 million in revenue annually. However, 95% of companies pursue markets that are too small. To attract investors, companies need to prove they can reach over $100 million in revenue for angels or $400-800 million for VCs. They must also show there is a real problem for customers, their solution solves it uniquely, and customers will pay the company's prices for a huge target market.