I prefer the bottoms up expense buildup of people as opposed to a broad percent of total calculation as it introduces more discipline to the forecast and reduces risk of weird situations where sales go up by x% and all of a sudden you’re hiring 3 half people (in models I expect to see expenses go up in steps because that’s how they work in practice). Also gives insight into the mindset of the forecaster. For example do they assume 2 sales people can cover 300 accounts while building a pipeline without SDRs? I am an operator, not a VC so perhaps it’s an audience preference.
I think it would be good to have a bottom up forecast for the first 12 months. Apart from that, a disciplined forecast will clearly show how the calculation was derived and what assumptions went into it. You should not have to dig through a bunch of data to gain insight into the mindset of the forecaster - the forecaster is supposed to put that info in the model! If they can justify year 1's sales expenses by mentioning that it's for 2 sales people + an SDR, then great! Just don't expect that granularity in year 3.
It's quite easy to avoid the "3.5 people" issue by making it a step function (i.e. rounding). Once again your assumptions become explicit, which is good. E.g. you might decide that one person can do the work of 1.3 employees (people can do this for a while when it's needed!) and round everything above that up to 2.
However, when forecasting 3 years in advance as in the article, the fact that your model has you hiring fractional people becomes less important.
