Module 7: Your Financial Plan

In the last post, I offered a brief survey of the traditional funding sources for early startups. As in our textbook, I like to separate non-equity from equity funding sources, as the latter tend to be more applicable to later-stage ventures. By focusing on these early, non-equity funding sources. In a sense, every dollar counts towards … Continue reading The Practice of Bootstrapping

Any discussion on early venture funding should begin with what is needed based on the stage of the development. Most founders start the funding discussion with questions like, how can I meet venture capitalists to fund my new enterprise? The more savvy founder may ask the question: when is the appropriate time to start thinking … Continue reading Startup Finance | Early Funding

Over the past couple of posts, I have highlighted metrics to consider to measure product engagement and customer acquisition. For the final article on metrics, you will learn more about indices of your venture's financial performance. These metrics fall into three categories: Revenue, Profit, and Funding. The post ends with a discussion of the One … Continue reading Startup Metrics | Financial Performance

As we continue to explore the various elements of financial planning for startups, it is time to look at the multiple ways you can measure and monitor your performance once you launch your venture. In a previous post, I outlined several pre-launch metrics that founders should consider monitoring as they develop their business model. These pre-launch metrics … Continue reading Startup Metrics | Product Engagement

In the last few posts, I have discussed how to project startup revenues and costs for your venture. With these foundational financial model inputs, you can now go to Step 3 and build your pro forma financial statements. There are three primary financial statements for business: Income Statement, Cash Flow, and Balance Sheet. Let's start by looking at each … Continue reading Startup Finance | Financial Statements

In a recent Wall Street Journal article, the venture funding "party" has stalled due to several economic factors ranging from rising interest rates to rapidly growing inflation. As a result, many significantly funded startups with historically high valuations are not meeting growth targets. Additionally, they are experiencing unanticipated rising costs. Suddenly, it's time for startups to … Continue reading Startup Finance | Pre-Launch Costs

Entrepreneurs need to be able to plan operations and evaluate decisions using projected financial information. Therefore, annual budgets, cash flow forecasts, and breakeven analyses are essential financial tools for founders to apply to their new ventures. Still, they provide the required information for potential investors or lenders when needed. After reading my posts on startup … Continue reading Startup Finance | Revenue Forecasts

There are some general approaches that one can apply to ensure that you don't make the common financial errors as outlined in an earlier post. In that post, I listed eight mistakes commonly made by founders as they work to understand the mechanics of their business model. As I always state, projecting the financial performance of … Continue reading Startup Finance | Making Assumptions