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Presentation on Revenues, Costs and Profits

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How do you plan to make money? How do you build a financial model? What are the types of expenses, such as fixed expenses and costs of goods sold, and how do they scale? How do you know if your model …

How do you plan to make money? How do you build a financial model? What are the types of expenses, such as fixed expenses and costs of goods sold, and how do they scale? How do you know if your model is right? What do angel investors and venture capitalists expect from your financial model? How do you identify the key metrics for your success?

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  • 1. Revenues, Costs and ProfitsFounder Institute – January 10, 2013This document is strictly confidential and must not be given to any third party, or be reprinted or copied in whole or in part without the prior consent of the author.© 2013 Nomadesk NV
  • 2. About Nomadesk? Nomadesk is a file sharing and synchronization solution . designed for business professionals ► “Zero thought, in-the-flow file sharing, synchronization and data security” – McKinsey & CThis document is strictly confidential and must not be given to any third party, or be reprinted or copied in whole or in part without the prior consent of the author.© 2013 Nomadesk NV
  • 3. about.me/FilipTack ► Co-founder and CEO at Nomadesk. ► Co-founder and Chairman at Carambla; a real-time marketplace for parking. ► “Startup executive”; business and team builder with a predilection for disruptive innovation and startup business. ► Raised over USD 10 million in venture capital (seed, series A and B). ► Bootstrapped Nomadesk and made it into a revenue generating SaaS- business (CAGR of 271%). Nomadesk was selected by the Guidewire Group during Innovate! 2009 as "the most promising European startup”. The company is one of the Deloitte Technology Fast 50 2012 and features on the Red Herring 100 Global 2012.This document is strictly confidential and must not be given to any third party, or be reprinted or copied in whole or in part without the prior consent of the author.© 2013 Nomadesk NV
  • 4. How do we plan to make money? ► What’s our business ► What’s our go-to-market model like? like? – Who will (decide to) pay – How will we reach our customer? for what? o Online (marketing – What will our revenue spend?!) stream(s) look like? o Direct (sales o Recurring (SaaS) people, commissions) o One-off (product, license) o Indirect (account management, commissio o Professional services ns) (consultancy) – Oh… and so you know… o All of the above?! marketing is expensive! “Build it and they won’t come…”This document is strictly confidential and must not be given to any third party, or be reprinted or copied in whole or in part without the prior consent of the author.© 2013 Nomadesk NV
  • 5. Nomadesk Go-to-Market – “Push and Pull” • Integrator/OEM/Reseller Program: • Discounted LicensesIndirect Push • Recurring White Label Fees • Recurring Mobile App Fees – Scale • Freemium/Trial • Min. commitments • Min. opportunity size: 500+ users Direct Pull – • Recurring SaaS License Model: • Perpetual licenses as back pocket to close “Prime the • Private cloud offering • Professional Services Pump” • Production Pilot for €5-20KThis document is strictly confidential and must not be given to any third party, or be reprinted or copied in whole or in part without the prior consent of the author.© 2013 Nomadesk NV
  • 6. How do we build a financial model? ► What’s your “revenue ► What will it take to make engine”? Keep it simple! the “engine” run? Keep it real! – OPEX: – Google $ = # visitors * o People (queries/visitor) * o Utilities (ads/query) * (clicks/ad) * ($/click) o Services o Stuff… you never thought – Nomadesk Online € = # of unique * (trials/unique) * (customers/trial) * – CAPEX: (€/customer) o Hardware – Nomadesk Indirect € = # o Software calls * (leads/call) * o Gizmo’s… beyond (prospects/lead) * imagination (resellers/prospect) * – Variable vs. Fixed (€/reseller)This document is strictly confidential and must not be given to any third party, or be reprinted or copied in whole or in part without the prior consent of the author.© 2013 Nomadesk NV
  • 7. Financial Plan; Possible Structure; Monthly & Quarterly 2013 Quarters Q1-13 Q2-13 Q3-13 Q4-13 License/Subscription Revenues $- $- $- $- Maintenance Revenues $- $- $- $- Services Revenues $- $- $- $- Quarterly Revenues $- $- $- $- Yearly Revenues $- COGS $- $- $- $- Operating Expenses $- $- $- $- Sales $- $- $- $- Marketing $- $- $- $- R&D $- $- $- $- Operations $- $- $- $- General & Aministrative Expenses $- $- $- $- Quarterly Result ($) $- $- $- $- Financing Cash Flow ($) $- $- $- $- Cash Burn ($) $- $- $- $- Cash ($) $- $- $- $- Capital Equipment $- $- $- $- Cash ($) post capital purchases $- $- $- $- 2013 EBITDA ($) $- EBITDA Margin 0% Value DriverThis document is strictly confidential and must not be given to any third party, or be reprinted or copied in whole or in part without the prior consent of the author.© 2013 Nomadesk NV
  • 8. What You are an investor too!!! Investors Want: “No Surprises” You want this also!!! ► Financials, that are: ► Actionable KPIs (e.g.; – Clear Bessemer’s Top 10): – Correct – Customer Acquisition Cost – Comprehensive (no loose- – Customer Lifetime Value ends) – Committed Monthly – Consistent (month-by-month) Recurring Revenue ► Accurate Cash Flow: – Churn – “Cash flow is more important – Cash Flow than your mother”; doubt this at ► Budgets, Forecasts & your own peril! Actuals – Die a “rich man” ► Scalability ► When investors get involved… ► Exit Value / Benchmarks: get help!: – Determine your value driver – Death by crunching numbers ;-( o Revenue? o EBITDA? o (Eyeballs???)This document is strictly confidential and must not be given to any third party, or be reprinted or copied in whole or in part without the prior consent of the author.© 2013 Nomadesk NV
  • 9. Demonstrated “Scalability” (example) “Show me the spread”This document is strictly confidential and must not be given to any third party, or be reprinted or copied in whole or in part without the prior consent of the author.© 2013 Nomadesk NV
  • 10. Exit Value Drivers, Benchmarks ► Window: – … ► Valuation: – 10x to 20x EBITDA; growth dependent – $... ► Trade Sale Targets: – ACME Corp., Humongous Inc., etc. Revenue Growth vs. EBITDA Multiple; derived from public market comparables such as SalesForce, LivePerson, etc. (source: Redwood Capital) ► IPO Examples: ► Trade Sale Examples: – LogMeIn: – Mozy: o 1998 o bought by EMC, Sep. 2007 o IPO in June 2009 o 180.000 users at acquisition o 190.000 paying users at IPO o $76M o Market cap. $400M – SwapDrive: o 8x revenue o 1998 o just became profitable o bought by Symantec, June 2008 o $123MThis document is strictly confidential and must not be given to any third party, or be reprinted or copied in whole or in part without the prior consent of the author.© 2013 Nomadesk NV
  • 11. Contact Supporting documents: http://nmd.sk/V4ekYHwC Filip TACK filip.tack@nomadesk.com twitter.com/ftack DOWNLOAD A TWO WEEK FREE TRIALThis document is strictly confidential and must not be given to any third party, or be reprinted or copied in whole or in part without the prior consent of the author.© 2013 Nomadesk NV