Financial Projections:  The Investor’s Perspective Elia Freedman http://mobilesuccess.infinitysw.com
Overview <ul><li>Why Financials? </li></ul><ul><li>Preparing Financials Backgrounder </li></ul><ul><li>10 Common Mistakes ...
Why Financials? <ul><li>Must have financials to raise money </li></ul><ul><li>A quantitative perspective of your business ...
What You Need <ul><li>Financials </li></ul><ul><ul><li>Income Statement/Balance Sheet/Cash Flows </li></ul></ul><ul><ul><l...
Preparing Financials <ul><li>Investor Wants To See… </li></ul><ul><li>In  reality… </li></ul>M1… M60 Q1… Q20 Y1… Y5 Detail...
How Do I Create Them? <ul><li>Create from scratch in Excel </li></ul><ul><li>Use templates (oregonstartups.com) </li></ul>...
10 Common Problems
#1: Expense Misalignment <ul><li>Examples </li></ul><ul><ul><li>Expenses don’t scale with revenues </li></ul></ul><ul><ul>...
#2: Simple Assumptions <ul><li>Examples </li></ul><ul><ul><li>Revenues will grow 20% per year </li></ul></ul><ul><ul><li>A...
#3: Missing Payroll <ul><li>Examples </li></ul><ul><ul><li>$50k/year for a VP of Marketing </li></ul></ul><ul><ul><li>Miss...
#4: Industry Mismatches <ul><li>Examples </li></ul><ul><ul><li>No COGS for hardware companies </li></ul></ul><ul><ul><li>B...
#5: Business Plan v. Financials <ul><li>Examples </li></ul><ul><ul><li>Marketing in Plan different than Financials </li></...
#6: Creation Mistakes <ul><li>Examples </li></ul><ul><ul><li>Income Statement on a cash basis </li></ul></ul><ul><ul><li>O...
#7: Ridiculous Sales Growth <ul><li>Examples </li></ul><ul><ul><li>Sales start at $10M per year </li></ul></ul><ul><ul><li...
#8: Ridiculous Cash Growth <ul><li>Examples </li></ul><ul><ul><li>Expect cash flow positive in 6 months </li></ul></ul><ul...
#9: High Revenues sans Funding <ul><li>Examples </li></ul><ul><ul><li>$100M in Net Revenue on $250,000 in funding </li></u...
#10: Top-Down Revenue <ul><li>“If we can just capture 1% of the market…” </li></ul><ul><li>Shows you are unrealistic about...
Financials: Reflection On You <ul><li>How prepared are you? </li></ul><ul><li>How trustworthy are you? </li></ul><ul><li>H...
Questions/Contact <ul><li>Elia Freedman </li></ul><ul><li>http://mobilesuccess.infinitysw.com </li></ul>
Upcoming SlideShare
Loading in …5
×

Financials: Investor's Perspective

1,511 views

Published on

An insider's view of what investors look for in a company's financial projections. Includes an overview of creating projections, common mistakes and how investors interpret them.

Published in: Economy & Finance, Business
2 Comments
5 Likes
Statistics
Notes
  • WE OFFER FRESH CUT BG/SBLC FOR LEASE AT LEASING PRICE OF (5.5+0.5)% OF FACE VALUE Issuance by HSBC Bank London , Barclays Bank London , Deutsche Bank, &amp; AAA Rated Banks,Our BG/SBLC Financing can help you get your project funded, loan financing by providing you with yearly renewable leased bank instruments, for further inquiries: Contact : John Leung Skype ID: leungbg.finance Email : leungbg.finance@gmail.com
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • Gokul Kripa colonizers and developers Pvt. Ltd.

    Real estate in Jaipur makes an enormous contribution to development of the economy and national growth. Real estate has forward and backward linkages with over one hundred and sixty five industries and is the largest employment generator, perhaps only after agriculture. However, despite the significance of this industry, it has always remained a very disorganized one. The realtors or brokers who are the interface with the consumers in the transaction processes are the most important human resource and like in the business chain. They provide the advice, information and negotiate the deals and in short, make the markets. Unless this segment of the real estate industry is reformed and elevated to international standard practices, investor confidence will be difficult to emerge. Ultimately, on the one hand, it is the globalised investment opportunities in Indian economy which are at stake and on the other, the end consumers.

    Gokul Kripa is a name that has become a synonym of trust in the mind of investors in Jaipur. Gokul Kripa Colonisers and Developers (P) Ltd. is the fastest growing company in the field of real estate development and construction in the city of Jaipur. - See more at: http://needtodial.com/index.php?page=item&id=12&redirect=1#sthash.CVT9DQYa.dpuf

    We are colonizers and We have lonched new Project near by AJMER ROAD NATIONAL HIGHWAY. Good Project for INVESTMENT Perpose

    Please get information from Here:

    http://needtodial.com/index.php?page=item&id=12&redirect=1

    Thanks
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
No Downloads
Views
Total views
1,511
On SlideShare
0
From Embeds
0
Number of Embeds
22
Actions
Shares
0
Downloads
8
Comments
2
Likes
5
Embeds 0
No embeds

No notes for slide

Financials: Investor's Perspective

  1. 1. Financial Projections: The Investor’s Perspective Elia Freedman http://mobilesuccess.infinitysw.com
  2. 2. Overview <ul><li>Why Financials? </li></ul><ul><li>Preparing Financials Backgrounder </li></ul><ul><li>10 Common Mistakes </li></ul><ul><li>Questions </li></ul>
  3. 3. Why Financials? <ul><li>Must have financials to raise money </li></ul><ul><li>A quantitative perspective of your business </li></ul>
  4. 4. What You Need <ul><li>Financials </li></ul><ul><ul><li>Income Statement/Balance Sheet/Cash Flows </li></ul></ul><ul><ul><li>Revenues Detail </li></ul></ul><ul><ul><li>Expenses and Payroll Detail </li></ul></ul><ul><ul><li>Underlying Assumptions </li></ul></ul><ul><li>Business Plan </li></ul>
  5. 5. Preparing Financials <ul><li>Investor Wants To See… </li></ul><ul><li>In reality… </li></ul>M1… M60 Q1… Q20 Y1… Y5 Detail Balance Sheet Cash Flow Statement Income Statement Y1 Y2 Y3 Y4 Y5 MONTHLY QUARTERLY
  6. 6. How Do I Create Them? <ul><li>Create from scratch in Excel </li></ul><ul><li>Use templates (oregonstartups.com) </li></ul><ul><li>Consult with a finance person </li></ul>
  7. 7. 10 Common Problems
  8. 8. #1: Expense Misalignment <ul><li>Examples </li></ul><ul><ul><li>Expenses don’t scale with revenues </li></ul></ul><ul><ul><li>Marketing doesn’t increase with sales </li></ul></ul><ul><ul><li>Support doesn’t scale with customers </li></ul></ul><ul><li>Shows how much you understand the true nature of your expenses </li></ul>
  9. 9. #2: Simple Assumptions <ul><li>Examples </li></ul><ul><ul><li>Revenues will grow 20% per year </li></ul></ul><ul><ul><li>Assumptions not documented at all </li></ul></ul><ul><li>Shows that the plan is poorly thought through </li></ul>
  10. 10. #3: Missing Payroll <ul><li>Examples </li></ul><ul><ul><li>$50k/year for a VP of Marketing </li></ul></ul><ul><ul><li>Missing Support in a software/web company </li></ul></ul><ul><li>Shows you are living in a fantasy world </li></ul>
  11. 11. #4: Industry Mismatches <ul><li>Examples </li></ul><ul><ul><li>No COGS for hardware companies </li></ul></ul><ul><ul><li>Basic ratios don’t compare to industry </li></ul></ul><ul><li>Shows how much you know about your industry </li></ul>
  12. 12. #5: Business Plan v. Financials <ul><li>Examples </li></ul><ul><ul><li>Marketing in Plan different than Financials </li></ul></ul><ul><ul><li>Costs implied by Plan ignored in Financials </li></ul></ul><ul><li>Shows that you have not thought through your business in enough detail </li></ul>
  13. 13. #6: Creation Mistakes <ul><li>Examples </li></ul><ul><ul><li>Income Statement on a cash basis </li></ul></ul><ul><ul><li>One giant income statement with no balance sheet </li></ul></ul><ul><li>Shows you don’t understand the financial aspects of business (and most likely would not run a successful company) </li></ul>
  14. 14. #7: Ridiculous Sales Growth <ul><li>Examples </li></ul><ul><ul><li>Sales start at $10M per year </li></ul></ul><ul><ul><li>Year-over-year sales increase over time (Year 1-2: 2x; Year 4-5: 5x) </li></ul></ul><ul><li>Shows your expectations are unrealistic </li></ul>
  15. 15. #8: Ridiculous Cash Growth <ul><li>Examples </li></ul><ul><ul><li>Expect cash flow positive in 6 months </li></ul></ul><ul><ul><li>Expect 50% of revenue as cash by year 5 </li></ul></ul><ul><li>Shows you are not investing enough in your business </li></ul>
  16. 16. #9: High Revenues sans Funding <ul><li>Examples </li></ul><ul><ul><li>$100M in Net Revenue on $250,000 in funding </li></ul></ul><ul><li>Shows you don’t understand how growth happens </li></ul>
  17. 17. #10: Top-Down Revenue <ul><li>“If we can just capture 1% of the market…” </li></ul><ul><li>Shows you are unrealistic about your company’s market entry and approach </li></ul>
  18. 18. Financials: Reflection On You <ul><li>How prepared are you? </li></ul><ul><li>How trustworthy are you? </li></ul><ul><li>How much do you understand the business environment? </li></ul>
  19. 19. Questions/Contact <ul><li>Elia Freedman </li></ul><ul><li>http://mobilesuccess.infinitysw.com </li></ul>

×