A step by step approach for startup entrepreneurs that a struggling with the financial (investment) plan. Including links to an Excel sheet to play with. Please note that this is an introduction: there are many ways to present your financial forecast and investment need. The approach in this presentation led to funding for for the startups I worked with.

1. Financial
investment
plan for new
ventures
Benno Groosman MScBA
www.groosman.info
October 5, 2015
LaunchBase Maastricht

2. Content
• Scope
• Milestone planning
• Investment table
• Assumptions
• Cashflow and liquidity
• Revenue and profits
• Valuation
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3. Scope
• The financial plan is part of your business plan
– See for example http://www.slideshare.net/benno_groosman/writing-an-
effective-business-plan-49179966
• In this presentation I focus on new ventures that need (high) initial
investments and deal with future uncertainty and risk
– Though, the basics work for other types of ventures too
• This is an introduction; your financial plan requires a lot of practice
and updating.
• There are many ways of presenting your numbers; I show how I did
it in my (funded) business plans and included these examples.
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4. Milestone planning
A milestone is the achievement of a significant step in your venture
planning, which adds value to your venture.
• Define the milestones in your startup plan
• Determine the amount of money you need to reach each milestone
• Match milestones with available funding sources
• Can you combine the milestones for funding?
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5. Titel- en inhoudopmaak met lijst
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6. Titel- en inhoudopmaak met lijst
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Download at:
www.milestonebasedfunding.com

7. Investment table
• The milestone planning gives you an indication of the amount of
money you need and when you need this
• In your business plan you don’t only present the total costs of each
milestone, but you also split it to the category of costs (e.g. R&D,
salary, office, materials)
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8. Example investment table medtech
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9. Example investment table medtech (type of costs)
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Note: you can define your own categories, this is just an example.

10. Assumptions
• After the milestone planning and the investment table you have an
idea of the amount of money you need to raise
• In order to raise money you have to show financial projections for
the future
• For these projections you have to make estimates of costs and
revenues
• In new ventures these estimates are assumptions
• The number is not the most important, the assumptions you made
to get to this number is!
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11. Assumptions (example)
“For the cash flow prognosis a conservative, base scenario was
chosen. Only from 2018 we calculate revenues out of a sale of initially
3 to 20 products per month by end 2020 (target price €2000 start and
€1500 end of this period). End 2017 we expect to have IP license
income and production deals with strategic partners (of which one
already signed a first right of refusal).
The costs for maintenance of our patents are included.The IP license
costs are also included. A 25% cost for production is taken of the
product sales. As it is a medical product, certification costs are taken
into account.The overhead costs consist of rent, office,
administrative and regular insurance costs. Paying back loans is
included in the prognosis.”
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12. Template prognosis cashflow (example)
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13. Template prognosis cashflow
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Cashflow is the moment that the money reaches or
leaves your bank account (this is timed differently
than revenue or costs).
You can define your own cash inflow and outflow
categories, but keep the number of posts limited.
Cashflow = SUM(cashflow in – cashflow out)
Liquidity = Start number bank account + cashflow

14. Liquidity
• The liquidity (money on your bank account and cash) is crucial for a
startup, this determines the survival of the venture
• For this reason the prognosis per month is required
• A negative liquidity gives the need for additional funding (on top of
the funding need that came from your investment table)
• What is the extra funding needed on the next slide?
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15. Liquidity (example)
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16. Liquidity (example)
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Although the liquidity at the end of the year is -47,7k, the lowest
number is -62,5k and therefor this is the minimal required extra funding
amount (on top of the 100k + 83,2k in the cashflow statement)

17. Example 5-year cashflow and liquidity statement
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18. Example 5-year cashflow and liquidity statement
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Download at:
www.bit.ly/cashflowfinplan

19. Revenue and profits
• If you agree on a sale or purchase today, the revenue or cost occurs
today
• The cashflow in or out, occurs days to months later though
• Therefor is your cashflow and liquidity statement not the same as
your revenue, profit and loss statement
• For example: a product you deliver to a customer at 15-12-2015
with a 3 week payment term, does not show up in your 2015
cashflow in, but does show up in the revenues that year
• But: the costs for making that products (cashflow out and cost)
usually do both occur in 2015
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20. Valuation
• Your financial prognoses can give an indication on valuation
• For this you can also refer to
http://www.slideshare.net/benno_groosman/how-to-close-an-
investment-deal-2015 from sheet 26
• On the next slides we will focus on the discounted cashflow method
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21. Discounted cashflow
• Take the total cashflow for each year
• In the 5 year prognosis at
www.bit.ly/cashflowfinplan this is €18.800; €
153.500; € 87.615; -€ 14.963 € 113.460 in year
1, 2, 3, 4 and 5
• The discount rate is -0,15 (15 percent)
• =18.800*0,85+153.500*0,85^2+87.615*0,85
^3+-14.963* 0,85^4+113.460*0,85^5
• So, the DCF is €223.223 in 5 years
• This number is not totally fair, as it also
includes the funding in these 5 years
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22. Your questions
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23. www.groosman.info
Thanks for your attention!
Please feel free to contact me
Benno Groosman MScBA
Email: benno@groosman.info
Website: www.groosman.info
Twitter: www.twitter.com/Benno_Groosman
Slideshare: www.slideshare.net/benno_groosman