The document outlines essential elements of startup financial forecasting, focusing on unit economics, market opportunities, and cash flow planning. It provides detailed examples of potential market sizes across different regions and presents a cash flow plan with projections for several years. Additionally, it discusses sales representative structures, associated costs, and key metrics like contribution margins and lifetime value.

1. STARTUP FINANCES
FORECASTING, MODELLING & METRICS

2. MY VANTAGE POINT

3. EXCITED ALIGNED
VC PROCESS (SIMPLIFIED)

4. FINANCIALS?
I DON’T HAVE THOSE.

5. 1) UNIT ECONOMICS
2) MARKET OPPORTUNITY
3) CASH FLOW PLAN
SURE YOU DO…

6. REVENUES & COSTS ASSOCIATED
WITH A BIZ MODEL ON A UNIT
BASIS (COMMON DENOMINATOR)
UNIT ECONOMICS

7. EXAMPLE

8. DEMAND THAT A FIRM CAN
EXPLOIT BECAUSE IT IS NOT BEING
ADDRESSED
MARKET OPPORTUNITY

9. EXAMPLE
# Registered Market Size (buy) Market Size Percentage
Africa 190,152 57,045,600$ 34,227,360$ 5.27%
Americas 480,879 144,263,700$ 86,558,220$ 13.32%
Asia 1,311,823 393,546,900$ 236,128,140$ 36.33%
Europe 1,163,058 348,917,400$ 209,350,440$ 32.21%
Oceania 465,395 139,618,500$ 83,771,100$ 12.89%
World Total 3,611,307 1,083,392,100$ 650,035,260$ 100%

10. EXPECTED INFLOWS & OUTFLOWS
OF CASH OVER A DEFINED PERIOD
OF TIME
CASH FLOW PLAN

11. EXAMPLE
2014 2015 2016 2017 2018 2019
Operations
Cash In Revenue 598,000$ 1,867,500$ 4,975,000$ 6,965,000$ 8,955,000$
CoGS 100,000$ 337,500$ 1,012,500$ 1,275,750$ 1,125,000$
Contribution Margin 498,000$ 1,530,000$ 3,962,500$ 5,689,250$ 7,830,000$
83% 82% 80% 82% 87%
Cash Out Salaries $330,000 $770,000 $1,320,000 $1,980,000 $2,750,000
Working Capital $84,375 $253,125 $318,938 $281,250 $421,875
Rent + Office Expense $20,000 $43,750 $65,625 $87,500 $109,375
R&D / Prototyping $150,000 $500,000 $625,000 $687,500 $756,250
Legal/Accounting $50,000 $100,000 $150,000 $225,000 $337,500
Marketing $149,500 $466,875 $746,250 $1,044,750 $1,343,250
Total $783,875 $2,133,750 $3,225,813 $4,306,000 $5,718,250
Cash Flow from Operations (285,875)$ (603,750)$ 736,688$ 1,383,250$ 2,111,750$
Financing
Equity $500,000 $1,000,000 $0 $0 $0
SRED $25,000 $75,000 $250,000 $312,500 $343,750
CASH BALANCE $200,000 $439,125 $910,375 $1,897,063 $3,592,813 $6,048,313

12. FINAL THOUGHTS

13. IF YOU WERE GOING TO BUILD ONE OF THESE…

14. YOU’D PROBABLY WANT SOME OF THESE FIRST

15. DISCUSSION

16. EXAMPLE
"Beachhead" Rep (BH) "Farmer" Rep (F)
Billings
Deals / Month 3.00 4.00
Deals / Year 36.00 48.00
Avg Price Point 6,500$ 6,500$
$ / Rep / Year 234,000$ 312,000$
Costs
Base $ 65,000$ 45,000$
Commission % 15.0% 12.5%
Commission $ 35,100$ 39,000$
OTE $ 100,100$ 84,000$
Allocated Costs 35,000$ 25,000
Total 135,100$ 109,000$
Contribution Margin
First Year $ 98,900$ 203,000$
First Year % 42% 65%
Life Time Value $ 566,900$ 827,000$
LTV/CAC 4x 8x