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Project Outline
Deliverables
Presentations
Examples
Basic Financial Modeling
Fundamentals of the financial plan
Money
Life blood of a business are resources
You consume resources and you generate value
Remember Gazintas > Gazoutas
Very basic financial modeling
Basic terms
Costs
Revenues
Profits
Core calculation:
Profits = Revenues - Costs
Types of costs
Fixed
Variable
Division is not always clear cut
Fixed Costs
Cost you have to get to the first ‘thing’
First release? First sale? First Orange Juice Sold?
Rent
Communications
Variable Costs
Marketing expenses
Salaries
Raw Materials
Independent variables
Units sold?
Units manuctured?
Number of employees?
Number of customers?
Target new customers per month
‘Programming’
Learn to be very comfortable with a spreadsheet
Google Sheets is fine, excel is fancier
Groupwork: Lemonade Stand 2.0
Form groups of 5 students and model
Forecast over 1 year in excel
Answer these questions
What is minimum initial investment to avoid going out of business
With an initial investment of $100, how much money in piggy bank at end of year
Input assumptions. Design model to allow these to be tweaked
Staff: 2 kids
Price: $1.50 per cup
Workweek: 40 hours
Hourly wage: $6
Cost for a paper cup: $0.05
Cost for making lemonade: $0.10 per cup, including labor and raw materials
First day sales: 100
Organic growth: 5% per month
Ad-driven growth: 1% per month for $25 spent on ads
Advertising spend: $25
Initial investment from parents: $100
More complicated example
Download and take a look at
this simple financial model spreadsheet.
Simplistic Paid Engine of Growth
More complicated: Sticky Engine of Growth
More realistic template
Jeffrey Beir’s:
Your Financial Model
Key Points
Developing a plan that balances capital/time/milestones
Deciding what need to do now, and what can be deferred
Defining your financing milestones
Determining how much capital to raise for your first milestone
Insuring you position yourself for the next financing, ideally at a step-up
Welcome
2018 Syllabus
Calendar of Lectures and homeworks
Resources
Lectures
Pilot Project
Welcome!
Lean Startup
Hypotheses
Working on Teams
MVP
Guest Lecture: Michael Skok
Pilot Project Conclusion
Term Project: Startup
Welcome to Term Projects!
Build Measure Learn
Project Planning
The Pivot
The Engine of Growth
Mockups & Prototypes
Testing Techniques
Term Project: Product
Product Market Fit
Jeffrey Beir: Metrics
Business Models
Pricing Models
Andy Payne: Startup Finance
Intellectual Property
Term Project: Business
Finance for Geeks
Founding a company
Real World Survival Kit
Management and Leadership
Dulcie Madden: Startup Teams
Last day converstation
Term Project
Term Project Outline
Minimum Viable Product Info
Hypotheses
Final Presentations
Background
Learning Goals
Grading
Teachers
Lexicon
Interesting links
Credits and acknowledgements