Startup Finances from 10000 feet

Terminology

• Runway: How many months till there is no more money
• Burn (rate): How many dollars are used each month
• Cash: How much cash is in the bank account
• Financing: Where money comes from and goes to

Building the model

• Revenues: where do they come from?
• Pricing: per unit? per user? per partner?
• Costs: where do they come from?
• Cost Drivers: what variables have an effect on costs?
• Growth: What parameters in the model change over time
• Growth: What is your objective?

What you can learn from the model

• When are you going to run out of money?
• What is the sensitivity to changing parameters?
• When will your business become sustainable?
• How much money should you raise?
• Where is your money coming from
• Where is it going?