Financial Projections&

FundingFrank Moyes

Leeds College of Business

University of ColoradoBoulder, Colorado

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Agenda Quiz Financial Projections Funding Investor Presentations

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What is the V-word?

Financial Projections Focus Profitability & Cash Flow

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Profitability

= Revenue – Expenses

Financial Viability

IncomeStatement

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Operating Income Statement

Year 1

Revenues $100,000

Cost of Revenues 60,000

Gross Profit 40,000

% Gross Profit 40%

Operating Expenses

Sales & Marketing 15,000

Development 5,000

Administrative 10,000

Total 30,000

Operating Income $10,000

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Focus on Revenue Model

How many widgets, customers, transactions At what price

Gross Profit Margins Price vs. Cost to produce Expressed as a %

Operating Expense

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Cash Flow Profitability Working Capital Equipment

Or Cash In vs. Cash Out

CashFlow

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Tools Financial Models of Income Statements

and Cash Flow Simple Income Statement Most Common

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Funding Types & Sources Pros & Cons

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Types of FundingEquityDebtGrants

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Equity

Sell ownership in your companyAdvantage - permanent capitalMay lose control (dilution)Responsibilities to investor –

requires return

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Debt Loan for a set period & interest rate Source – banks, SBA, Guido No dilution Must pay back + interest Start-ups can’t get Vulnerable when things go south

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Grants Federal SBIR, CREDA Research – university

& corps. State, regional and

municipal development agencies

Foundations freemoney.com

No equity or debt Red tape and

strings Grant mentality

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Sources of Funding Venture capital Angels Banks Friends & family Best? Use Own Resources to

First Prove the Concept

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Investor Presentations Importance of introduction Opportunity/Need Solution Target Customer Sustainable Competitive Advantage Financial Viability Management

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