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January 18, 2012
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Financial Projections&
FundingFrank Moyes
Leeds College of Business
University of ColoradoBoulder, Colorado
Frank Moyes 1
Agenda Quiz Financial Projections Funding Investor Presentations
Frank Moyes 2
What is the V-word?
Financial Projections Focus Profitability & Cash Flow
Frank Moyes 3
Profitability
= Revenue – Expenses
Financial Viability
IncomeStatement
Frank Moyes 4
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
Frank Moyes 5
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
Frank Moyes 6
Cash Flow Profitability Working Capital Equipment
Or Cash In vs. Cash Out
CashFlow
Frank Moyes 7
Tools Financial Models of Income Statements
and Cash Flow Simple Income Statement Most Common
Frank Moyes 8
Funding Types & Sources Pros & Cons
Frank Moyes 9
Types of FundingEquityDebtGrants
Frank Moyes 10
Equity
Sell ownership in your companyAdvantage - permanent capitalMay lose control (dilution)Responsibilities to investor –
requires return
Frank Moyes 11
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
Frank Moyes 12
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
Frank Moyes 13
Sources of Funding Venture capital Angels Banks Friends & family Best? Use Own Resources to
First Prove the Concept
Frank Moyes 14
Investor Presentations Importance of introduction Opportunity/Need Solution Target Customer Sustainable Competitive Advantage Financial Viability Management
Frank Moyes 15