The majority of start-ups fail because they run out of cash.
A good financial model can serve as a health barometer and predict issues.
Don't leave business planning to chance.
Hire a strong CFO at the outset, even if it's part-time.
Angela-Marie Graham ("AMG") is an SME CFO with an eclectic career, that started with a work placement in an art supply company that wouldn’t use a computer because a catastrophic failure a year early! "But I used a spreadsheet because even as a junior I knew how important they were. Since then, I have worked in the book publishing, telecoms, energy and retail businesses, amongst others and now work for a practice where most of our clients are start ups including software developers, and those aiming to make world changing biomedical advances. And I love what I do and consider myself fortunate that I actually found accountancy!"
Main topics and learnings:-
1.1. Keep your cap table clean both in terms of employees and investors.
1.2. Follow-on funding is a reality. Plan for it and link it to your value inflection points.
1.3. Fundraise 25% more than you think you'll need.
1.4. A good financial model helps you plan, refine your thinking and convey your business idea.
1.5. Keep your financial model very simple. It just needs to tell a story. No macros please.
1.6. As the CEO, you must own the financial model.
2.1. Be prepared for banks and find your zen place before you start.
2.2. There is lots of admin. Understand your strengths and weaknesses.
2.3. Use an accounts@email for future-proofing. Use a password manager.
2.4. You will have sleepless nights. Take time out, it is incredibly important.
2.5. Hire for your weaknesses, find trusted suppliers and then 'let go.'
2.6. Find a mentor who is also an entrepreneur.
3.1. When hiring, stop looking for 'Jesus in a skirt.' Hire for attitude & passion.
3.2. Diversity is not about ethnic origin. Look for diversity of thinking.
3.3. Don't be too cheap. Invest your business. Always respect the cash though.
If the above doesn't sound all that exciting, get help. There are people who specialise and love doing these types of things.
Chat soon,
Alex @thetippytopblog