pafi-6 janv 2015- cedric naintré -fundraising finance modeling
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8/10/2019 PAFI-6 Janv 2015- Cedric Naintré -Fundraising Finance Modeling
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FUNDRAISING:FINANCIAL MODELLING
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8/10/2019 PAFI-6 Janv 2015- Cedric Naintré -Fundraising Finance Modeling
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QUESTIONS
1. How should I build my financial model?2. How much should I raise?3. What will investors look for?
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PART 1
HOW SHOULD I BUILDMY FINANCIAL MODEL?
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HOW SHOULD I BUILD MY FINANCIAL MODEL?
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Part 1
What is my businessmodel?
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HOW SHOULD I BUILD MY FINANCIAL MODEL?Part 1
Revenue
models
Commerce
Advertising
Subscription
Peer-to-
peer
Transaction
Processing
Licensing
Data
Mobile
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HOW SHOULD I BUILD MY FINANCIAL MODEL?
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Part 1
What is my revenue
model “family” and itssibling?
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Part 1
Commerce • Retaiing - ex. Zappos• Marketplace - ex. Etsy• Crowdsourced Marketplace - ex. Threadless• Excess Capacity Markets - Uber, AirBnB• Vertically Integrated Commerce - ex. Warby Parker• Aggregator - ex. Lastminute.com• Flash Sales: Gilt Groupe, Vente Privee• Group buying - ex. Groupon• Digital goods / downloads - ex. iTunes• Virtual goods - ex. Zynga
• Training - ex. Coursera• Pay what you want - ex. Radiohead• Commission - ex. SharesPost• Commission per order - ex. Seamless, GrubHub• Auction - ex. eBay• Reverse Auctionex Priceline
• Barter for services ex. SwapRight
HOW SHOULD I BUILD MY FINANCIAL MODEL?
8/10/2019 PAFI-6 Janv 2015- Cedric Naintré -Fundraising Finance Modeling
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Part 1
Advertising • Display Ads - ex. Yahoo!• Search Ads - ex. Google• Text Ads - ex. Google• Video Ads - ex. Hulu
• Audio Ads - ex. Pandora• Promoted Content - ex. Twitter, Tumblr• content links - ex. Outbrain• Recruitment Ads - ex. LinkedIn• Lead Generation - ex. MoneySuperMarket, ZocDoc• Affiliate Fees - ex. Amazon Affiliate Program
• Classifieds - ex. Craiglist• Featured listings - e.g. Yelp, Super Pages;• Email Ads - as done by Yahoo, MSN• Ad Retargeting - ex. Criteo
• Real-time Intent Ad Delivery
• Location-based offers - ex/ Foursquare• Sponsorships / Site TakeoversPandora
HOW SHOULD I BUILD MY FINANCIAL MODEL?
8/10/2019 PAFI-6 Janv 2015- Cedric Naintré -Fundraising Finance Modeling
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Part 1
Subscription
HOW SHOULD I BUILD MY FINANCIAL MODEL?
• Software as a Service (SAAS) - ex. Salesforce• Physical Service - ex. Range-Moi
• Content as a Service - ex: Spotify, Netflix• Infrastructure/Platform As A Service - ex. AWS• Freemium SAAS - ex. Dropbox• Donations - ex. Wikipedia
• Sampling - ex Birchbox• Membership Services - ex Amazon Prime• Support and Maintenance - ex 10gen, Red Hat• Paywall - ex. NYTimes• Voice and video-conferencing - ex. Uberconference
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Part 1
Mobile
HOW SHOULD I BUILD MY FINANCIAL MODEL?
• Paid App Downloads - ex. WhatsApp
• In-app purchases - ex. Zynga Poker• In-app subscriptions - ex. NY Times app
• Advertising- ex. Flurry, AdMob
• Digital-to-physical - ex. Red Stamp, Postagram
• Transactions - ex Hailo
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Part 1
Transactions
HOW SHOULD I BUILD MY FINANCIAL MODEL?
• Merchant Acquiring - ex. PayPal (Online / Offline)Stripe (Online), Square (Offline)• Intermediary - ex. IP Commerce (POS 2.0), CardSpring• Acquiring Processing - ex. Paymentech• Bank Transfer - ex. Dwolla• Bank Depository Offering - ex. Simple, Movenbank (spread on average deposits)• Bank Card Issuance - ex. Simple (interchange fee per transaction)• Fulfilment - ex. Amazon• Messaging - ex. Peer-to-Peer SMS, IM, Group Messaging
• Telephony - ex. termination/origination in public telephony networks (skype out/in)• Telephony - ex. termination/origination within private telephony cloud (e.g. native skype)• Payment Gateways: Mobile -ex. Braintree• Platform Monetisation ("Tax") - Facebook Credits; iO6 30% cut.
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HOW SHOULD I BUILD MY FINANCIAL MODEL?
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Part 1
What are my
parameters?
A few rules and some choicesLook at benchmarks
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HOW SHOULD I BUILD MY FINANCIAL MODEL?
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Part 1
Elements of the P&LEagle view
DetailsParameters for scenariosMonths, quarters and years, no dates
Separate variable and fixed costsCOGS or no, intermediate margins if itmakes sense
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HOW SHOULD I BUILD MY FINANCIAL MODEL?
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Part 1
Elements of the P&LCAC - benchmark Contribution MarginBreakeven, payback Opex (var + fixed costs)CapexCashflowAny parameter that makes sense to your
model (Churn, CLV)
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How much should I raise?
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HOW MUCH SHOULD I RAISE?
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Part 2
Cash analysis
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HOW MUCH SHOULD I RAISE?
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Part 2
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8/10/2019 PAFI-6 Janv 2015- Cedric Naintré -Fundraising Finance Modeling
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HOW MUCH SHOULD I RAISE?
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Part 2
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8/10/2019 PAFI-6 Janv 2015- Cedric Naintré -Fundraising Finance Modeling
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HOW MUCH SHOULD I RAISE?
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Part 2
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2 tranches
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HOW MUCH SHOULD I RAISE?
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Part 2
Cash requirement diff thancapital to be raised (20%/25%)
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HOW MUCH SHOULD I RAISE?
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Part 2
Amount to close
Minimum closeMaximum close
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Part 3 What will investors look for?
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WHAT WILL INVESTORS LOOK FOR?
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Part 3
No “conservative” bsOne scenario that makes sense (no money-printing scheme)
Business logic/benchmark (CAC?)ParametersEagle view
Understanding of key indicatorsCost/profitability analysisCashflow understandingCap table that makes sense
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WRAP-UP
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1. How should I build my financial model?2. How much should I raise?3. What will investors look for?