Читать книгу Startup CXO - Matt Blumberg - Страница 21

The pitch deck should have two types of financials: current financials and projections.

Current financial statements should include at least the current year‐to‐date (YTD) income statement with detail at least showing:

 Revenue makeup. Often you will want to break out revenue into “types,” for example, breaking out subscription/recurring revenue from transactional and service revenue or breaking out hardware revenue from subscription revenue.

 Gross margin. Each industry will have gross margin benchmarks that are useful regardless of the stage of the company.

 Costs. Knowing the costs of the following is very useful:Research and DevelopmentSales and MarketingGeneral and AdministrativeInvestors like to benchmark these measures, although these will be very different depending on the type and stage of the business.

 Operating margin/earnings before interest, taxes, and depreciation (EBITDA). This is another metric that can vary widely depending on the industry, stage, and growth rate. Sophisticated investors will be able to easily decipher this metric and account for industry, stage, and growth rates, so include it even if the number looks bad to you.

 Balance sheet and cash flow. These can be included if there is an appendix or highlights like cash balance, cash burn, and runway on the financial slide. In addition, there are a handful of other possible reasons to have more of the balance sheet in the deck:material capital expenditures,large working capital variability or requirements, especially around product inventory,commercial debt,significant leases or other off‐balance sheet liabilities.

Financial projections are more important for later‐stage companies than early‐stage startups but you need to have some projections. This will help the investor understand your thoughts on the unit economics, margins, and needed investments. This is also one of the best ways a CFO can be a good partner with the CEO. Your role can range from sitting down and crunching through the model with the CEO, to creating the model yourself and iterating after getting input from the CEO on the key drivers and assumptions that make up the forecast.

For an early‐stage company the financial projections can provide the investor a picture on how you see the company's finances evolving as the company matures. Specifically, you'll want to consider the gross margin, show what the operating margin can become as the company matures, and provide a rough idea of time to profitability with total cash burned. Even though most investors realize that the projections will quickly become dated as you have yet to figure out all of the key unit economics and product‐market fit, it's your thinking about the projections that is critical to receiving financing. Another good idea is to use “mental math” to quickly sanity check the story that the financials are telling you. Does this gross margin improvement make sense? How much of the increase in revenue is falling down to profit and does that make sense? Does the employee base assumption make sense, given the client count increase?

The projections for later‐stage companies will need to be much more defensible as there is now some history. For later‐stage companies, your projections play a much greater role in valuation, which determines nearly everything in the financing moving forward. Your discussion around the projections should include something on key initiatives to improve growth rates and margins. For example, a major initiative could be that customer retention will improve by 5% each year and the discussion should include WHY this is possible and the economic impact of that improvement. Having realistic and defensible projections will require the CFO to deeply understand the business and be a great partner to the other teams like Sales, Service, and Marketing.