PAFI-6 Janv 2015- Cedric Naintré -Fundraising Finance Modeling

8/10/2019 PAFI-6 Janv 2015- Cedric Naintré -Fundraising Finance Modeling

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FUNDRAISING:FINANCIAL MODELLING

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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?



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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Part 1

What is my revenue

model “family” and itssibling?



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




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




Part 1

Subscription


• 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



Part 1

Mobile


• 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



Part 1

Transactions


• 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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Part 1

What are my

parameters?

A few rules and some choicesLook at benchmarks




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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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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?



HOW MUCH SHOULD I RAISE?

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Part 2

Cash analysis




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Part 2

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2 tranches




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Part 2

Cash requirement diff thancapital to be raised (20%/25%)




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Part 2

Amount to close

Minimum closeMaximum close



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Part 3 What will investors look for?



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



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?

Documents

PAFI-6 Janv 2015- Cedric Naintré -Fundraising Finance Modeling