We have been talking a lot about financial modeling, and there seems to be some confusion around how to model the financial growth of your company. Instead of assuming, your company will just grow 10% each month, think about the drives that will cause it to grow and what it will take to get 10% each month. Will you hire more salespeople? Spend more on marketing? Attend more conferences? Run more seminars?
Last time we left you with a question, would you rather keep the Dollar Cave Club business as is? Or raise 50% more capital to spend more on customer acquisition? We know that we will become profitable sooner, but is it worth 50% more dilution? Today, we are looking at how to model both your fundraise and your founder equity.
You’ve just raised a bunch of money! Congrats! Now how much should you be spending? Last time we talked about how to use the financial model to understand the impact of raising prices and customer churn. On today’s video we are digging into how much money you should be spending and how it will effect your business in the future. What happens if you double or even triple your spend next year? Will your business thrive or shut its doors?
This week we are taking a break from financial modeling to talk about REVENUE. There are so many different ways to describe it: MRR, ARR, bookings, CARR, the list goes on! They are not all the same. Watch today’s video to understand the differences and why investors are so interested in each. It will help you do a better job of communicating how your business is progressing.
Now that you know what a financial model is, it’s time to demonstrate the power of it. In today's video Troy demonstrates this using a financial model for a fictitious company called “Dollar Cave Club”. Find out how to use your assumptions to predict what could happen in 5 years.
This week Troy walks you through an experience he had during a product launch with a CTO. Most CTO’s he has worked with in the past tend to insist the product they are putting out is perfect and get defensive when you tell them otherwise, but this CTO did something totally unexpected. Always make sure you are giving people permission to tell you the truth. Don’t ask people “what do you think of my product” as very few will be comfortable telling you the truth. Use the hack to get them to tell you why your baby is ugly!
This week we are continuing the conversation from last week about the importance of a founders’ agreement with a focus on the most critical part, vesting. What are the mechanics? How do you facilitate vesting over time? What are RSU’s? What is an 83(b)? How do you MAKE SURE you get the tax advantages that are available? We all know Troy is not a lawyer nor an accountant, but hopefully these tips can help you to set up your company with a great foundation. Of course, you should consult your lawyer before making the final decisions!!
We’ve talked a lot about the different ways to structure your fundraise. Today, we are talking about a critical tool you need in place when starting your company, the founder agreement. Some may think it’s simple, just split the ownership equally between the founders. But what happens when a founder leaves the company? Are they still entitled to the same return as the founder that has continued to work to bring the company to success? Watch today’s video hear more about what you should consider in your founder agreement.