Venture Momentum - Financial Roadmap Bootcamp

Financial Roadmap Bootcamp
Learn to Create a Financial Model That Persuades Investors

February-March 2009

As a startup entrepreneur, you’ll forever remember that moment when you had a brilliant idea that will revolutionize the way things are done. Your illuminating discovery led to one of the most exciting milestones in your career: the birth of your startup.

While you now get to work on building your new venture, you must answer an overwhelming set of questions such as:

Ų What product/service should we develop to take my idea to market?

Ų Which product development resources will we need to complete the prototype, alpha, beta and product rollout phases, and how much will they cost month after month?

Ų What is our selling strategy?

Ų How long is the sales cycle?

Ų How will we price our product/service?

Ų Which positions should we be recruiting from senior management to rank and file, when should they be hired, and what will their compensation be?

Ų What benefits will we offer employees and how much will they cost?

Ų What kind of consultants will we need, when should we hire them and how much will they cost?

Ų How much should we spend on advertising, promotion, travel, meals, office expenses, etc?

Ų How much will it cost to service customers?

Ų What will it cost to buy the equipment needed to run the company such as computers, printers, furniture, etc?

Ų How much capital will we need to reach our milestones such as completion of prototype, product rollout, reaching positive cash flow, etc?

Ų What will our income statement, balance sheet and statement of cash flows look like month after month as we grow the company?

Ų What are the Key Metrics of the business and how do they evolve over time?

Ų What will the capital requirements become if the company needs to bootstrap because institutional funding is not available?

The answers to the above questions and many others are found in a carefully crafted 5-year financial plan we call the VMI Financial Roadmap. It enables you to:

Assess the feasibility of your business concept
Formulate your team’s vision and quantify your business model
Determine your startup’s cash requirements
Establish financial objectives for your team and set benchmarks to measure the performance of your startup
Provide financial data for your business plan
Tell your story to the outside world: Investors, Lenders, Business Partners, Auditors, etc.
Monitor and adjust your business model as experience is gained in the field

The best time to develop your Financial Roadmap is before formally launching your startup. Why? Because you need to know as much as you can about your business model and objectively assess its chances of success before you invest time, money and resources and bring other people on board.

Unfortunately, many entrepreneurs find the task of developing their Financial Roadmap so daunting that they put it off until they are compelled to tackle it just before fundraising efforts start because VCs and some Angels require it. There are primarily 2 obstacles driving the procrastination:

Obstacle #1

Developing a Financial Roadmap is a challenging task which requires a combination of skills that not all entrepreneurs possess:

     1.      finance and accounting
2.      modeling
3.      spreadsheet
4.      endurance

Obstacle #2

For entrepreneurs who lack the skills listed above, and who need to retain the services of an expert, the other challenge is cost. Based on our experience developing Financial Roadmaps for our clients, the cost has averaged around $10,000 and gone as high as $15,000 depending on the complexity of the business and the level of preparedness of the entrepreneur. These amounts clearly create a hurdle for a young startup with limited financial resources.

How we can help

Venture Momentum, Inc. (VMI) offers a Bootcamp service to help a handful of entrepreneurs in the San Francisco Bay Area build their Financial Roadmap in a small group setting under the guidance of Anthony Nassar, VMI’s founder.

Using the VMI Financial Roadmap, a robust framework containing the core elements of a financial plan, you will be able to dive right into the specifics of your startup’s model without having to worry about creating many of the generic reports, formulas and graphs, which constitute the foundation of your Roadmap.

Anthony developed the VMI Financial Roadmap from the ground up and has been using it to develop financial plans for Venture Momentum’s clients. A number of VCs and Angels have said that his plans were among the best they had ever seen. The credit goes to his exceptional financial modeling skills and the impressive framework embedded in the VMI Financial Roadmap.

Following are a few quotes from startup CEOs that Anthony helped develop their Financial Roadmap:

"I met Anthony Nassar following his presentation on "Financial Modeling for Startups" at the University of California Haas School of Business. I've worked with startups as an attorney for Reed Smith in the firm's Venture Capital and Technology Practice Group, as an advisory board member, and venture capitalist for almost a decade. Anthony's work product is unequalled. It was after I saw his presentation that I decided that I had to work with him in my own venture and that any startup I was associated with should consult him for their financial modeling work.

My opinion of Anthony's work is shared. Following a presentation of my financial model to a partner at a major VC firm in San Francisco, the partner observed that it was the most well produced financial model he had ever seen.

Anthony is knowledgeable and thoughtful; a pleasure to work with. His foresight is exemplary. He also has the disposition and patience to work with the ever-changing variables involved in early stage technology ventures. I highly recommend him." - Jay Ward, CEO, 1stFriday.com, Inc.

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"The VMI Financial Roadmap platform developed by Anthony demands that you build a bottom-up revenue model. It politely forces you to do your due diligence, which places you in the best position possible to both fund and build a successful company. I especially like the feature that when we shift one data point, all others shift in concert. This saves time, and more importantly it combats entry errors that could prove costly. Our financial model is believable, and by getting it right from the start, I am now able to make quick adjustments for our management team and funding partners." - Rick Sutton, CEO, Plus 3 Network, Inc.

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"Anthony Nassar provides both strategic and detailed views of an effective financial plan, and describes multiple ways of approaching the financial planning process, depending on the needs of the company. In addition, he provides a set of considerations when planning to expose a financial plan to prospective investors... I have already used Anthony's model to develop a comprehensive financial plan." - Tom Kent, CEO, Sciformatix Corporation

How does the Bootcamp work?

The Bootcamp is limited to 5 startups. It is organized into 2 one-on-one sessions of up to 4 hours each, and 3 group sessions of 4 hours each.

Sessions #1 & #2: Building the Revenue Model – one-on-one

· Before Session #1, you will receive a questionnaire regarding your business and revenue model which you will need to complete.

· Anthony Nassar will then meet with you twice, one-on-one, to review your answers, clarify and complete the list of drivers in your revenue model.

· VMI will assist you in the development and completion of your revenue model, including modeling and formula coding.

Session #3: Building the Expense Model - group

· Before Session #3, you will receive a questionnaire regarding your staffing plan, expenses and capital expenditures and their drivers.

· You will then attend session #3, with the rest of the group, and work on completing the expense model with our guidance.

· If you’re not done by the end of Session #3 with the expense model, you’ll have access to unlimited e-mail, phone and screen share support between sessions, and the remaining sessions to continue receiving our assistance while working on your model towards completion.

Session #4: Integrating Data and Analyzing Results - group

· In session #4, you will integrate the various components of the model including revenues, staffing, consultants, space, capital expenditures, cost of revenues and operating expenses.

· You will then have the opportunity to enjoy the fruits of your labor and see the first draft of your projected profit & loss, balance sheet, cash flow statement and cash requirements for your planning horizon. This is one of the most rewarding moments of the financial modeling exercise as you are able to see the various components of the plan come together and the data move in concert as you make changes to the various assumptions.

· We will then review the results together so you can make appropriate adjustments to your model.

· If you’re not done by the end of Session #4 with the data integration and analysis, you’ll have access to unlimited e-mail, phone and screen share support before session #5 and up to 5 hours of e-mail, phone and screen share support after the completion of Session #5 to continue working on your model towards completion.

Session #5: Validating the Roadmap and Fine Tuning Assumptions - group

· In Session #5, you will look at certain financial ratios, and if available, financial data in industries comparable to yours, to validate the data in your model. You will continue working on adjusting your assumptions until you have a first version of your model that you are comfortable with.

You should clear at least 25 additional hours from your schedule to give your Roadmap the needed attention between sessions and make at time commitment of at least 50 hours to the Bootcamp including the 5 sessions.

As a Bootcamp participant, you will receive unlimited one-on-one phone support and screen share support between sessions, and up to 5 hours of one-on-one phone support and screen share support for up to 60 days after the completion of Session #5.

If you invest the necessary time and effort, complete the assignments and provide the information requested in the Bootcamp, we will help you develop the revenue model and code the formulas in the Roadmap so that, by the end of the Bootcamp, you not only have a revenue model, which is the most challenging component of your financial plan, but you will also have a powerful financial model you can use.

If you still need more help to complete your Financial Roadmap beyond the time and support provided within the Bootcamp, you will be able to purchase additional hours in minimum blocks of 5 hours priced at $875 for 5 hours.

How much does it cost?

The Bootcamp costs $2,995 per attending company, up to 3 participants per company. This is nearly 70% or $7,000 less than the average cost to develop custom Financial Roadmaps for our clients. The cost includes the VMI Financial Roadmap, which has an individual license price of $495.

When is the next Bootcamp?

The next Bootcamp will run during the month of February through March 31^st, 2009. Actual dates for the one-on-one sessions (sessions #1 and #2) will be scheduled with each bootcamper during the month of February. Dates for the group sessions (sessions #3, #4, and #5) will be scheduled in the month of March to accommodate the group's needs and will take place in San Jose, CA.

How do I sign up?

If you are interested in the Bootcamp or have questions about it, please call us at 415-897-0195 or email us at bootcamp@venturemomentum.com. We'll help you determine whether your startup is a good fit for the Bootcamp. Be prepared to provide us with an Executive Summary to help us make that determination.