1. Financial Projections & Funding Frank Moyes Leeds College of Business University of Colorado Boulder, Colorado Frank Moyes1

2. Agenda Quiz Financial Projections Funding Investor Presentations Frank Moyes 2 What is the V-word?

3. Financial Projections Focus Profitability & Cash Flow Frank Moyes 3

4. Profitability = Revenue – Expenses Financial Viability Income Statement Frank Moyes 4

5. Operating Income Statement Year 1 Revenues$100,000 Cost of Revenues60,000 Gross Profit40,000 % Gross Profit40% Operating Expenses Sales & Marketing15,000 Development5,000 Administrative10,000 Total30,000 Operating Income$10,000 Frank Moyes 5

6. Focus on Revenue Model How many widgets, customers, transactions At what price Gross Profit Margins Price vs. Cost to produce Expressed as a % Operating Expense Frank Moyes 6

7. Cash Flow Profitability Working Capital Equipment Or Cash In vs. Cash Out Cash Flow Frank Moyes 7

8. Tools Financial Models of Income Statements and Cash Flow Simple Income Statement Most Common Frank Moyes 8

9. Funding Types & Sources Pros & Cons Frank Moyes 9

10. Types of Funding Equity Debt Grants Frank Moyes 10

11. Equity Sell ownership in your company Advantage - permanent capital May lose control (dilution) Responsibilities to investor – requires return Frank Moyes 11

12. Debt Loan for a set period & interest rate Source – banks, SBA, Guido No dilution Must pay back + interest Start-ups can’t get Vulnerable when things go south Frank Moyes 12

13. Grants Federal SBIR, CREDA Research – university & corps. State, regional and municipal development agencies Foundations freemoney.com No equity or debt Red tape and strings Grant mentality Frank Moyes13

14. Sources of Funding Venture capital Angels Banks Friends & family Best? Use Own Resources to First Prove the Concept Frank Moyes 14

15. Investor Presentations Importance of introduction Opportunity/Need Solution Target Customer Sustainable Competitive Advantage Financial Viability Management Frank Moyes 15