29 9 月 Financial Startup Basics

Fundamentals of financial startup are the ones that startups must be aware of to ensure their financial stability and to secure the funding they require to grow. Nine out of ten failures in startups are caused by the absence of these fundamentals. Cash flow is the reason. Without understanding how to track and project cash flow, a startup will not be able to manage its budget or invest in growth.

Investors should have access to your startup’s financial projections as well as income statements. These models must be carefully calculated to accurately reflect your company’s true economics which includes easy to overlook costs like taxes, shipping, insurance, payment processing fees, and utility charges.

If traditional lenders aren’t available, family and friends can lend money to startups in the early stages. In this situation, however, it is important to have any terms of the loan written down to ensure there are no conflicts regarding repayment obligations or future performance expectations.

Startups can also look for venture capital from a private investor or even crowdfunding platforms such as Kickstarter. However, these types of financing often require an approved business plan that includes a comprehensive financial model. A model can help you to better understand the financials of your business, allowing you to make informed decisions about the amount of capital you need and what strategic goals you’d like to meet by next year.

www.startuphand.org/2023/04/30/the-different-stages-of-funding-in-venture-capital