99-
Financial projections need to come from the CEO.
But they cant just be "hit this number because I want it"
You need to understand your business well enough to build a 13 week cash model, and end the 13 weeks within 10% of projections.
To build a cashflow model:
List all revenue sources
Project revenue by channel each week
Then build all variable costs BY CHANNEL
Different cost to sell on amazon vs wholesale
Gotta include marketing as well
Now add in fixed costs
And supplier payments.
This needs to be full encompassing.
Interest, content, fees, etc.
A 100% snapshot of your business.
Build it.
We just ended the first run of 13 weeks...
I was within 2% of projections.
Get to know your business and own your cashflow.
98-
“Your equity is more valuable than anything, don’t raise, use debt”
“Your equity is worthless, until proven otherwise”
Both common pieces of advice when growing a business.
In the event of an exit, your equity is how you win. That’s your payday.
In any other case, your equity is worthless until you do a distribution/dividend
On the other hand, debt is the only way you go bankrupt. Owning someone money, that you don’t have, but they want, is what kills businesses.
This is a classic case of “it depends”
100% of zero is zero.
Not selling equity, and instead running your business off debt can lead to smaller outcomes, or no outcome.
On the flip side, selling equity sucks.
You can lose control of your business, you could end up being pushed to do things you don’t want, and worst case, you raise money with strings, and end up selling for $$$ but getting nothing.
The tip here is:
Million ways to play this game.
Million ways to win.
Blanket advice like “never raise” or “go do a round” is misguided.
Understand that most equity, 99% of all privately held shares, end up worthless.
And understand that debt is the only thing that can kill you.
I have seen great founders get great outcomes doing both