All articles by The Startup Station
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November 19, 2023
Top Five Challenges Female Founders Face and How to Overcome Them
In its recent report, S&P Global analyzed earnings and share price data of U.S. -based companies between 2002 and May 2019, following 5,825 new executive appointments for roles of CEO and CFO. About 10% of those appointments were women.
The data showed that …
November 19, 2023
WACC vs Investors’ Return
The difference between WACC, or Weighted Average Cost of Capital, and the investors’ return confuses many entrepreneurs, especially those with very little finance knowledge. Both are important valuation concepts and will definitely come up in your fundraising process. In this article and the corresponding video, we will learn what they are, how they differ from each other, and how to calculate them.
November 19, 2023
Working Capital – Why Does it Matter?
The cash flow issue is obvious – we all know that we need cash to run a company. But what exactly is working capital and why does it matter?
Let’s start with the definition: working capital is the capital required to run a company day-to-day.
November 5, 2023
A Financial Model Is a Map, Not a Crystal Ball
There is a lot of misconception in the startup community about what a startup financial model represents and, especially, how accurate it is. When I discuss the importance of financial analysis with entrepreneurs, they push back arguing that there is no validity to the numbers not verified by the market.
November 1, 2023
Three Reasons Why a Startup Can Run Out of Money
When we think about startup financial issues, we usually refer to funding. However, instead of focusing on funding, which is the outcome, we suggest to focus on the underlying reason which causes a startup to run out of money prematurely. That reason is improper budgeting.
October 19, 2023
Three Reasons Why Entrepreneurs Fail to Secure Funding
Fundraising is a daunting challenge, even for the best finance professionals, and downright scary for startup founders with no finance experience. According to Fundable and Entrepreneur, 565,000 startups are launched every year and just under 3% receive angel and VC investments. Entrepreneur identifies three main reasons startup founders fail to secure funding that we further address in this article and the corresponding video.
October 19, 2023
What Drives Startup Valuations?
There is a lot of confusion around what startup valuations are really based on.
To start off, let’s understand what they ARE NOT based on:
Numbers taken from the sky, or unjustified projections
Wishful thinking
Desired percent of equity that you “think” you should give away
To drive the point home, you can’t just say: “I think I am going to generate $1M in Year 1, $5M in Year 2, $25M in Year 3, $50M in Year 4, and $100M in Year 5”, just because those numbers seem reasonable, and even if other startups have similar projections.
October 19, 2023
How to Estimate Demand for Early Stage Startups?
If you are a founder in the process of creating financial projections for your pre-revenue company for the first time, most likely you have two thoughts.
Thought # 1: “This is hard”, and
Thought # 2: “This is futile because, without any data, I can only guess what my sales would be!”
Well, you are HALF right.
October 19, 2023
Overview of Cash Startup Costs
As a startup founder, you have to become familiar with basic accounting concepts. In this article and the corresponding video, we discuss how to categorize various cash expenses from your Income, or Profit & Loss, Statement properly.
October 18, 2023
Which Risks are Worth Taking?
All entrepreneurs are risk-takers. If you are uncomfortable with taking risks, entrepreneurship is most definitely not for you. But does that mean you should take every risk you can?
In this article, we discuss how to evaluate which risks are worth taking.
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