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  • This is not clickbait.

  • In this video, we are going to review the full financials of Slidebean for our most

  • important year: the year when we raised our first $250,000, the year when we grew our

  • subscriptions by 800%.

  • As much as we are open and transparent about many things, we can't release detailed financials

  • for our current company stage- but 2015 was a while ago, so we are OK with you digging

  • in through our numbers- I will be linking this spreadsheet in the video description.

  • We'd like you to pay close attention to: How a financial model looks.

  • How a startup distributes its expenses.

  • How much money is required to get a company off the ground.

  • A reality check, on the struggles you will have to endure as you start your first company.

  • Without further due, here's Startup Financial Model: Slidebean's 2015 financials.

  • Just in case you are new here, I co-founded Slidebean with these guys back in 2013.

  • Slidebean is a pitch deck platform for startups.

  • We have an AI design platform that designs your slides for you, or if you are looking

  • for more advanced, human help, we can also get involved in writing the slides for your

  • deck.

  • Alright, so we got together, bought the slidebean.com domain on May 2013 and started working on

  • the platform.

  • We held part-time jobs and managed other projects between 2013 and 2014 to pay our bills.

  • In 2014 we got accepted in Startup Chile, an accelerator in Santiago that gave us $35,000

  • and allowed us to dedicate all of our time to the platform.

  • Later that year, we also went to Dreamit Ventures, an accelerator in NYC.

  • We leveraged the Dreamit Network heavily to get into investor conversations.

  • The presence in New York was also crucial towards getting the launch of the platform

  • covered by the startup press...

  • Finally, we joined 500 Startups in the winter of 2014, raised $75,000 from them and closed

  • an additional $250,000 from a mix of investors in New York and San Jose.

  • Our financials at that time were... complex, and indeed not well documented.

  • Some money came from consulting projects we took, which were unrelated to Slidebean, so

  • it's not necessarily a great example for you.

  • If you haven't done so, you should look into our founder's agreement video, to get an idea

  • of how to manage money at such an early stage.

  • But again, by February 2015, we had money in the bank, and we could start spending more

  • aggressively- so here's the breakdown.

  • We started the year with $1,178 in subscriptions, and we closed it with $16,197.

  • We generated a total of $113,535 in revenue and spent $313,685.

  • Yeah, that's why startups raise money, because turning a profit your first year is hard.

  • Before we dig deeper into the document, let me explain briefly how a startup financial or any business financial

  • model works.

  • A financial model is usually split into SG&A (Selling, General, and Administrative Expenses),

  • COGS (Cost of Goods Sold), Revenue, and CAPEX (Capital Expenditure).

  • In our case, COGS: holds all of our server costs essential

  • to the business.

  • This includes AWS as well as any other platform or tool that the Slidebean platform needs

  • to operate correctly.

  • CAPEX: we use mostly for equipment: office furnishing and computers.

  • When you buy a company laptop, you are not spending the money but putting it into an

  • asset, so for financial purposes, this works somewhat differently.

  • There's depreciation and a few other things that get calculated here.

  • SG&A has all of the other expenses, including team, marketing costs, rent, insurance, and

  • services the organization needs to execute its tasks.

  • Finally, the Revenue sheet not only has our final revenue metrics for the month but our

  • financial projections.

  • We have iterated over different formulas to calculate our future revenue.

  • As a SaaS business, we can somewhat accurately predict how much renewal revenue we are going to make

  • on a given month, based on historical retention rates or churn.

  • For future months we estimate our revenue based on that and on our marketing spend.

  • We have a formula that estimates the dollars earned in revenue per dollar spent in marketing,

  • including team, ads and so on... if on the SG&A sheet we scale the marketing budget,

  • we see that reflected in the future estimated revenue.

  • This formula assumes, of course, that you can scale your marketing budget with the same

  • efficiency.

  • It would be a bold statement to say that you can triple your spend in marketing and see that reflected

  • in your revenue proportionally- but you can make small, percentual monthly increases while adding a variable

  • to predict that more spend will be less efficient.

  • Or your cost of acquisition will go higher.

  • Another formula we use is the support staff required depending on the number of customers.

  • You can estimate that you will need to hire a new support person for every 1,000 new active

  • customers you have on the platform.

  • So as your subscriber base scales (based on your predicted increase in marketing spend)

  • so will your estimate expenses to support that user base.

  • You can apply a similar formula to server costs and other platforms and all the stuff in the financial model.

  • Calculating all this is rather complex, and every business will need a different formula,

  • but estimating this correctly will allow you to spend your budget more efficiently.

  • Knowing what will happen or being able to estimate it accurately, in the next few months lets you choose when and how to scale your

  • team and your growth efforts without endangering the company.

  • Now, back to our own financials.

  • We closed $170,000 of funding in February 2015.

  • Thanks to the fact this was a convertible note (go watch our video in convertible notes), we collected the first $170,000 in February

  • and an additional $80,000 in May.

  • Yes, at this point I had never seen so much money on a bank account I had access to.

  • Let's start with SG&A.

  • We spent around $146,000 in payroll that year;

  • which includes wages and payroll taxes.

  • Founder salaries were close to $93,000 for the year.

  • You can quickly guess that we allocated about $2,500/mo per founder, or around $30,000/yr.

  • Figuring out founder salaries is hard, and negotiating them with your investors is hard

  • as well.

  • The wage of a founder needs to be enough, so you don't have to spend time worrying about

  • your salary.

  • It's also important to understand that this should be good enough to get by, but not to

  • save money.

  • Your 'savings' as a founder are the stock you own in the company, and it increases in

  • value based on the effort you put in.

  • During this time we were partially based in Costa Rica and partly based in California

  • and New York (we were exiting the 500 Startups accelerator).

  • If it works as a reference, the minimum wage in Costa Rica at that time was around $700/mo.

  • Whenever we had to spend time in expensive cities, we had a small adjustment to cover

  • the extra cost of staying in the city.

  • Being based in Costa Rica has been, by far, one of the core reasons for our success.

  • We have been able to attract great talent at a fraction of the cost of hosting those

  • teams in the US.

  • They are not an outsourced or remote team, but fully embedded in our company culture

  • thanks to our local office.

  • It was only until late 2015 when we were able to scale our organization.

  • Our logic behind this was that we wanted to prove our ability to scale our user base,

  • and we did.

  • Once we projected good revenue for the months to come, we allowed ourselves to hire new

  • team members.

  • If you look at the financial model doc, you'll also find team members that made more money

  • than me.

  • That is totally fine at this stage.

  • You, founder, are betting it all on this company to grow and you have the upside of being a

  • majority shareholder.

  • If you want to attract talented people, you are going to have to pay them market salaries.

  • We spent about $83,000 on paid marketing, plus an additional $4,000 on platforms or

  • tools directly related to marketing.

  • We separate those tools from the rest of the services we use to calculate a full cost of

  • acquisition for the month.

  • While we track the effectiveness of each campaign individually, it's essential to know the average

  • cost of a lead and a customer, taking into account everything from the ad cost, to the

  • team executing the ads and the tools they used to work.

  • Not a lot to add there, you'll find pretty standard business expenses.

  • You'll see some legal costs in the model, mostly related to the documents needed to

  • close the round.

  • Equipment is another highlight worth mentioning.

  • We, founders, had to upgrade our laptops in the process, and spending $2,500 on a new

  • MacBook Pro was an unjustified company expense when we could have gotten along with a cheaper

  • version.

  • So the company bought the laptops, but we paid the company back in monthly installments.

  • If you are an e-commerce platform, the cost of the things you sell would be calculated here.

  • Since we are a software platform, we only include server costs, which allows us to calculate

  • a gross margin for the cost of running the platform vs the revenue we get.

  • This is not a real gross margin since the platform also needs human beings to operate, to provide

  • support, and so on... but you can calculate an adjusted margin if you include the cost

  • of the support team and the marketing costs.

  • You'll find a lot of KPIs on this sheet, most of them are quite specific to SaaS, or are

  • used as part of our formula to estimate revenue.

  • A lot of this data comes from ChartMogul or from Baremetrics- so Excel is mostly for monitoring

  • and a future revenue prediction tool. Some points worth mentioning:

  • Days in the month: when you are making $5,000 a day, it makes a difference if the month

  • has 30 or 31 days- or you know, 28.

  • Another useful metrics is the 3, 6, and 12-month trends, which are another good way to determine how things are moving forward

  • and to implement those numbers in your future projections.

  • Alright- once again, you can download our 2015 financial model on the link in the description.

  • As always, if you are one of the first 25 people to sign up to the platform,

  • you will get 3 months free on Slidebean on any plan.

  • Finally, a new feature is: we are going to be holding weekly live sessions answering the questions that we're getting through the week.

  • Subscribe. Leave any other questions you have in the comments and we'll see you next week.

This is not clickbait.

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スタートアップの財務モデル例。スレ主(実績)の収益と費用 (Startup Financial Model example: Slidebean (actual) earnings and expenses)

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    吉川友章 に公開 2021 年 01 月 14 日
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