accounting

🤔The Truth of a Startups Financial Forecast

🤔The Truth of a Startups Financial Forecast

Shawn Flynn 0:01

We have the founder of strategic CFO Ed guidance here today at guys worked with early stage companies. He's been in Silicon Valley for a number of years, helping them get ready to either be acquired, raise financing, or just get to the next step. So you're in for a treat today on Silicon Valley successes.

Show Announcer 0:25

Welcome to Silicon Valley successes, we interview experts and entrepreneurs to give the world access to the knowledge and experience that is here in Silicon Valley. Our mission is to create opportunities for those who seek them and tell you to become the next Silicon Valley success.

Shawn Flynn 0:47

Ed, welcome to Silicon Valley successes. Could you please give an introduction to yourself for everyone at home?

Ed Gines 0:53

Absolutely. I met guys, strategic CEOs have staff here domestically, us as well as in internationally over in the Philippines. Interesting. Yeah, two areas, we concentrate on the CFO component of the business, and then our staff is more of the accounting services that nuts and bolts of the business.

Shawn Flynn 1:11

Wow. So Ed, quick question for you. I just want to go right into it.

When a company comes to you. Yeah. What are their normal problems? An early stage company, they say, Okay, I need help. I'm going to contact Ed, what's going on?

Ed Gines 1:26

Well, I seen this as like the three C's, its compliance, cash flow and clarity, clarity, meaning the financial statements, oftentimes you can you read it, and you go, What is this, an investor needs a little bit more than just saying, What is this? They need the financials to read a story, okay, part two cash flow, right?

What's our burn rate? For goodness sakes? Okay, so I'm sorry? What's a burn rate? Well, how much cash Are you guys going through on a monthly basis? And when are you going to run out of cash, okay, because you better get your next round of funding done sooner rather than later and prep for it. So if your burn rate is hundred thousand dollars, you better have 800,000, if you know, an eight months you're done, right? Yeah, it's that simple.

Shawn Flynn 2:15

So if I have 800,000 left in the bank

once, should I really start thinking about raising more money than in my burn rate is 100,000 a month, two months from now

Ed Gines 2:26

to what's the latest six months Get ready, because it takes a while to to get funding because you're beyond fan of friends and family at that point. Okay, now you've got your, your series A, your angel, it just there's a number of procedures that have to take place. And just kind of going back to those three C's, the compliance part another part of the business that can really knock the business so is compliance, which is government filings,

Shawn Flynn 2:53

okay. We all are a silencer people making their then I mean, everyone knows what, March or may sometime there, you're supposed to file something,

Ed Gines 3:02

got to do a little prep work in order to get the mean, the filings of the corporate returns and the extensions, that's what you're referencing, right. But not only that, I mean, you've got sales tax out there, depending on the type of product. Okay, I know there's SAS companies out there, how we're recognizing the revenue so that if you're even generating revenue, right, in terms of on the SAS companies, are you amortized

a little what, right? Yes,