Sprint Assignment 10: Financing, Budgeting & Cap Table (29.03.2021)

Budget and Cap Table

Create a cash flow budget and cap table for your team. Please keep in mind the following when drafting your cashflow budget:

1) Estimate how long it will take for you to bring your MVP to a customer and start generating revenue.

2) Estimate revenue growth through the first 12 months. (For example, the number of customers x purchase price, based on estimates of customer base growth month on month.)

3) Calculate minimum expenses to get to revenue, including fixed expenses (salaries, salary expenses, office space) and liquid expenses (marketing, manufacturing, travel etc.).

4) Find out about potential grants from Business Finland, TE-Keskus and other authorities and foundations in Finland. Google “startup grants Finland” for more info. Add realistic grant opportunities to your budget.

5) Fill in the rest of the income needs by estimating investment opportunities (FFF, angel, seed) and possible bank loans depending on your teams’ capabilities and collateral.

Please keep in mind the following when drafting your cap table:

1) Create enough shares to be able to accommodate future owners (investors, advisors, employees etc.).

2) Split initial shares among founders based on your discussion. Full time/part-time / investor/advisor status should be reflected in ownership.

3) If you have an estimated need for investors in your budgeting, add realistic shares for each investor and the type of shares.

4) Create a sufficiently large Employee Stock Option Pool (ESOP) to incentivize future employees.  

Don't forget to have sufficiently ambitious targets to be able to attract investors and other forms of external funding. The key is to balance your targets so that they are ambitious enough to warrant startup-level growth, yet realistic enough you can actually attain them.

The exercise will be graded based on the realism of your assumptions and the coherence of the information you have provided for the budget and the cap table. In other words, if you have full time and part-time founders, this should be reflected in salaries, or if you have budgeted investment funds, this should be reflected in the cap table, etc.

Please submit with this naming format: Group No._Assignment