I hope this exercise has helped you determine if your business is an attractive investment opportunity and whether you should go ahead and raise a round of capital. Now that you know what it takes to raise funds, the next is to create a business plan and prepare your investor pitch. This is precisely what we will help you with in our next course on how to create pitch decks. We look forward to seeing you soon. We will take you through the funding matrix to help you evaluate your funding readiness. The funding matrix has eight building blocks. We will see each one of them. The first block is the team block. In case of early stage ventures, the investor primarily bets on the jockey. The horse is the product and the founder is the jockey. Business models will pivot. Markets will go through a change. Products will undergo several iterations. What stays in the core founding team. Evaluating the founding team becomes extremely important for the investors. The execution ability of the founders coupled with relevance will be important for the investors. The execution ability of the founders coupled with relevant experience is very critical. Building a core team with complementary skill sets should be our priority. Example, let's take option one. There are three founders, all engineers, all experts in product development. Option two, three founders, one with a solid background in product development, second with expertise in sales, and third with experience in operations and finance. Which option would you choose? Obviously, it is option two. Pause the video here and find out. Fill the first building blocks by putting down the details of your core team, their experience and their background. The second block is scalable business model. VCs look for scalable business models. What do we mean by that? We need to look at the term scalability from the lens of capital. Suppose to make revenue of 50 lakhs, you had to invest 10 lakhs in the capital. As time passes, you should be able to make a revenue of 1 crore for the same capital investment. Let's look at an example. Consider the business of shopping malls. To create a mall, you will have to lease land, physically construct the mall, and attract tenants. All of this requires, say, 10 crores of investment. After a couple of years, the mall starts making an annual revenue of 100 crores. As the owner of the mall business, if you have to double your revenue to 200 crores, what will you have to do? Simple. You will need to go through the entire cycle of leasing land, constructing infrastructure, etc. Which will take you to the next step. You will require another 10 crores of capital infusion. For every 100 crores of incremental revenue, you will require a capital infusion of 10 crores. As per VCs, this traditional malls business is not a scalable business. Now consider e-commerce. By building an online platform and forming partnerships with brands, logistic service providers, and warehouses, you can service the entire country, or rather the entire world. E-commerce was a darling of VCs. Because of the scalability angle.


Now that you know what it takes to raise funds, the next is to create a business plan and prepare your investor pitch. This is precisely what we will help you with in our next course on how to create pitch decks. We look forward to seeing you soon. We will take you through the funding matrix to help you evaluate your funding readiness. The funding matrix has eight building blocks. We will see each one of them. The first block is the team block. In case of early stage ventures, the investor primarily bets on the jockey. The horse is the product and the founder is the jockey. Business models will pivot. Markets will go through a change. Products will undergo several iterations. What stays in the core founding team. Evaluating the founding team becomes extremely important for the investors. The execution ability of the founders coupled with relevance will be important for the investors. The execution ability of the founders coupled with relevant experience is very critical. Building a core team with complementary skill sets should be our priority. Example, let's take option one. There are three founders, all engineers, all experts in product development. Option two, three founders, one with a solid background in product development, second with expertise in sales, and third with experience in operations and finance. Which option would you choose? Obviously, it is option two. Pause the video here and find out. Fill the first building blocks by putting down the details of your core team, their experience and their background. The second block is scalable business model. VCs look for scalable business models. What do we mean by that? We need to look at the term scalability from the lens of capital. Suppose to make revenue of 50 lakhs, you had to invest 10 lakhs in the capital. As time passes, you should be able to make a revenue of 1 crore for the same capital investment. Let's look at an example. Consider the business of shopping malls. To create a mall, you will have to lease land, physically construct the mall, and attract tenants. All of this requires, say, 10 crores of investment. After a couple of years, the mall starts making an annual revenue of 100 crores. As the owner of the mall business, if you have to double your revenue to 200 crores, what will you have to do? Simple. You will need to go through the entire cycle of leasing land, constructing infrastructure, etc. Which will take you to the next step. You will require another 10 crores of capital infusion. For every 100 crores of incremental revenue, you will require a capital infusion of 10 crores. As per VCs, this traditional malls business is not a scalable business. Now consider e-commerce. By building an online platform and forming partnerships with brands, logistic service providers, and warehouses, you can service the entire country, or rather the entire world. E-commerce was a darling of VCs. Because of the scalability angle. Pure tech or tech-enabled business models play a pivotal role in making your business scalable. Is your business scalable? You can pause the video here and write down core elements of your venture that makes it scalable.


The second block is scalable business model. VCs look for scalable business models. What do we mean by that? We need to look at the term scalability from the lens of capital. Suppose to make revenue of 50 lakhs, you had to invest 10 lakhs in the capital. As time passes, you should be able to make a revenue of 1 crore for the same capital investment. Let's look at an example. Consider the business of shopping malls. To create a mall, you will have to lease land, physically construct the mall, and attract tenants. All of this requires, say, 10 crores of investment. After a couple of years, the mall starts making an annual revenue of 100 crores. As the owner of the mall business, if you have to double your revenue to 200 crores, what will you have to do? Simple. You will need to go through the entire cycle of leasing land, constructing infrastructure, etc. Which will take you to the next step. You will require another 10 crores of capital infusion. For every 100 crores of incremental revenue, you will require a capital infusion of 10 crores. As per VCs, this traditional malls business is not a scalable business. Now consider e-commerce. By building an online platform and forming partnerships with brands, logistic service providers, and warehouses, you can service the entire country, or rather the entire world. E-commerce was a darling of VCs. Because of the scalability angle. Pure tech or tech-enabled business models play a pivotal role in making your business scalable. Is your business scalable? You can pause the video here and write down core elements of your venture that makes it scalable. The next building block is value proposition.


Pure tech or tech-enabled business models play a pivotal role in making your business scalable. Is your business scalable? You can pause the video here and write down core elements of your venture that makes it scalable. The next building block is value proposition. Value proposition is just a fancy term used to define the end benefit of the product or the service that you are offering to your customer. What is the customer pain point that you are solving and how severe is the pain point? Consider the nationwide lockdown during the pandemic. None of us could move and make it to office. Thanks to Zoom, we were able to continue working remotely from home and meet people. Zoom addressed the pain point of not being able to step out and yet meet our team members within the safety of our homes. VCs generally prefer business models which are solving large problems and severe pain points of customers. Pause the video here and write down the pain points that you are solving for your customer segment and the value that you are offering to them.


The next building block is value proposition. Value proposition is just a fancy term used to define the end benefit of the product or the service that you are offering to your customer. What is the customer pain point that you are solving and how severe is the pain point? Consider the nationwide lockdown during the pandemic. None of us could move and make it to office. Thanks to Zoom, we were able to continue working remotely from home and meet people. Zoom addressed the pain point of not being able to step out and yet meet our team members within the safety of our homes. VCs generally prefer business models which are solving large problems and severe pain points of customers. Pause the video here and write down the pain points that you are solving for your customer segment and the value that you are offering to them. The next building block is the proof-of-concept block. Ideas don't fetch you funding. Execution does. Ideas translate into products. Products translate into businesses with revenue. Investors want to see if your product has found customer validation and traction. Investors do not invest on the basis of an idea or a paper plan. Without proof-of-concept, the probability of funding is very, very low.


Value proposition is just a fancy term used to define the end benefit of the product or the service that you are offering to your customer. What is the customer pain point that you are solving and how severe is the pain point? Consider the nationwide lockdown during the pandemic. None of us could move and make it to office. Thanks to Zoom, we were able to continue working remotely from home and meet people. Zoom addressed the pain point of not being able to step out and yet meet our team members within the safety of our homes. VCs generally prefer business models which are solving large problems and severe pain points of customers. Pause the video here and write down the pain points that you are solving for your customer segment and the value that you are offering to them. The next building block is the proof-of-concept block. Ideas don't fetch you funding. Execution does. Ideas translate into products. Products translate into businesses with revenue. Investors want to see if your product has found customer validation and traction. Investors do not invest on the basis of an idea or a paper plan. Without proof-of-concept, the probability of funding is very, very low. Even Flipkart did not raise its first funding round without some traction. Flipkart first chose to sell books online and test if Indian customers were buying books online. Only after testing the success of e-commerce model for books did Flipkart raise its first round of capital in 2008 from a prominent VC. The proof-of-concept blog focuses on the key metrics that define your traction. Pause the video here and fill the box with key metrics and traction that you have gained against those metrics.


The next building block is the proof-of-concept block. Ideas don't fetch you funding. Execution does. Ideas translate into products. Products translate into businesses with revenue. Investors want to see if your product has found customer validation and traction. Investors do not invest on the basis of an idea or a paper plan. Without proof-of-concept, the probability of funding is very, very low. Even Flipkart did not raise its first funding round without some traction. Flipkart first chose to sell books online and test if Indian customers were buying books online. Only after testing the success of e-commerce model for books did Flipkart raise its first round of capital in 2008 from a prominent VC. The proof-of-concept blog focuses on the key metrics that define your traction. Pause the video here and fill the box with key metrics and traction that you have gained against those metrics. We will now look at the next block, the monetization model.


Even Flipkart did not raise its first funding round without some traction. Flipkart first chose to sell books online and test if Indian customers were buying books online. Only after testing the success of e-commerce model for books did Flipkart raise its first round of capital in 2008 from a prominent VC. The proof-of-concept blog focuses on the key metrics that define your traction. Pause the video here and fill the box with key metrics and traction that you have gained against those metrics. We will now look at the next block, the monetization model. How will your business make money? Do you sell subscriptions or do you charge a commission? What is your revenue model? Along with this, unit economics is also on investors' radar. What are the margins that you are making on every unit of sale? Pause the video here and fill in the details of your monetization model.


We will now look at the next block, the monetization model. How will your business make money? Do you sell subscriptions or do you charge a commission? What is your revenue model? Along with this, unit economics is also on investors' radar. What are the margins that you are making on every unit of sale? Pause the video here and fill in the details of your monetization model. Moving on to the next building block, which is the market size. There are so many pitch decks that claim a 5 billion or a 10 billion market size. But where do these figures come from? You obviously need to justify these figures.


How will your business make money? Do you sell subscriptions or do you charge a commission? What is your revenue model? Along with this, unit economics is also on investors' radar. What are the margins that you are making on every unit of sale? Pause the video here and fill in the details of your monetization model. Moving on to the next building block, which is the market size. There are so many pitch decks that claim a 5 billion or a 10 billion market size. But where do these figures come from? You obviously need to justify these figures. How do you go about calculating the market size, especially for a business model which are relatively new and where no consulting firm has yet published any report? Let's take the case of the freight company. The freight company can be considered as the make-my-trip for booking trucks for shipment of goods.


Moving on to the next building block, which is the market size. There are so many pitch decks that claim a 5 billion or a 10 billion market size. But where do these figures come from? You obviously need to justify these figures. How do you go about calculating the market size, especially for a business model which are relatively new and where no consulting firm has yet published any report? Let's take the case of the freight company. The freight company can be considered as the make-my-trip for booking trucks for shipment of goods. The logic for calculation of market size for this business is very very interesting.


How do you go about calculating the market size, especially for a business model which are relatively new and where no consulting firm has yet published any report? Let's take the case of the freight company. The freight company can be considered as the make-my-trip for booking trucks for shipment of goods. The logic for calculation of market size for this business is very very interesting. There are 50 lakh trucks in the country and these trucks are doing 12 crore truck trips annually. Now let's assume that the average cost of hiring a truck is Rs. 30,000. The freight company earns a commission of 2% which is Rs. 600 on every successful trip. Imagine if all the truck trips in the country are booked on the freight company platform, then the total annual revenue pool opportunity will be somewhere around Rs. 7,200 crores.


The logic for calculation of market size for this business is very very interesting. There are 50 lakh trucks in the country and these trucks are doing 12 crore truck trips annually. Now let's assume that the average cost of hiring a truck is Rs. 30,000. The freight company earns a commission of 2% which is Rs. 600 on every successful trip. Imagine if all the truck trips in the country are booked on the freight company platform, then the total annual revenue pool opportunity will be somewhere around Rs. 7,200 crores. Can the company take 10% of the market share? If it does, it will be a 720 crore top-line company.


There are 50 lakh trucks in the country and these trucks are doing 12 crore truck trips annually. Now let's assume that the average cost of hiring a truck is Rs. 30,000. The freight company earns a commission of 2% which is Rs. 600 on every successful trip. Imagine if all the truck trips in the country are booked on the freight company platform, then the total annual revenue pool opportunity will be somewhere around Rs. 7,200 crores. Can the company take 10% of the market share? If it does, it will be a 720 crore top-line company. Why is market size so important for investors? Because a small market would mean potential to create a small business. The larger the market, the bigger can the business be.


Can the company take 10% of the market share? If it does, it will be a 720 crore top-line company. Why is market size so important for investors? Because a small market would mean potential to create a small business. The larger the market, the bigger can the business be. Pause the video here, think of the logic for calculating market size for your business and put the logic along with the numbers in the block.


Why is market size so important for investors? Because a small market would mean potential to create a small business. The larger the market, the bigger can the business be. Pause the video here, think of the logic for calculating market size for your business and put the logic along with the numbers in the block. Modes. The most difficult block on the matrix is the modes block. How difficult it is for a group of engineers to create a food delivery app. It can be done within months. But what is difficult is creating the network effects and scale that Zomato has achieved today. Smaller startups end up losing to the incumbents. Investors fear backing startups that are operating in a sector where there are large players backed by deep-pocketed investors. Modes are nothing but your competitive edge that prevents your competitors from displacing you completely. It can be your technology, your scale, etc. Pause the video here and fill in your modes block. If you currently don't have any, it is perfectly okay to keep the box blank.


Pause the video here, think of the logic for calculating market size for your business and put the logic along with the numbers in the block. Modes. The most difficult block on the matrix is the modes block. How difficult it is for a group of engineers to create a food delivery app. It can be done within months. But what is difficult is creating the network effects and scale that Zomato has achieved today. Smaller startups end up losing to the incumbents. Investors fear backing startups that are operating in a sector where there are large players backed by deep-pocketed investors. Modes are nothing but your competitive edge that prevents your competitors from displacing you completely. It can be your technology, your scale, etc. Pause the video here and fill in your modes block. If you currently don't have any, it is perfectly okay to keep the box blank. Now, the last block, exit. Why do investors invest in a business? Returns. And returns can be a reality only if there is a profitable exit. During your pitch, be prepared for this question from investors. How will you give us an exit? Your first investor can get an exit in subsequent rounds of funding. Maybe your business model can become a great fitment for a large strategic player who can eventually acquire you. Of course, you can reach a massive scale and take your company public. From an exit perspective, while things might not turn out exactly the way you have planned, it is still important to be prepared to answer this question. How will you give us an exit? Pause the video here and fill in your exit block. The funding matrix is now complete.


Modes. The most difficult block on the matrix is the modes block. How difficult it is for a group of engineers to create a food delivery app. It can be done within months. But what is difficult is creating the network effects and scale that Zomato has achieved today. Smaller startups end up losing to the incumbents. Investors fear backing startups that are operating in a sector where there are large players backed by deep-pocketed investors. Modes are nothing but your competitive edge that prevents your competitors from displacing you completely. It can be your technology, your scale, etc. Pause the video here and fill in your modes block. If you currently don't have any, it is perfectly okay to keep the box blank. Now, the last block, exit. Why do investors invest in a business? Returns. And returns can be a reality only if there is a profitable exit. During your pitch, be prepared for this question from investors. How will you give us an exit? Your first investor can get an exit in subsequent rounds of funding. Maybe your business model can become a great fitment for a large strategic player who can eventually acquire you. Of course, you can reach a massive scale and take your company public. From an exit perspective, while things might not turn out exactly the way you have planned, it is still important to be prepared to answer this question. How will you give us an exit? Pause the video here and fill in your exit block. The funding matrix is now complete. You must be planning to present to the investors your future plans of developing product, hiring a team and spending on marketing.


Now, the last block, exit. Why do investors invest in a business? Returns. And returns can be a reality only if there is a profitable exit. During your pitch, be prepared for this question from investors. How will you give us an exit? Your first investor can get an exit in subsequent rounds of funding. Maybe your business model can become a great fitment for a large strategic player who can eventually acquire you. Of course, you can reach a massive scale and take your company public. From an exit perspective, while things might not turn out exactly the way you have planned, it is still important to be prepared to answer this question. How will you give us an exit? Pause the video here and fill in your exit block. The funding matrix is now complete. You must be planning to present to the investors your future plans of developing product, hiring a team and spending on marketing. all your plans should be finally converted into revenue that you will make in the coming years and the costs that you will incur. Financial modeling is the process of converting your future plans into financial numbers like revenue and cost.


You must be planning to present to the investors your future plans of developing product, hiring a team and spending on marketing. all your plans should be finally converted into revenue that you will make in the coming years and the costs that you will incur. Financial modeling is the process of converting your future plans into financial numbers like revenue and cost. Obviously, nobody can predict numbers with 100% accuracy. However, projections do give a sense of where the entrepreneur wants to take the business in future. On what basis do we project future revenues and costs? We do it on the basis of assumptions that we try to validate based on historical data or by benchmarking.


all your plans should be finally converted into revenue that you will make in the coming years and the costs that you will incur. Financial modeling is the process of converting your future plans into financial numbers like revenue and cost. Obviously, nobody can predict numbers with 100% accuracy. However, projections do give a sense of where the entrepreneur wants to take the business in future. On what basis do we project future revenues and costs? We do it on the basis of assumptions that we try to validate based on historical data or by benchmarking. During this session, you will be able to create a quick model that plots your revenue, costs, and funding amount. Let's start by forecasting the revenue.


Obviously, nobody can predict numbers with 100% accuracy. However, projections do give a sense of where the entrepreneur wants to take the business in future. On what basis do we project future revenues and costs? We do it on the basis of assumptions that we try to validate based on historical data or by benchmarking. During this session, you will be able to create a quick model that plots your revenue, costs, and funding amount. Let's start by forecasting the revenue. Let's start by forecasting the revenue. To forecast the revenue, we will have to find answers to a few questions such as how do you acquire your customers, what is the average price of the service or the product that you are selling, and what does your customer conversion funnel look like. We will now think through our revenue model. Let's consider that you market your business online. Your target audience sees your ads on Google or Facebook and are diverted to your website. From there, a certain percentage of visitors get converted into buyers and they spend a certain average amount on your product or service. This is the customer conversion funnel. To start forecasting, first look at your historical data. How many people visited your website in the last three months and what percentage of them converted into buyers? How many were repeat buyers and on an average, how much did each customer spend?


During this session, you will be able to create a quick model that plots your revenue, costs, and funding amount. Let's start by forecasting the revenue. Let's start by forecasting the revenue. To forecast the revenue, we will have to find answers to a few questions such as how do you acquire your customers, what is the average price of the service or the product that you are selling, and what does your customer conversion funnel look like. We will now think through our revenue model. Let's consider that you market your business online. Your target audience sees your ads on Google or Facebook and are diverted to your website. From there, a certain percentage of visitors get converted into buyers and they spend a certain average amount on your product or service. This is the customer conversion funnel. To start forecasting, first look at your historical data. How many people visited your website in the last three months and what percentage of them converted into buyers? How many were repeat buyers and on an average, how much did each customer spend? Open the financial model template and study how we have calculated the key matrix.


Let's start by forecasting the revenue. To forecast the revenue, we will have to find answers to a few questions such as how do you acquire your customers, what is the average price of the service or the product that you are selling, and what does your customer conversion funnel look like. We will now think through our revenue model. Let's consider that you market your business online. Your target audience sees your ads on Google or Facebook and are diverted to your website. From there, a certain percentage of visitors get converted into buyers and they spend a certain average amount on your product or service. This is the customer conversion funnel. To start forecasting, first look at your historical data. How many people visited your website in the last three months and what percentage of them converted into buyers? How many were repeat buyers and on an average, how much did each customer spend? Open the financial model template and study how we have calculated the key matrix. You can pause the video here and fill your numbers or create a revenue model basis our discussion. Each business will operate differently and can have a very different revenue sheet. In case you are just starting, you need to study similar business models and get a sense to ensure that your numbers are realistic.


Open the financial model template and study how we have calculated the key matrix. You can pause the video here and fill your numbers or create a revenue model basis our discussion. Each business will operate differently and can have a very different revenue sheet. In case you are just starting, you need to study similar business models and get a sense to ensure that your numbers are realistic. Now, once you have filled in the historical data, use that as a base and show growth in traffic, percentage conversion and so on.


You can pause the video here and fill your numbers or create a revenue model basis our discussion. Each business will operate differently and can have a very different revenue sheet. In case you are just starting, you need to study similar business models and get a sense to ensure that your numbers are realistic. Now, once you have filled in the historical data, use that as a base and show growth in traffic, percentage conversion and so on. Your growth percentages should reflect the money that you will pump into the initiatives such as marketing spends, better products, etc.


Now, once you have filled in the historical data, use that as a base and show growth in traffic, percentage conversion and so on. Your growth percentages should reflect the money that you will pump into the initiatives such as marketing spends, better products, etc. The key to projections is identifying the growth levers. Example, in the template, month-on-month percentage growth in traffic, customer conversion percentage, repeat customer percentage, and average ticket size determine the revenue number. Grow these percentages based on historical data and in fact show steady improvement. Once you input these numbers, you will arrive at the monthly revenue number. Create at least 18-month projections. Pause the video here, study the revenue sheet, and create your financial model template. The outcome will be your month-on-month revenue number.


Your growth percentages should reflect the money that you will pump into the initiatives such as marketing spends, better products, etc. The key to projections is identifying the growth levers. Example, in the template, month-on-month percentage growth in traffic, customer conversion percentage, repeat customer percentage, and average ticket size determine the revenue number. Grow these percentages based on historical data and in fact show steady improvement. Once you input these numbers, you will arrive at the monthly revenue number. Create at least 18-month projections. Pause the video here, study the revenue sheet, and create your financial model template. The outcome will be your month-on-month revenue number. It is important to note that the revenue logic will change from business to business. Revenue sheet of a product business will be different from a service business. Revenue sheet of a pharma business will be completely different from a logistics business. Now that we have seen how to project the revenue, let's move on to the cost side.


The key to projections is identifying the growth levers. Example, in the template, month-on-month percentage growth in traffic, customer conversion percentage, repeat customer percentage, and average ticket size determine the revenue number. Grow these percentages based on historical data and in fact show steady improvement. Once you input these numbers, you will arrive at the monthly revenue number. Create at least 18-month projections. Pause the video here, study the revenue sheet, and create your financial model template. The outcome will be your month-on-month revenue number. It is important to note that the revenue logic will change from business to business. Revenue sheet of a product business will be different from a service business. Revenue sheet of a pharma business will be completely different from a logistics business. Now that we have seen how to project the revenue, let's move on to the cost side. There are three major cost heads, marketing, hiring, and product development.


It is important to note that the revenue logic will change from business to business. Revenue sheet of a product business will be different from a service business. Revenue sheet of a pharma business will be completely different from a logistics business. Now that we have seen how to project the revenue, let's move on to the cost side. There are three major cost heads, marketing, hiring, and product development. The logic for forecasting remains the same. Start with analysing how much have you been spending under each head and use that as a base to show growth in costs. Example, in case of your marketing, look at your existing cost of acquiring customers. Your CAC is nothing but the total marketing spend divided by the number of customers acquired. Let's say, historically you've spent around 1 lakh rupees on marketing and you were able to acquire 1305 customers in that month. Then your CAC becomes 77.


There are three major cost heads, marketing, hiring, and product development. The logic for forecasting remains the same. Start with analysing how much have you been spending under each head and use that as a base to show growth in costs. Example, in case of your marketing, look at your existing cost of acquiring customers. Your CAC is nothing but the total marketing spend divided by the number of customers acquired. Let's say, historically you've spent around 1 lakh rupees on marketing and you were able to acquire 1305 customers in that month. Then your CAC becomes 77. This number, especially in new-age tech business, is a very important metric. Calculate CAC for historical period, say last 3-6 months at least. Now use this data to predict the CAC. Your CAC is dependent on multiple factors. Initially, when you start, your CAC is lower, but as you start penetrating deeper, the CAC increases. It also changes based on what your competitors are spending on marketing.


The logic for forecasting remains the same. Start with analysing how much have you been spending under each head and use that as a base to show growth in costs. Example, in case of your marketing, look at your existing cost of acquiring customers. Your CAC is nothing but the total marketing spend divided by the number of customers acquired. Let's say, historically you've spent around 1 lakh rupees on marketing and you were able to acquire 1305 customers in that month. Then your CAC becomes 77. This number, especially in new-age tech business, is a very important metric. Calculate CAC for historical period, say last 3-6 months at least. Now use this data to predict the CAC. Your CAC is dependent on multiple factors. Initially, when you start, your CAC is lower, but as you start penetrating deeper, the CAC increases. It also changes based on what your competitors are spending on marketing. The more the competition spends, the higher the CAC. When you start predicting your CAC, don't predict a rapid fall. In many cases, the CAC actually increases over time as you start scaling up. In the template, you will see that historically the CAC is between 75 to 100. We have therefore maintained our projected CAC between 85 to 100 to be on a safer side.


This number, especially in new-age tech business, is a very important metric. Calculate CAC for historical period, say last 3-6 months at least. Now use this data to predict the CAC. Your CAC is dependent on multiple factors. Initially, when you start, your CAC is lower, but as you start penetrating deeper, the CAC increases. It also changes based on what your competitors are spending on marketing. The more the competition spends, the higher the CAC. When you start predicting your CAC, don't predict a rapid fall. In many cases, the CAC actually increases over time as you start scaling up. In the template, you will see that historically the CAC is between 75 to 100. We have therefore maintained our projected CAC between 85 to 100 to be on a safer side. If you re-look at the revenue sheet, we have already calculated the total number of customers that will convert on our website. We simply pull that number into the marketing sheet and multiply it with CAC to predict the total marketing spends. You can then assume other costs like PR, basis the quotes that you have received from vendors for the activities that you plan to undertake post-funding.


The more the competition spends, the higher the CAC. When you start predicting your CAC, don't predict a rapid fall. In many cases, the CAC actually increases over time as you start scaling up. In the template, you will see that historically the CAC is between 75 to 100. We have therefore maintained our projected CAC between 85 to 100 to be on a safer side. If you re-look at the revenue sheet, we have already calculated the total number of customers that will convert on our website. We simply pull that number into the marketing sheet and multiply it with CAC to predict the total marketing spends. You can then assume other costs like PR, basis the quotes that you have received from vendors for the activities that you plan to undertake post-funding. Pause the video here, study the marketing sheet and start filling your business specific numbers. Next is the manpower cost. To start forecasting the manpower cost, you have to follow three simple steps. Step 1. Identify the key functions of your business such as technology, marketing, operations, finance, etc. Start putting down these numbers and you require in each of these key functions. Step 2 is to ramp up the people requirement rationally over the next 18 months.


If you re-look at the revenue sheet, we have already calculated the total number of customers that will convert on our website. We simply pull that number into the marketing sheet and multiply it with CAC to predict the total marketing spends. You can then assume other costs like PR, basis the quotes that you have received from vendors for the activities that you plan to undertake post-funding. Pause the video here, study the marketing sheet and start filling your business specific numbers. Next is the manpower cost. To start forecasting the manpower cost, you have to follow three simple steps. Step 1. Identify the key functions of your business such as technology, marketing, operations, finance, etc. Start putting down these numbers and you require in each of these key functions. Step 2 is to ramp up the people requirement rationally over the next 18 months. If you notice in the template, we have divided key resources required under key function areas. We will start with the current team members and ramp up the requirement. Example, we currently don't have an SEO expert in our marketing team, but we intend to onboard one immediately post funding. We also intend to increase the number of creative associates and content writers in the month three of our projections period. Step three is to assume realistic salaries for each function.


Pause the video here, study the marketing sheet and start filling your business specific numbers. Next is the manpower cost. To start forecasting the manpower cost, you have to follow three simple steps. Step 1. Identify the key functions of your business such as technology, marketing, operations, finance, etc. Start putting down these numbers and you require in each of these key functions. Step 2 is to ramp up the people requirement rationally over the next 18 months. If you notice in the template, we have divided key resources required under key function areas. We will start with the current team members and ramp up the requirement. Example, we currently don't have an SEO expert in our marketing team, but we intend to onboard one immediately post funding. We also intend to increase the number of creative associates and content writers in the month three of our projections period. Step three is to assume realistic salaries for each function. The assumption is arrived at from market data. Example, a good developer would cost anywhere between 1 lakh to 2 lakh per month. Assume that cost, repeat this for every function.


If you notice in the template, we have divided key resources required under key function areas. We will start with the current team members and ramp up the requirement. Example, we currently don't have an SEO expert in our marketing team, but we intend to onboard one immediately post funding. We also intend to increase the number of creative associates and content writers in the month three of our projections period. Step three is to assume realistic salaries for each function. The assumption is arrived at from market data. Example, a good developer would cost anywhere between 1 lakh to 2 lakh per month. Assume that cost, repeat this for every function. Finally, all you have to do is to multiply the number of people in each functional area with the monthly salary to get the total salary cost at the firm level. The template takes care of this step automatically.


The assumption is arrived at from market data. Example, a good developer would cost anywhere between 1 lakh to 2 lakh per month. Assume that cost, repeat this for every function. Finally, all you have to do is to multiply the number of people in each functional area with the monthly salary to get the total salary cost at the firm level. The template takes care of this step automatically. Pause the video here and go through the personal data sheet. Fill in your business-specific requirements and costs to complete your manpower cost forecasting.


Finally, all you have to do is to multiply the number of people in each functional area with the monthly salary to get the total salary cost at the firm level. The template takes care of this step automatically. Pause the video here and go through the personal data sheet. Fill in your business-specific requirements and costs to complete your manpower cost forecasting. Now let's move on to technology cost. Tech cost is basically the cost incurred for servers, transactional emails, SMSs, etc. They are either fixed or variable, based on the traffic or customers or instances. In the template, depending on the nature, fixed or variable, you can plot these costs for the next 18 months. Take quotes from service providers and plug in the numbers. Finally, to run a venture, there are multiple costs such as rents, electricity, Wi-Fi, laptop, travel, etc.


Pause the video here and go through the personal data sheet. Fill in your business-specific requirements and costs to complete your manpower cost forecasting. Now let's move on to technology cost. Tech cost is basically the cost incurred for servers, transactional emails, SMSs, etc. They are either fixed or variable, based on the traffic or customers or instances. In the template, depending on the nature, fixed or variable, you can plot these costs for the next 18 months. Take quotes from service providers and plug in the numbers. Finally, to run a venture, there are multiple costs such as rents, electricity, Wi-Fi, laptop, travel, etc. One way to project these costs is to assume an average number attributed to each person and then multiply it with total headcount. Example, if you are operating in a co-working setup, for rent, electricity and Wi-Fi, you can simply assume a per seat cost of say 5000 and multiply it with the headcount on a monthly basis to get your monthly rental cost. You can apply the same logic for laptops.


Now let's move on to technology cost. Tech cost is basically the cost incurred for servers, transactional emails, SMSs, etc. They are either fixed or variable, based on the traffic or customers or instances. In the template, depending on the nature, fixed or variable, you can plot these costs for the next 18 months. Take quotes from service providers and plug in the numbers. Finally, to run a venture, there are multiple costs such as rents, electricity, Wi-Fi, laptop, travel, etc. One way to project these costs is to assume an average number attributed to each person and then multiply it with total headcount. Example, if you are operating in a co-working setup, for rent, electricity and Wi-Fi, you can simply assume a per seat cost of say 5000 and multiply it with the headcount on a monthly basis to get your monthly rental cost. You can apply the same logic for laptops. We have finished mapping all the major costs. To summarize the logic for forecasting expenses, it includes identifying key expense areas, analyzing the existing costs, and using that as a base to ramp up the cost in the coming months.


One way to project these costs is to assume an average number attributed to each person and then multiply it with total headcount. Example, if you are operating in a co-working setup, for rent, electricity and Wi-Fi, you can simply assume a per seat cost of say 5000 and multiply it with the headcount on a monthly basis to get your monthly rental cost. You can apply the same logic for laptops. We have finished mapping all the major costs. To summarize the logic for forecasting expenses, it includes identifying key expense areas, analyzing the existing costs, and using that as a base to ramp up the cost in the coming months. Great! So now we have projected the revenue as well as all the major costs. We simply need to bring them all on one single sheet and this becomes your P&L or profit and loss sheet. Revenue minus all the costs will give you your operating profit or what we call as EBITDA.


We have finished mapping all the major costs. To summarize the logic for forecasting expenses, it includes identifying key expense areas, analyzing the existing costs, and using that as a base to ramp up the cost in the coming months. Great! So now we have projected the revenue as well as all the major costs. We simply need to bring them all on one single sheet and this becomes your P&L or profit and loss sheet. Revenue minus all the costs will give you your operating profit or what we call as EBITDA. If you are using the template provided by us, you don't need to do anything specific. P&L will get populated automatically. Currently, if you see, your operating profit or your EBITDA is in red. Your costs are higher than your revenue. This is also termed as the monthly burn number. The reason for a burn is in your growth phase, you are front-loading your marketing, manpower and tech expenses. The impact of this will not be seen immediately on the profitability but in the later years. At least that's the assumption. You are burning not because your business is not doing well but because you are growing at a very fast pace. So your funding requirement is nothing but the sum of your negative monthly EBITDA or your monthly burn for the next 12 to 18 months. This is the amount of capital you need. To fuel your expansion plans. So to summarize, revenue minus all your costs will give us the burn amount and the sum of this burn for 18 months will give us the funding requirement. This is how you build your basic financial model. You can now use the template and prepare one for your own business. Once you are done with your first cut business model, you can share it with us and we will be happy to provide you with a template. The samples that you create will be shared by your own business owners depending on an object and the numbers of effort you put into it. Also Leave us a comment below which item you want posted on this video. So the most important thing in your ticketing business is that your business is successful. At least you also have an abundance of market value. You are making profits by using all the data available and you are also making money with an average market value as reward. You should always steadily trap others to close your business or contact a company that would offer something from your own business. Though you may be structured if not one bigger part of your business wants to see this product. Anyway, keep an eye on your business. Thanks for watching the video. Keep a close eye on your financial Johnson and Johnson Syrianvert global hedge fund stocks thatnak the rar vauboy Dro PRO resume strongThen online share'm


Great! So now we have projected the revenue as well as all the major costs. We simply need to bring them all on one single sheet and this becomes your P&L or profit and loss sheet. Revenue minus all the costs will give you your operating profit or what we call as EBITDA. If you are using the template provided by us, you don't need to do anything specific. P&L will get populated automatically. Currently, if you see, your operating profit or your EBITDA is in red. Your costs are higher than your revenue. This is also termed as the monthly burn number. The reason for a burn is in your growth phase, you are front-loading your marketing, manpower and tech expenses. The impact of this will not be seen immediately on the profitability but in the later years. At least that's the assumption. You are burning not because your business is not doing well but because you are growing at a very fast pace. So your funding requirement is nothing but the sum of your negative monthly EBITDA or your monthly burn for the next 12 to 18 months. This is the amount of capital you need. To fuel your expansion plans. So to summarize, revenue minus all your costs will give us the burn amount and the sum of this burn for 18 months will give us the funding requirement. This is how you build your basic financial model. You can now use the template and prepare one for your own business. Once you are done with your first cut business model, you can share it with us and we will be happy to provide you with a template. The samples that you create will be shared by your own business owners depending on an object and the numbers of effort you put into it. Also Leave us a comment below which item you want posted on this video. So the most important thing in your ticketing business is that your business is successful. At least you also have an abundance of market value. You are making profits by using all the data available and you are also making money with an average market value as reward. You should always steadily trap others to close your business or contact a company that would offer something from your own business. Though you may be structured if not one bigger part of your business wants to see this product. Anyway, keep an eye on your business. Thanks for watching the video. Keep a close eye on your financial Johnson and Johnson Syrianvert global hedge fund stocks thatnak the rar vauboy Dro PRO resume strongThen online share'm So let us start by understanding what valuation really means. Valuation is nothing but the 100% worth of your company.


If you are using the template provided by us, you don't need to do anything specific. P&L will get populated automatically. Currently, if you see, your operating profit or your EBITDA is in red. Your costs are higher than your revenue. This is also termed as the monthly burn number. The reason for a burn is in your growth phase, you are front-loading your marketing, manpower and tech expenses. The impact of this will not be seen immediately on the profitability but in the later years. At least that's the assumption. You are burning not because your business is not doing well but because you are growing at a very fast pace. So your funding requirement is nothing but the sum of your negative monthly EBITDA or your monthly burn for the next 12 to 18 months. This is the amount of capital you need. To fuel your expansion plans. So to summarize, revenue minus all your costs will give us the burn amount and the sum of this burn for 18 months will give us the funding requirement. This is how you build your basic financial model. You can now use the template and prepare one for your own business. Once you are done with your first cut business model, you can share it with us and we will be happy to provide you with a template. The samples that you create will be shared by your own business owners depending on an object and the numbers of effort you put into it. Also Leave us a comment below which item you want posted on this video. So the most important thing in your ticketing business is that your business is successful. At least you also have an abundance of market value. You are making profits by using all the data available and you are also making money with an average market value as reward. You should always steadily trap others to close your business or contact a company that would offer something from your own business. Though you may be structured if not one bigger part of your business wants to see this product. Anyway, keep an eye on your business. Thanks for watching the video. Keep a close eye on your financial Johnson and Johnson Syrianvert global hedge fund stocks thatnak the rar vauboy Dro PRO resume strongThen online share'm So let us start by understanding what valuation really means. Valuation is nothing but the 100% worth of your company. We will now explain to you the transaction-comparable method to find your company's valuation. In this method, we estimate the valuation by analyzing valuations of funded companies operating in the same space or having similar business models.


So let us start by understanding what valuation really means. Valuation is nothing but the 100% worth of your company. We will now explain to you the transaction-comparable method to find your company's valuation. In this method, we estimate the valuation by analyzing valuations of funded companies operating in the same space or having similar business models. Without further ado, let us take you through the example to help you understand this method.


We will now explain to you the transaction-comparable method to find your company's valuation. In this method, we estimate the valuation by analyzing valuations of funded companies operating in the same space or having similar business models. Without further ado, let us take you through the example to help you understand this method. Consider this company Terraman. It is a D2C company selling men's grooming products such as shaving foam, beard wax, face wash, body wash, etc. This company was founded a year ago by Rohan and John, both coming from an FMCG background.


Without further ado, let us take you through the example to help you understand this method. Consider this company Terraman. It is a D2C company selling men's grooming products such as shaving foam, beard wax, face wash, body wash, etc. This company was founded a year ago by Rohan and John, both coming from an FMCG background. The highlight of the company is that all its products are made from natural ingredients and they have a digital-only sales strategy with no retail presence. In one year of operations, the company has made a revenue of 1 crore. The founders now have plans to expand their business. They want to develop and launch a new product range. This product range will actually sell this inventory. They want to create a digital marketing push and hire quality people to manage growing operations. With this expansion strategy, the founders are targeting a revenue of 10 crores in the next financial year. Now for this expansion to happen, they will need 3 crores in funding. After multiple meetings with various investors, they finally secured the interest of a venture capital fund called Lion Capital.


Consider this company Terraman. It is a D2C company selling men's grooming products such as shaving foam, beard wax, face wash, body wash, etc. This company was founded a year ago by Rohan and John, both coming from an FMCG background. The highlight of the company is that all its products are made from natural ingredients and they have a digital-only sales strategy with no retail presence. In one year of operations, the company has made a revenue of 1 crore. The founders now have plans to expand their business. They want to develop and launch a new product range. This product range will actually sell this inventory. They want to create a digital marketing push and hire quality people to manage growing operations. With this expansion strategy, the founders are targeting a revenue of 10 crores in the next financial year. Now for this expansion to happen, they will need 3 crores in funding. After multiple meetings with various investors, they finally secured the interest of a venture capital fund called Lion Capital. Lion Capital has completed evaluating TerraMan and is keen on investing in the company.


The highlight of the company is that all its products are made from natural ingredients and they have a digital-only sales strategy with no retail presence. In one year of operations, the company has made a revenue of 1 crore. The founders now have plans to expand their business. They want to develop and launch a new product range. This product range will actually sell this inventory. They want to create a digital marketing push and hire quality people to manage growing operations. With this expansion strategy, the founders are targeting a revenue of 10 crores in the next financial year. Now for this expansion to happen, they will need 3 crores in funding. After multiple meetings with various investors, they finally secured the interest of a venture capital fund called Lion Capital. Lion Capital has completed evaluating TerraMan and is keen on investing in the company. The question now is, at what valuation do they invest? Like the start of every valuation discussion, Lion Capital asks the founders about their expectations of the valuation. The founders get back saying that they are comfortable offering a 10% stake for a 3 crore investment.


Lion Capital has completed evaluating TerraMan and is keen on investing in the company. The question now is, at what valuation do they invest? Like the start of every valuation discussion, Lion Capital asks the founders about their expectations of the valuation. The founders get back saying that they are comfortable offering a 10% stake for a 3 crore investment. Now, Lion Capital starts analyzing this deal. If the founders are willing to give a 10% stake for a 3 crore investment, it means that the 100% worth of the company or the valuation is 30 crores. Lion Capital has to now verify whether 30 crore is the right valuation for Terraman. To do this, they follow six simple steps of the transaction comparable method.


The question now is, at what valuation do they invest? Like the start of every valuation discussion, Lion Capital asks the founders about their expectations of the valuation. The founders get back saying that they are comfortable offering a 10% stake for a 3 crore investment. Now, Lion Capital starts analyzing this deal. If the founders are willing to give a 10% stake for a 3 crore investment, it means that the 100% worth of the company or the valuation is 30 crores. Lion Capital has to now verify whether 30 crore is the right valuation for Terraman. To do this, they follow six simple steps of the transaction comparable method. We first find comparable companies. We look for companies in a similar sector who has raised around the same quantum of funding. If this is Terraman's first round, then look for companies in the same sector with similar business models that have raised their first round.


Now, Lion Capital starts analyzing this deal. If the founders are willing to give a 10% stake for a 3 crore investment, it means that the 100% worth of the company or the valuation is 30 crores. Lion Capital has to now verify whether 30 crore is the right valuation for Terraman. To do this, they follow six simple steps of the transaction comparable method. We first find comparable companies. We look for companies in a similar sector who has raised around the same quantum of funding. If this is Terraman's first round, then look for companies in the same sector with similar business models that have raised their first round. If Terraman, brands such as Beardo, Bombay Shaving Company, Ustra are perfect comparables.


We first find comparable companies. We look for companies in a similar sector who has raised around the same quantum of funding. If this is Terraman's first round, then look for companies in the same sector with similar business models that have raised their first round. If Terraman, brands such as Beardo, Bombay Shaving Company, Ustra are perfect comparables. We will now try to find out the details of their funding rounds. This is our step 2.


If Terraman, brands such as Beardo, Bombay Shaving Company, Ustra are perfect comparables. We will now try to find out the details of their funding rounds. This is our step 2. The objective is to find the following details for the comparable company. Investor name, date of funding, funding amount and stake bought by the investors.


We will now try to find out the details of their funding rounds. This is our step 2. The objective is to find the following details for the comparable company. Investor name, date of funding, funding amount and stake bought by the investors. But how does one get this data? One way is to get this data from the Registrar of Companies, ROC portal of the Ministry of Corporate Affairs. But this might be a slightly tedious process. An alternative to this is the various databases some websites such as Crunchbase, Venture Intelligence, PitchBook, Capital IQ etc. provide. Sometimes a very basic Google search or news publication can also get you these details.


The objective is to find the following details for the comparable company. Investor name, date of funding, funding amount and stake bought by the investors. But how does one get this data? One way is to get this data from the Registrar of Companies, ROC portal of the Ministry of Corporate Affairs. But this might be a slightly tedious process. An alternative to this is the various databases some websites such as Crunchbase, Venture Intelligence, PitchBook, Capital IQ etc. provide. Sometimes a very basic Google search or news publication can also get you these details. The outcome of step 2 is getting the valuation figure of the comparable company.


But how does one get this data? One way is to get this data from the Registrar of Companies, ROC portal of the Ministry of Corporate Affairs. But this might be a slightly tedious process. An alternative to this is the various databases some websites such as Crunchbase, Venture Intelligence, PitchBook, Capital IQ etc. provide. Sometimes a very basic Google search or news publication can also get you these details. The outcome of step 2 is getting the valuation figure of the comparable company. All you have to do is divide the funding amount in column E by the investor stake in column F. For example, in Beardo's case, Venture Catalysts invested a 3.5 crores for a 49% stake. This means that Beardo's valuation is 3.3 crore divided by 49% which comes out to 6.6 crore.


The outcome of step 2 is getting the valuation figure of the comparable company. All you have to do is divide the funding amount in column E by the investor stake in column F. For example, in Beardo's case, Venture Catalysts invested a 3.5 crores for a 49% stake. This means that Beardo's valuation is 3.3 crore divided by 49% which comes out to 6.6 crore. Step 3 is to find the next year revenue of the comparable companies. So, what do we mean by the next year revenue? If the company received funding in 2020, the revenue of the company in 2021 is the next year revenue. For example, the Mann company raised funds in 2017. Their 2018 revenue or the next year revenue is 12.5 crores. You will again have to revisit ROC or databases mentioned earlier to get this value.


All you have to do is divide the funding amount in column E by the investor stake in column F. For example, in Beardo's case, Venture Catalysts invested a 3.5 crores for a 49% stake. This means that Beardo's valuation is 3.3 crore divided by 49% which comes out to 6.6 crore. Step 3 is to find the next year revenue of the comparable companies. So, what do we mean by the next year revenue? If the company received funding in 2020, the revenue of the company in 2021 is the next year revenue. For example, the Mann company raised funds in 2017. Their 2018 revenue or the next year revenue is 12.5 crores. You will again have to revisit ROC or databases mentioned earlier to get this value. Once you get the next year revenue, we move on to step 4, which is finding the revenue multiple. Finding revenue multiple is quick math. Just divide the valuation number by the next year revenue. In the case of the man company, the revenue multiple is the valuation of 16.5 crores divided by the next year revenue of 12.5 crores, which comes out to be 1.3x. We repeat this exercise for all comparable companies. Step 5 is the easiest. All you have to do is find an average of revenue multiples of all the comparables.


Step 3 is to find the next year revenue of the comparable companies. So, what do we mean by the next year revenue? If the company received funding in 2020, the revenue of the company in 2021 is the next year revenue. For example, the Mann company raised funds in 2017. Their 2018 revenue or the next year revenue is 12.5 crores. You will again have to revisit ROC or databases mentioned earlier to get this value. Once you get the next year revenue, we move on to step 4, which is finding the revenue multiple. Finding revenue multiple is quick math. Just divide the valuation number by the next year revenue. In the case of the man company, the revenue multiple is the valuation of 16.5 crores divided by the next year revenue of 12.5 crores, which comes out to be 1.3x. We repeat this exercise for all comparable companies. Step 5 is the easiest. All you have to do is find an average of revenue multiples of all the comparables. In the men's grooming segment, the average revenue multiple comes out to 2x. What does this 2x indicate? It tells us that in men's grooming segment, valuations typically are 2 times that of the next year revenue.


Once you get the next year revenue, we move on to step 4, which is finding the revenue multiple. Finding revenue multiple is quick math. Just divide the valuation number by the next year revenue. In the case of the man company, the revenue multiple is the valuation of 16.5 crores divided by the next year revenue of 12.5 crores, which comes out to be 1.3x. We repeat this exercise for all comparable companies. Step 5 is the easiest. All you have to do is find an average of revenue multiples of all the comparables. In the men's grooming segment, the average revenue multiple comes out to 2x. What does this 2x indicate? It tells us that in men's grooming segment, valuations typically are 2 times that of the next year revenue. Now, we have all the data we need to estimate Terraman's valuation. This brings us to our final step.


In the men's grooming segment, the average revenue multiple comes out to 2x. What does this 2x indicate? It tells us that in men's grooming segment, valuations typically are 2 times that of the next year revenue. Now, we have all the data we need to estimate Terraman's valuation. This brings us to our final step. Let's take a look at the formula of revenue multiple. As we have seen, revenue multiple is calculated by dividing the valuation by the next year revenue. We've already found the average revenue multiple which is 2x. The founders are projecting Terraman's next year revenue to be 10 crores. Let's plug these figures into the revenue multiple formulae. As you see, the valuation can now be found by simply multiplying 2x with 10 crores. The valuation of Terraman is hence estimated at 20 crores. This is also termed as the post-money valuation of the company.


Now, we have all the data we need to estimate Terraman's valuation. This brings us to our final step. Let's take a look at the formula of revenue multiple. As we have seen, revenue multiple is calculated by dividing the valuation by the next year revenue. We've already found the average revenue multiple which is 2x. The founders are projecting Terraman's next year revenue to be 10 crores. Let's plug these figures into the revenue multiple formulae. As you see, the valuation can now be found by simply multiplying 2x with 10 crores. The valuation of Terraman is hence estimated at 20 crores. This is also termed as the post-money valuation of the company. Lion Capital follows exactly these six steps to arrive at Terraman's 20 crore valuation.


Let's take a look at the formula of revenue multiple. As we have seen, revenue multiple is calculated by dividing the valuation by the next year revenue. We've already found the average revenue multiple which is 2x. The founders are projecting Terraman's next year revenue to be 10 crores. Let's plug these figures into the revenue multiple formulae. As you see, the valuation can now be found by simply multiplying 2x with 10 crores. The valuation of Terraman is hence estimated at 20 crores. This is also termed as the post-money valuation of the company. Lion Capital follows exactly these six steps to arrive at Terraman's 20 crore valuation. 100% worth of the company is 20 crores. Then for a 3 crore investment, they should get a 15% stake in the company. Here, there is a disconnect between the founder's comfort and the investor's expectation. So at what valuation will this deal happen? At 30 crore, like the founders wanted? Or at 20 crore, that Lion Capital has estimated bases the market data? Nobody can tell this. This is where founders' reasoning and negotiation skills play a critical role in closing the deal. As entrepreneurs, you should be prepared to justify your valuation ask. The best way to do it is to be ready with a transaction-comparable analysis for your business.


Lion Capital follows exactly these six steps to arrive at Terraman's 20 crore valuation. 100% worth of the company is 20 crores. Then for a 3 crore investment, they should get a 15% stake in the company. Here, there is a disconnect between the founder's comfort and the investor's expectation. So at what valuation will this deal happen? At 30 crore, like the founders wanted? Or at 20 crore, that Lion Capital has estimated bases the market data? Nobody can tell this. This is where founders' reasoning and negotiation skills play a critical role in closing the deal. As entrepreneurs, you should be prepared to justify your valuation ask. The best way to do it is to be ready with a transaction-comparable analysis for your business. When an equity investment happens, the investor buys a stake in the company against investing capital. Making the investor a shareholder in the company, this changes the shareholding structure of the company completely. Let us understand how changes in company shareholding structure are captured in the cap table. Consider Terraman, a D2C company that sells men's grooming products. This was founded last year by Rohan and John. To start the company, Rohan and John invested Rs. 50,000 each as share capital. This means that the total share capital for Terraman is Rohan's Rs. 50,000 plus John's Rs. 50,000, which equals to Rs. 1 lakh. This share capital is actually the value or the price of shares issued to Rohan and John. If we put this into perspective, we get the number of shares issued multiplied by the price per share, which is equal to the total share capital.


100% worth of the company is 20 crores. Then for a 3 crore investment, they should get a 15% stake in the company. Here, there is a disconnect between the founder's comfort and the investor's expectation. So at what valuation will this deal happen? At 30 crore, like the founders wanted? Or at 20 crore, that Lion Capital has estimated bases the market data? Nobody can tell this. This is where founders' reasoning and negotiation skills play a critical role in closing the deal. As entrepreneurs, you should be prepared to justify your valuation ask. The best way to do it is to be ready with a transaction-comparable analysis for your business. When an equity investment happens, the investor buys a stake in the company against investing capital. Making the investor a shareholder in the company, this changes the shareholding structure of the company completely. Let us understand how changes in company shareholding structure are captured in the cap table. Consider Terraman, a D2C company that sells men's grooming products. This was founded last year by Rohan and John. To start the company, Rohan and John invested Rs. 50,000 each as share capital. This means that the total share capital for Terraman is Rohan's Rs. 50,000 plus John's Rs. 50,000, which equals to Rs. 1 lakh. This share capital is actually the value or the price of shares issued to Rohan and John. If we put this into perspective, we get the number of shares issued multiplied by the price per share, which is equal to the total share capital. Since no investment has happened so far in the company, the price per share is equal to the face value of the share, which is 10 rupees. This tells us that the number of shares issued to Rohan and John is nothing but dividing share capital of 1 lakh rupees by the face value of shares, which is 10 rupees, and this comes out to 10,000 shares.


When an equity investment happens, the investor buys a stake in the company against investing capital. Making the investor a shareholder in the company, this changes the shareholding structure of the company completely. Let us understand how changes in company shareholding structure are captured in the cap table. Consider Terraman, a D2C company that sells men's grooming products. This was founded last year by Rohan and John. To start the company, Rohan and John invested Rs. 50,000 each as share capital. This means that the total share capital for Terraman is Rohan's Rs. 50,000 plus John's Rs. 50,000, which equals to Rs. 1 lakh. This share capital is actually the value or the price of shares issued to Rohan and John. If we put this into perspective, we get the number of shares issued multiplied by the price per share, which is equal to the total share capital. Since no investment has happened so far in the company, the price per share is equal to the face value of the share, which is 10 rupees. This tells us that the number of shares issued to Rohan and John is nothing but dividing share capital of 1 lakh rupees by the face value of shares, which is 10 rupees, and this comes out to 10,000 shares. Since Rohan and John contributed equally to the share capital, Rs. 50,000 each, both of them are issued an equal number of shares. So, Rohan gets 5,000 shares and John gets 5,000 shares. Hence, they own an equal stake in the company, that is 50%.


Since no investment has happened so far in the company, the price per share is equal to the face value of the share, which is 10 rupees. This tells us that the number of shares issued to Rohan and John is nothing but dividing share capital of 1 lakh rupees by the face value of shares, which is 10 rupees, and this comes out to 10,000 shares. Since Rohan and John contributed equally to the share capital, Rs. 50,000 each, both of them are issued an equal number of shares. So, Rohan gets 5,000 shares and John gets 5,000 shares. Hence, they own an equal stake in the company, that is 50%. Let's take a look at the cap table that represents this shareholding structure.


Since Rohan and John contributed equally to the share capital, Rs. 50,000 each, both of them are issued an equal number of shares. So, Rohan gets 5,000 shares and John gets 5,000 shares. Hence, they own an equal stake in the company, that is 50%. Let's take a look at the cap table that represents this shareholding structure. As you can see, the cap table tells us the following details. Terraman has two shareholders, Rohan and John. Both own a 50% stake in the company. Both have been issued 5000 shares each and the price per share is 10 rupees.


Let's take a look at the cap table that represents this shareholding structure. As you can see, the cap table tells us the following details. Terraman has two shareholders, Rohan and John. Both own a 50% stake in the company. Both have been issued 5000 shares each and the price per share is 10 rupees. The value of shareholding for both Rohan and John is 50,000, which is nothing but 5,000 shares multiplied by 10 rupees, which is the price per share.


As you can see, the cap table tells us the following details. Terraman has two shareholders, Rohan and John. Both own a 50% stake in the company. Both have been issued 5000 shares each and the price per share is 10 rupees. The value of shareholding for both Rohan and John is 50,000, which is nothing but 5,000 shares multiplied by 10 rupees, which is the price per share. Notice that the value of shareholding is equal to the share capital invested by Rohan and John.


The value of shareholding for both Rohan and John is 50,000, which is nothing but 5,000 shares multiplied by 10 rupees, which is the price per share. Notice that the value of shareholding is equal to the share capital invested by Rohan and John. This cap table represents the company's shareholding before funding. Hence, this is called the pre-money cap table.


Notice that the value of shareholding is equal to the share capital invested by Rohan and John. This cap table represents the company's shareholding before funding. Hence, this is called the pre-money cap table. Now, we would like to remember two key points. First, the sum of stakes across all shareholders is always 100%. Second, the value of shares of the company is the company's valuation. So right now, Terraman's valuation is the value of all 10,000 shares with a price per share of Rs. 10. This means the valuation of Terraman is Rs. 1,00,000. Let's fast forward by one year and find out what happens when this company raises a round of capital.


This cap table represents the company's shareholding before funding. Hence, this is called the pre-money cap table. Now, we would like to remember two key points. First, the sum of stakes across all shareholders is always 100%. Second, the value of shares of the company is the company's valuation. So right now, Terraman's valuation is the value of all 10,000 shares with a price per share of Rs. 10. This means the valuation of Terraman is Rs. 1,00,000. Let's fast forward by one year and find out what happens when this company raises a round of capital. Rohan and John raise 3 crores from Lion Capital. Against 3 crore investment, Lion Capital gets a 15% stake in the company. Here are the things that will now change in the cap table. Stake across all previous shareholders. Total number of shares. Price per share.


Now, we would like to remember two key points. First, the sum of stakes across all shareholders is always 100%. Second, the value of shares of the company is the company's valuation. So right now, Terraman's valuation is the value of all 10,000 shares with a price per share of Rs. 10. This means the valuation of Terraman is Rs. 1,00,000. Let's fast forward by one year and find out what happens when this company raises a round of capital. Rohan and John raise 3 crores from Lion Capital. Against 3 crore investment, Lion Capital gets a 15% stake in the company. Here are the things that will now change in the cap table. Stake across all previous shareholders. Total number of shares. Price per share. Let's first see how the stakes across all previous shareholders change. This change happens because Rohan and John are not selling their stake. So how does Lion Capital get a 15% stake in the company? If you thought dilution, then yes, you are right. To give Lion Capital a 15% stake in Terraman, Rohan and John's stake will get diluted to the extent of 15%. That is, Rohan and John's stake will now be lesser than 50%. Here is how dilution is calculated. Dilution stake is equal to pre-investment stake multiplied by 1 minus investor stake. For Rohan, this becomes diluted stake equals to 50% into 1 minus 15%. This comes out to be 15%. 42.5%. Similarly for John. Hence, Rohan and John's stake reduces from 50% to 42.5% and Lion Capital gets its 15% stake.


Rohan and John raise 3 crores from Lion Capital. Against 3 crore investment, Lion Capital gets a 15% stake in the company. Here are the things that will now change in the cap table. Stake across all previous shareholders. Total number of shares. Price per share. Let's first see how the stakes across all previous shareholders change. This change happens because Rohan and John are not selling their stake. So how does Lion Capital get a 15% stake in the company? If you thought dilution, then yes, you are right. To give Lion Capital a 15% stake in Terraman, Rohan and John's stake will get diluted to the extent of 15%. That is, Rohan and John's stake will now be lesser than 50%. Here is how dilution is calculated. Dilution stake is equal to pre-investment stake multiplied by 1 minus investor stake. For Rohan, this becomes diluted stake equals to 50% into 1 minus 15%. This comes out to be 15%. 42.5%. Similarly for John. Hence, Rohan and John's stake reduces from 50% to 42.5% and Lion Capital gets its 15% stake. Remember, we previously noted that the sum of stakes across all shareholders is always 100%. This can be used to verify the dilution calculation we just saw. If we add stakes of Rohan, John and all investors, now we get 42.5 plus 42.5 plus 15 which is 100%. This shows that our calculation is correct.


Let's first see how the stakes across all previous shareholders change. This change happens because Rohan and John are not selling their stake. So how does Lion Capital get a 15% stake in the company? If you thought dilution, then yes, you are right. To give Lion Capital a 15% stake in Terraman, Rohan and John's stake will get diluted to the extent of 15%. That is, Rohan and John's stake will now be lesser than 50%. Here is how dilution is calculated. Dilution stake is equal to pre-investment stake multiplied by 1 minus investor stake. For Rohan, this becomes diluted stake equals to 50% into 1 minus 15%. This comes out to be 15%. 42.5%. Similarly for John. Hence, Rohan and John's stake reduces from 50% to 42.5% and Lion Capital gets its 15% stake. Remember, we previously noted that the sum of stakes across all shareholders is always 100%. This can be used to verify the dilution calculation we just saw. If we add stakes of Rohan, John and all investors, now we get 42.5 plus 42.5 plus 15 which is 100%. This shows that our calculation is correct. Now for Lion Capital to own a 15% stake in the company, we will have to issue them shares. Note that since Rohan and John are not selling their stake, they will not transfer their shares to the investor. New shares will be created for the investor.


Remember, we previously noted that the sum of stakes across all shareholders is always 100%. This can be used to verify the dilution calculation we just saw. If we add stakes of Rohan, John and all investors, now we get 42.5 plus 42.5 plus 15 which is 100%. This shows that our calculation is correct. Now for Lion Capital to own a 15% stake in the company, we will have to issue them shares. Note that since Rohan and John are not selling their stake, they will not transfer their shares to the investor. New shares will be created for the investor. Before investment, Rohan owned a 50% stake and 5,000 shares in the company. After investment, this has changed. John owns a 50% stake and 5,000 shares in the company.


Now for Lion Capital to own a 15% stake in the company, we will have to issue them shares. Note that since Rohan and John are not selling their stake, they will not transfer their shares to the investor. New shares will be created for the investor. Before investment, Rohan owned a 50% stake and 5,000 shares in the company. After investment, this has changed. John owns a 50% stake and 5,000 shares in the company. This means that 10,000 shares represented 100% shares of the company. However, after investment, Rohan and John are both diluted to 42.5% stake and still own 5,000 shares each. This means that 10,000 shares now represent only 85% of the company. By simple math, 85% into total number of shares equal to 10,000. This gives the total number of shares equal to 11,765 shares. This means that Rohan's shares plus John's shares plus Lion's capital share is equal to 11,765.


Before investment, Rohan owned a 50% stake and 5,000 shares in the company. After investment, this has changed. John owns a 50% stake and 5,000 shares in the company. This means that 10,000 shares represented 100% shares of the company. However, after investment, Rohan and John are both diluted to 42.5% stake and still own 5,000 shares each. This means that 10,000 shares now represent only 85% of the company. By simple math, 85% into total number of shares equal to 10,000. This gives the total number of shares equal to 11,765 shares. This means that Rohan's shares plus John's shares plus Lion's capital share is equal to 11,765. This gives Lion Capital 1,765 shares. These are the number of shares that need to be created for the investment of Lion Capital.


This means that 10,000 shares represented 100% shares of the company. However, after investment, Rohan and John are both diluted to 42.5% stake and still own 5,000 shares each. This means that 10,000 shares now represent only 85% of the company. By simple math, 85% into total number of shares equal to 10,000. This gives the total number of shares equal to 11,765 shares. This means that Rohan's shares plus John's shares plus Lion's capital share is equal to 11,765. This gives Lion Capital 1,765 shares. These are the number of shares that need to be created for the investment of Lion Capital. Now one last thing. We need to calculate the change in price per share. Remember, the company's valuation is the value or the price of total number of shares. Total number of shares multiplied by price per share equals valuation. That means price per share is equal to valuation divided by the total number of shares. The valuation of the company can be simply found by cross-multiplication. The proposed deal suggests that 3 crores is equal to 15% of the company. This means 100% of the company is equal to 20 crores. We've already found out the total number of shares, which is equal to 11,765.


This gives Lion Capital 1,765 shares. These are the number of shares that need to be created for the investment of Lion Capital. Now one last thing. We need to calculate the change in price per share. Remember, the company's valuation is the value or the price of total number of shares. Total number of shares multiplied by price per share equals valuation. That means price per share is equal to valuation divided by the total number of shares. The valuation of the company can be simply found by cross-multiplication. The proposed deal suggests that 3 crores is equal to 15% of the company. This means 100% of the company is equal to 20 crores. We've already found out the total number of shares, which is equal to 11,765. Plugging the values in the formula, we find the new price per share to be 20 crores divided by 11,765, which is approximately 17,000 rupees.


Now one last thing. We need to calculate the change in price per share. Remember, the company's valuation is the value or the price of total number of shares. Total number of shares multiplied by price per share equals valuation. That means price per share is equal to valuation divided by the total number of shares. The valuation of the company can be simply found by cross-multiplication. The proposed deal suggests that 3 crores is equal to 15% of the company. This means 100% of the company is equal to 20 crores. We've already found out the total number of shares, which is equal to 11,765. Plugging the values in the formula, we find the new price per share to be 20 crores divided by 11,765, which is approximately 17,000 rupees. Let's take a look at the cap table now. As you see, there are three shareholders now. Rohan, John and Lion Capital. Rohan now owns a stake of 42.5% in the company and has 5000 shares. The price per share is 17,000 and the value of Rohan's shareholding is 8.5 crores. The same is the case with John. As for Lion Capital, it has bought a stake of 15% and is issued 1765 new shares. The price per share is 17,000 rupees and the value of the shareholding is 3 crores.


Plugging the values in the formula, we find the new price per share to be 20 crores divided by 11,765, which is approximately 17,000 rupees. Let's take a look at the cap table now. As you see, there are three shareholders now. Rohan, John and Lion Capital. Rohan now owns a stake of 42.5% in the company and has 5000 shares. The price per share is 17,000 and the value of Rohan's shareholding is 8.5 crores. The same is the case with John. As for Lion Capital, it has bought a stake of 15% and is issued 1765 new shares. The price per share is 17,000 rupees and the value of the shareholding is 3 crores. Also, note that now the value or the price of the total number of shares in the company is 20 crores, which is the company's valuation.


Let's take a look at the cap table now. As you see, there are three shareholders now. Rohan, John and Lion Capital. Rohan now owns a stake of 42.5% in the company and has 5000 shares. The price per share is 17,000 and the value of Rohan's shareholding is 8.5 crores. The same is the case with John. As for Lion Capital, it has bought a stake of 15% and is issued 1765 new shares. The price per share is 17,000 rupees and the value of the shareholding is 3 crores. Also, note that now the value or the price of the total number of shares in the company is 20 crores, which is the company's valuation. This cap table represents the company's shareholding after funding. Hence, this is called the post-money cap table. On your screen right now, you can see both the pre- and the post-money cap tables. These simple tables are capturing all shareholding details of the company before and after funding. You are now ready to start creating your company's cap tables.


Also, note that now the value or the price of the total number of shares in the company is 20 crores, which is the company's valuation. This cap table represents the company's shareholding after funding. Hence, this is called the post-money cap table. On your screen right now, you can see both the pre- and the post-money cap tables. These simple tables are capturing all shareholding details of the company before and after funding. You are now ready to start creating your company's cap tables. Hi, welcome to Fund Enable's course on investment deal structuring. In the last course, we learned how to find valuation using the transaction comparable method. Now imagine you propose a valuation number, but your investor do not agree to it. Then what should you do? Do you walk away from the deal? Well, if there is money on the table, you should try your best to arrive at a common ground. This is where certain innovative structures and instruments can come to your rescue. In this course, we will study these structures which play a very vital role in closing a deal faster. By the use of these structures, the determination of valuation happens not today, but at some point in the near future based on an event such as future revenue or next round of funding. Let's begin. In this course, we have studied Ccd and Convertible Notes in depth We would like to point out that the best way to close a transaction with the investor is to agree upon a valuation and percentage shareholding upfront unjustly. Opt for the Ccd or the convertible method only when there is a disconnect between you and your investor on the valuation number. Go for the Ccd when you are confident about Solving the万时数占卦으占卦书卒卢占卦书占占卦占卟占卦卦占占占占占卦占卦占卦占占占占假占� carte кар程agnize Volkswagen,ro Som都有 ume when you are confident about making revenue in the coming year. This is because the valuation in CCD is dependent on the actual revenue you make in the next year. If you underperform on the revenue front, you will end up giving more stake to the investor. Convertible notes are the way to go when you are confident about raising the next round of capital in the next 18-12 months.


This cap table represents the company's shareholding after funding. Hence, this is called the post-money cap table. On your screen right now, you can see both the pre- and the post-money cap tables. These simple tables are capturing all shareholding details of the company before and after funding. You are now ready to start creating your company's cap tables. Hi, welcome to Fund Enable's course on investment deal structuring. In the last course, we learned how to find valuation using the transaction comparable method. Now imagine you propose a valuation number, but your investor do not agree to it. Then what should you do? Do you walk away from the deal? Well, if there is money on the table, you should try your best to arrive at a common ground. This is where certain innovative structures and instruments can come to your rescue. In this course, we will study these structures which play a very vital role in closing a deal faster. By the use of these structures, the determination of valuation happens not today, but at some point in the near future based on an event such as future revenue or next round of funding. Let's begin. In this course, we have studied Ccd and Convertible Notes in depth We would like to point out that the best way to close a transaction with the investor is to agree upon a valuation and percentage shareholding upfront unjustly. Opt for the Ccd or the convertible method only when there is a disconnect between you and your investor on the valuation number. Go for the Ccd when you are confident about Solving the万时数占卦으占卦书卒卢占卦书占占卦占卟占卦卦占占占占占卦占卦占卦占占占占假占� carte кар程agnize Volkswagen,ro Som都有 ume when you are confident about making revenue in the coming year. This is because the valuation in CCD is dependent on the actual revenue you make in the next year. If you underperform on the revenue front, you will end up giving more stake to the investor. Convertible notes are the way to go when you are confident about raising the next round of capital in the next 18-12 months. As the valuation here is dependent on the subsequent funding rounds, we hope this course enables you to make the right decision when it comes to closing a round of funding. Thank you.


Hi, welcome to Fund Enable's course on investment deal structuring. In the last course, we learned how to find valuation using the transaction comparable method. Now imagine you propose a valuation number, but your investor do not agree to it. Then what should you do? Do you walk away from the deal? Well, if there is money on the table, you should try your best to arrive at a common ground. This is where certain innovative structures and instruments can come to your rescue. In this course, we will study these structures which play a very vital role in closing a deal faster. By the use of these structures, the determination of valuation happens not today, but at some point in the near future based on an event such as future revenue or next round of funding. Let's begin. In this course, we have studied Ccd and Convertible Notes in depth We would like to point out that the best way to close a transaction with the investor is to agree upon a valuation and percentage shareholding upfront unjustly. Opt for the Ccd or the convertible method only when there is a disconnect between you and your investor on the valuation number. Go for the Ccd when you are confident about Solving the万时数占卦으占卦书卒卢占卦书占占卦占卟占卦卦占占占占占卦占卦占卦占占占占假占� carte кар程agnize Volkswagen,ro Som都有 ume when you are confident about making revenue in the coming year. This is because the valuation in CCD is dependent on the actual revenue you make in the next year. If you underperform on the revenue front, you will end up giving more stake to the investor. Convertible notes are the way to go when you are confident about raising the next round of capital in the next 18-12 months. As the valuation here is dependent on the subsequent funding rounds, we hope this course enables you to make the right decision when it comes to closing a round of funding. Thank you. Here are 11 standard terms, rights and clauses included in a standard venture capital or angel investment term sheet. Let us understand them one by one.


As the valuation here is dependent on the subsequent funding rounds, we hope this course enables you to make the right decision when it comes to closing a round of funding. Thank you. Here are 11 standard terms, rights and clauses included in a standard venture capital or angel investment term sheet. Let us understand them one by one. Valuation and deal structuring.


Here are 11 standard terms, rights and clauses included in a standard venture capital or angel investment term sheet. Let us understand them one by one. Valuation and deal structuring. First set of clauses are related to the valuation and deal structure. In this clause, we clearly define the investment amount and the percentage stake to be offered to the investor and what structure is used. It is a CCPS or is it a CCD or convertible node structure? Both these concepts are covered in detail in our course on understanding valuations and deal structuring.