Event Recap: Startup Financials – Mastering the Art of Financial Projections

On March 7th, the McGill Dobson Centre for Entrepreneurship hosted a workshop on Startup Financials. By show of hands, approximately 2/3 of the people attending the workshop were working on their own startup projects!

Being able to come up with a solid set of financial projections is essential in defining the business model of a young venture – something that most entrepreneurs are clearly aware of, since it was in a packed room that Maher Ayari, President of the Student Executive Team of the McGill Dobson Centre, first introduced the goals of the workshop.

Sean Kaiser, CEO of Appetite, a startup that went through the McGill X-1 Accelerator program last year

Appetite

Sean Kaiser was the first to take up the floor. Sean is the CEO of Appetite, a startup that walked away from the McGill Dobson Cup of 2016 with an Honorable Mention and participated in the McGill X-1 Accelerator last summer (read our Startup Spotlight article on Appetite here).

Building on his experience, he described how he and his team managed to learn the basics of financial projections without any background in management. For Appetite, it was very much about leveraging the resources available at McGill: Sean and his colleagues went to TAs, professors, consulted textbooks, and browsed the internet, looking for information and feedback.

One of the tips he gave: use the resources available in the university, on the internet etc. and not to hesitate to reach out to people with expertise for feedback.

A dynamic Q&A session ensued, during which Sean reminded everyone that both time and money are resources, and that as a young startup, you have to think about what is the most important for you at each stage.

National Bank

We then welcomed Rabih Atallah and Francis Martel, both of them working as bankers at National Bank, who came to introduce the audience to some concepts and ratios they had to master in order to set up a convincing business plan. Francis, who served as a judge during the Semi-Finals of the McGill Dobson Cup 2017, observed that from all the pitches he had the chance to listen to, financials were always the weakest part of the presentation.

How much money are you going to make? Are your projections realistic? Do you have different scenarios? These are some of the questions you should be able to answer when pitching your startup to a banker, an investor, or a judge from the McGill Dobson Cup 2017.

Rahib and Francis gave the audience a Financials 101 presentation, whose key points included that “cash flow is the name of the game” and adequately managing your cash is crucial for a startups’ survival and growth; that you should try to keep your fixed costs as low as possible; and that you should not make your projections too aggressive but always be able to justify any figure you come up with. Time was also spent on introducing a few ratios that every business should understand and monitor, trends in ratios being often more insightful than the ratios themselves.

White Star Capital

The last speaker to intervene was Edouard Gaussen, a former McGill student now working as an Associate at White Star Capital, a venture capital fund. His presentation focused on how VC funding works, a topic of great interest for young entrepreneurs thinking of taking their startup to the next level.

When asked at what point in the life of a startup should entrepreneurs reach out to VC funds and mentors, he made it clear that you don’t need to have everything figured out beforehand, but plan on reaching out at the moment when your (growth) figures will look best. However, although “raising money is a full-time job”, it should not come to the point where it might endanger day-to-day operations, a piece of advice that echoed Sean’s recommendations.

Edouard also explained what he, as an investor, was looking for when considering funding a company, which includes quite  lot of things. VC funds will consider the “product-founder fit”, i.e. their assessment of whether the company founder has the potential to take their startup to the stars; the points of differentiation of the startups with competitors, and, of course, the financial aspects of the business.

He ended his presentation and the entire workshop on a very positive note, explaining that the VC community in Montreal was working in a collaborative manner and that everyone in the industry was pushing to grow the startup ecosystem here… A word to the wise!

This event was the first of the three last events that the McGill Dobson Centre for Entrepreneurship will hold in spring 2017. On Thursday March 9th, we held an event on Startup Legals & Intellectual Property, and on Thursday, March 16th, the McGill Dobson Centre will be hosting its last workshop of the year on Social Media Marketing for Startups.

Follow us on Facebook for more content about the McGill Dobson Centre for Entrepreneurship and don’t forget that the Finals of the McGill Dobson Cup 2017 (powered by National Bank) will take place on March 22nd!

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Charlotte Gauthron

After graduating with a Bachelor of Arts from Sciences Po Paris, Charlotte decided to join the Desautels Faculty of Management, where she’s now pursuing a BCom, majoring in Information Systems. Now part of The Dobson Chronicles team, she loves learning about new ideas. She hopes to one day be able to find her dream job, one that will allow her to reconcile her deep interest for social enterprise with her love of food.