Her CEO Journey™: The Business Finance Podcast for Mission-Driven Women Entrepreneurs

Weekly show where my featured guests and I explore the financial and business challenges women face on the entrepreneurial journey to success. You'll hear them talk about the money side of their businesses in ways you've always wanted to know about, but wouldn't dare ask. They openly share their disappointments, failures, successes, and everything in-between as they grew sales ranging from 6 to 9 figures. Knowing where your business stands financially helps you make critical decisions with confidence. It's simply the best way to be sure you grow a business that fuels the life you want to live.

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episode 122: Her CFO Tips: 3 Steps to Impressing Your Investors with a Mid-Year Financial Review [transcript]


Your relationship with your investors shouldn’t end after you’ve successfully raised capital. It's vital to update them on the progress of your business. After all, they placed faith in you and your vision. Being proactive in letting your investors know where the money is going will build trust and strengthen investor relationships. You can do this by having a transparent and well-constructed mid-year financial review.

In this episode, we will talk about three steps you should take to successfully create a mid-year financial review. Aside from impressing your investors, doing so can also help you spot problems and solve them promptly. 

If you want to build up your investor relationships and create accountability for yourself, then tune in to this episode!

3 reasons why you should listen to the full episode: 

  1. Learn why doing a financial review after successfully raising capital can help you with investor relationships.
  2. Find out the three steps you need to take to craft a well-thought-out mid-year financial review.
  3. Understand the options that you, as a founder, have with regard to your business finance.

Episode Highlights

  • [00:00] Maintaining Investor Relationships After Capital Raising
  • [02:18] Step 1: Review and update the assumptions in your financial model
  • [03:23] Step 2: Prepare a financial projection for the next 12 months 
  • [03:40] Step 3: Review your working capital
  • [04:07] Partnering with a CFO 

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 2021-07-01  5m
 
 
00:00  Christina Sjahli
Let's say your
00:00
business was successful in
00:02
raising capital late last year
00:02
or early this year. Normally,
00:06
your investor should want to
00:06
know the progress you are making
00:10
in your business. If they don't
00:10
ask for one, still give them an
00:14
update. Being proactive is
00:14
better than waiting for
00:18
investors to ask you for an
00:18
update because this is how you
00:22
can build trust and strengthen
00:22
relationship with your
00:26
investors. After all, they
00:26
believe in your vision and give
00:30
you the funding.
00:32
I always said, the work starts
00:32
after you receive the funding.
00:36
Now, it's time to show the
00:36
investors what you have done
00:40
with the funding and the impact
00:40
on their investment to your
00:43
business. But it doesn't mean
00:43
you cannot change your plan as
00:49
you presented on the pitch deck.
00:49
It means, if you change your
00:53
plan, then use this mid-year
00:53
update to show investors what
00:58
have changed, reason behind the
00:58
change, and what is the
01:02
financial implication of those
01:02
changes in your business.
01:09
In this solo episode, I'm
01:09
sharing three steps on how to
01:12
perform mid-year financial
01:12
review post-capital raising. A
01:17
mid-year financial review is not
01:17
only going to benefit investors,
01:22
but it can also help you as a
01:22
founder to spot possible
01:26
problems and figure out solution
01:26
before it's too late.
01:30
You're listening to Her CEO
01:30
Journey, the business finance
01:33
podcast for mission-driven women
01:33
entrepreneurs. I'm your host,
01:37
Christina Sjahli. If you are new
01:37
here, a big, warm welcome. If we
01:43
are not connected on LinkedIn,
01:43
please reach out and say hi
01:46
because that's where I hang out
01:46
and share my business finance
01:50
tips.
01:50
If you have been listening to
01:50
this podcast for a while, and
01:54
you are a regular listener, I
01:54
want you to know, I appreciate
01:58
you. My podcast won't be around
01:58
without your support. This is a
02:03
free weekly show where my guests
02:03
and I want to inspire you to
02:07
balance between mission and
02:07
profit, to create an impact in
02:11
this world, and to achieve
02:11
financial equality through your
02:15
business.
02:18  Here is step number one
Review
02:18
and update the assumption used
02:23
in the financial model.
02:23
Normally, when you pitch to
02:26
investor, you use certain
02:26
assumptions to build your
02:29
financial model, and you share
02:29
the result on the pitch deck.
02:33
Now that a few months have
02:33
passed, it's time for you to
02:36
update your assumption based on
02:36
additional information you have
02:40
gathered and the current
02:40
economic situation. Some of the
02:44
things you should update for
02:44
example, sales pipeline, expense
02:48
pipeline, and capital investment
02:48
pipeline.
02:51
Normally, I would also suggest
02:51
my client to take it a step
02:55
further. Show a comparison
02:55
between your initial model with
03:00
the updated model and explain
03:00
any variance. It is always
03:04
beneficial to share possible
03:04
issue as well, and share your
03:09
plan to solve those issues. This
03:09
shows you are being proactive,
03:14
or perhaps your investor can
03:14
suggest a better solution. It is
03:18
a win-win to share an update.
03:23  Step number two
Prepare a
03:23
financial projection for the
03:26
next 12 months, and show what is
03:26
the cash burn rate. What's the
03:30
available cash on hand as all
03:30
this mid-year point? And more
03:34
importantly, what is your cash
03:34
runway?
03:40  Step number three
Review your
03:40
working capital. And this is
03:44
relevant to understand your cash
03:44
runway. Your working capital is
03:48
the best indicator of possible
03:48
cash flow issues in the near
03:51
future. You want to understand
03:51
how many days does it take your
03:56
customer or client to pay you,
03:56
how many days it takes you to
04:00
pay suppliers, how many days on
04:00
average it takes you to sell
04:05
inventories.
04:07
There you have it. You have the
04:07
three steps where you can
04:10
impress your investors while
04:10
creating accountability for
04:15
yourself. We understand as a
04:15
founder, you may have the
04:18
financial knowledge and skill
04:18
set. But maybe, you'd rather
04:22
spend your time in other
04:22
business activities you enjoy.
04:26
This is where we can partner
04:26
with you. We understand business
04:29
finance requires time, but it
04:29
doesn't have to be your time.
04:33
Once we partner together, you
04:33
have more capacity, while
04:37
continue to have financial
04:37
result you can understand and
04:41
trust. And we make sure you are
04:41
making business decision with
04:45
your purpose front and center.
04:45
Connect with us at
04:49
christinasjahli.com/let-s-chat.
04:54
And that brings us to the end of
04:54
another show. Thank you so much
04:58
for listening to another episode
04:58
of Her CEO Journey, the business
05:02
finance podcast for women
05:02
entrepreneurs. If you want to
05:06
create a proactive financial
05:06
plan and process for your
05:10
business so you are ready to
05:10
weather the financial storm over
05:14
the next few months, let's chat
05:14
and see what's possible for you.
05:18
Book in a time to speak with me
05:18
at
05:20
christinasjahli.com/let-s-chat.