Floww Gets You Investment-Ready
Growing your company to a point where you need to consider raising external funding to progress beyond your current stage is a remarkable achievement, and you should be very proud of your progress! As every entrepreneur inevitably learns, it’s very difficult to achieve significant growth without the injection of new capital.
The fundraising process however can be stressful and challenging, so the better prepared you are for what lies ahead the smoother the process will be.
Floww is a platform specifically designed to bring entrepreneurs and investors together, standardizing the information shared by companies so that investors can make decisions based on real data.
While onboarding your company to Floww, you will deal with members from both our Content and Data teams, each with the specific goal of helping you construct an accurate and compelling profile of your company to sell to investors. These team members are highly skilled in their disciplines and can offer valuable feedback regarding the information contained within your investor pitch deck and financial model.
Floww’s Content Team
After creating an account and uploading your information to the platform, one of our Content Creators will then use the information contained within your pitch deck – as well as supplementary information gathered from other credible sources – to create a comprehensive profile for your company on the Floww platform.
After reviewing your information, the Content Creator can also provide you with tailored feedback regarding additional content that you should consider including within your base deck, including some vital sections to be addressed.
What Content You Should Include
In addition to the basic information like your company name, description, and team members, there are five vital areas of information that our Content Creators will assure you have adequately represented:
A critical component in your pitch deck to get right is the Problem slide. This is where you get to demonstrate the extent of the issues that the user faces, including how much time and money this problem costs your target users every year. It’s also where you introduce pain points to draw on the personal experiences of the reader and expand on what happens if the problem remains unsolved.
The more accurately you can break down and define the problem the better, as this indicates to potential investors that you have a thorough understanding of the problem and can therefore design and provide a more holistic solution.
First and foremost, the Solution section needs to present a clear explanation of what the product/service is that you are providing, and how the product/service directly addresses the user challenges raised earlier. This direct link between the problem and the solution is critical as it again demonstrates that you have a thorough grasp of the issues you have set out to solve.
This section must also thoroughly demonstrate to the reader what the benefits are of using or purchasing your product/service.
For a B2B offering, focus on answering questions such as:
- What are the benefits I am offering to these companies?
- What increase in revenue can a company expect by using my product/service?
- How much time/money/effort will this save my clients?
A B2C offering should focus on answering questions such as:
- What are the benefits to the user?
- What hurdles does the product remove for the user?
- What new activity does this product enable?
The How-It-Works section of your investor pitch deck is an extension of the solution, but rather than focusing on what the product/service is, this section explains at a more in-depth level how the product/service operates and how it is to be used.
You will need to explain the tech stack deployed to create the product and/or provide the service, the steps users need to follow in order to use your product/service to its fullest extent, and provide an in-depth explanation of your monetization strategy (who pays what and when).
Broadly speaking, when presenting information on the Market towards which your product/service is directed, your presentation should cover three key aspects:
- Who are the target users/clients?
- What is the TAM (Total Addressable Market), SAM (Serviceable Addressable Market), and SOM (Serviceable Obtainable Market) and what are their projected growth rates?
- Clear identification of competitors – direct or indirect
TAM (Total Addressable Market) is defined as the total demand for a product or service. In the unrealistic case where your company is the sole provider of a product/service and is present in every country, your revenue would then be equivalent to TAM.
SAM (Serviceable Addressable Market) is defined as the total demand for a product or service within your geographical reach, but this still does not account for competition. SOM (Serviceable Obtainable Market) however, considers both geographic reach and competition and is defined as the percentage of the SAM that your company can realistically capture.
Traction is a critical piece of information for potential investors as it demonstrates that there is a potential market for your product/service. The best way to demonstrate the traction your product/service has achieved so far is through metrics.
For a B2B offering, investors would be interested in seeing data on the following metrics, amongst others:
- ARR/MRR (Annual/Monthly Recurring Revenue)
- Revenue derived from your top 5 clients
- Customer pipeline, including potential contract values
For a B2C offering, metrics that should be included in your investor pitch deck, amongst others, include:
- Active Users
Further to the above, you could also include information like:
- Partners and strategic investors
- Patents and certifications
- Awards and media coverage
Floww’s Data Team
Working in tandem with the Content Creators, Floww’s Financial Data Analysts meanwhile will set out to fill out your company’s performance pages. After reviewing your information and before finalizing the upload of your model, the Financial Data Analyst will review your financial model for any issues or errors and will inform you should any be found. The Financial Data Analyst may pick up on formula/calculation errors, typos and omissions, the incorrect polarity of line items, period-to-period inconsistencies, wrong mapping of financial figures, and incorrect accounting treatment.
The Financial Data Analyst will also suggest you submit a full three-statement financial model, presented monthly, with at least 2 years of projections as well as actual financial performance figures (as available). The reason we ask for at least 2 years of projections is because it provides investors with valuable insights into the expected growth in revenues and expenses, which is vital for them to understand before they invest. A monthly breakdown also significantly aids their analysis given the speed at which circumstances can change during the early stages of a company’s operations.
What Data You Should Include
- The Income Statement is the first of three core financial statements and presents the financial performance of a company over a specified period (i.e. for the year ended 31 December 2022)
- Reporting on a company’s income and expenses, this statement reveals whether the company made a profit/incurred a loss over the period (or expects to, in the case of projections) and provides an indication of management’s efficiency to generate revenue
- The Balance Sheet is a core financial statement that presents the financial performance of a company at a specified date in time (i.e. as of 31 December 2022) and reports on a company’s assets, liabilities, and equity
- Comparing a company’s Balance Sheet over consecutive periods is useful in determining the presence of trends in the different line items. This financial statement is also key in determining a company’s ability to borrow or pay dividends
- The Cashflow Statement indicates the amount of cash generated and used by a company during a specified time period. The statement covers three major items, namely (1) Cashflow from Operating Activities, (2) Cashflow from Investing Activities, and (3) Cashflow from Financing Activities
- Analysing a company’s Cashflow Statement can provide an investor with valuable insights into the company’s inflow and outflow of cash and cash equivalents, helping the investor know more about the availability of cash within the business
- KPIs, or Key Performance Indicators, are measurable values that demonstrate how effectively a company is achieving key business objectives which are generally key drivers of growth. They can be separated into both leading and lagging indicators and can cover various measures such as strategic, operational, project, risk, and HR
- The importance of KPI measurement and analysis lies in the unbiased and quantitative feedback they provide regarding management’s effectiveness in achieving goals. A lagging indicator would provide feedback on the effectiveness of actions taken in the past, whereas a leading indicator can offer guidance as to the expected future performance based on current actions
Floww’s Data team always recommends a set of “Core KPIs” be included in every financial model, these include:
- Total Revenue – demonstrates to investors the scale of your business and traction with paying customers over time, which is used to evaluate your company’s investment potential
- Total Staff Costs – demonstrates to investors the total expenditure incurred for staff time used to deliver goods and services
- EBITDA – demonstrates to investors your short-term operational efficiency, which is a more accurate reflection of your operating profitability since your EBITDA margin ignores the impacts of non-operating factors such as interest expenses, taxes, or intangible assets
- Total Costs – demonstrates to investors the total expenses incurred in business operations
- Cash Receipts From The Sale Of Goods Or Rendering Of Services – demonstrates to investors how much cash your company generates from its core business operations
- Cash Payments To Suppliers And Employees – demonstrates to investors how much the company spends on day-to-day operations and allows them to better understand how you intend to spend their cash should they invest
- Net Cashflow – demonstrates to investors your company’s financial viability, as a consistent positive net cash flow is an excellent indicator of your business’s potential to succeed
- Gross Runway – demonstrates to investors how many months your company can keep operating before it runs out of money. Investors generally want to see 12 – 18 months of runway, allowing time for essential projects to finish before additional funding is required
- Total Assets – demonstrates to investors the tangible “book value” of your company and your ratio of assets to bank debt (as applicable)
- Cash And Cash Equivalents – demonstrate to investors the liquidity of your business and addresses whether you have sufficient cash and cash equivalents to meet urgent liabilities when they fall due
- Total Equity – demonstrates to investors the capacity of your company to finance future growth and expansion, as well as give investors a sense of how well your company generates cash
- Team Size – demonstrates to investors the scale of your human capital resources and needs
- Total Users – demonstrates to investors how large your client base is and gives a sense of how much of the target market you have captured
- Non-Financial KPIs – KPIs which are non-financial in nature, but are nonetheless core business drivers which may assist potential investors in analyzing and better understanding your company
We look forward to supporting you on your fundraising journey!
Don’t worry if it’s all a bit overwhelming at the moment, we also have a dedicated Customer Success team standing by at the ready to answer any questions you may have along the way.