Rosler starts out talking about how startups are raising capital at this time and how to extend your startup’s financial runway.
5 Step Approach to Financial Scenario Planning
- Identify key uncertainties.
- Bucket uncertainties into three buckets; for example, best, worse, and base/most likely cases.
- Craft responses to each scenario.
- Look for trigger points. This means designating when you should move from one case to the next.
- Cycle back, revisit, revise, and repeat. Scenario planning is cyclical and requires regular updates.
This 5 Step Approach is based on the Founders Field Guide for Navigating this Crisis by First Round.
Related Tools & Advice
All of the resources below and more information are available via Rosler’s 3-part blog series available here. Recommended scenario planning tools include:
A Visual Framework – Sequoia Capital created this Matrix for COVID-19, which provides a useful framework for evaluating the range of decisions companies are facing.
Basic 3 Year Financial Model – Build it monthly to monitor your cash runway.
Waterfall Analysis – Keep track of your metrics with a waterfall model. All of these resources and more information are available via Debbie’s blog series here.