Dani Hao from The Spend Culture Stories Podcast speaks with Debbie Rosler, on-demand CFO for Burkland, about financial scenario planning for startups.
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.