Funding
Funding
Embedded Files
How much do we need?
How much do we need?
One of the biggest problems facing new businesses is having enough cash to cover their running costs until they become profitable (and cash flow positive).
Businesses need to predict how much startup capital (money) they will need to cover this time.
Profit
- What is left over from revenue after all expenses have been paid for.
Cash Flow
- The movement (or flow) of money into and out of a business.
- Positive cash flow means the business is receiving more money than it is spending; Negative cash flow means the business is spending more money than it is receiving.
- It is possible to make a profit while recording negative cash flow (eg if you are spending a lot of money on equipment, research, product development, etc).
Example
Example
Uber
Uber has grown rapidly since it's launch 10 years ago, but is still yet to make a profit. In 2018, Uber lost over $3b!
This article provides details:
It is using a combination of debt and equity investment to cover the losses.
Netflix
Netflix is in a similar position, spending a lot of money on new content but not receiving enough new subscribers to cover the additional costs.
This article provides details:
Free Cash Flow
Free Cash Flow
The idea of free cash flow provides a measure of how much cash a business has after spending on
Report abuse