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Startup Financial Models: Oleksiy Nesterenko Startup Finance

4 pages

Essentially financial modeling is the process of drawing up models of your finances (as you may have guesses) and this then allows you to see visualizations of where your finances are heading with time and so act accordingly to adjust this.

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Ajouté le : 14 mars 2016
Lecture(s) : 1
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Startup Financial Models: Oleksiy Nesterenko Startup Finance
Financial modeling is a term used in business and investing a lot. It is a large part of accounting and it is something that many of us in professional positions will be familiar with. However for those of us who only ever have to deal with our own money, înancial modeling may be a somewhat more foreign concept. Here we will look at what înancial modeling is, how to use it and how it will beneît you.
Essentially înancial modeling is the process of drawing up models of your înances (as you may have guesses) and this then allows you to see visualizations of where your înances are heading with time and so act accordingly to adjust this.
To understand the need and importance of startup înancial models, we îrst need to know what exactly it is that the înancial sector involves itself in. Financial institutions, such as investment companies, banks and
security îrms handle the Low of cash, the amount of which can often be of such a nature as to make it unpredictable. In some cases this amount is dependent on certain future conditions, as in equity or bonds. This makes the very nature of înancial transactions uncertain and unstable.
Choosing the right model
Oleksiy Nesterenko states that a particular context or decision should go in the actual realization of practical startup înancial models. This decision or context depends on the horizon within which it has to be located. Many businesses and other înancial activities require a limited horizon, while others operate within horizons that may stretch for weeks, months and maybe even years. Models that have been designed to work with continually and frequently changing data and processes would not be applicable in instances which are gradual and remain static for longer periods of time. Hence the need to choose the right type of înancial model is a crucial one.
Which models are good?
While the large number of uncontrollable factors make it diïcult for most startup înancial models to work as focused tools for predictions. However, these models can be used for various other purposes such as risk and proît assessment, projecting the values of assumptions that are made based on existing market conditions, calculating the margins that are needed to avoid adverse situations, and various forms of sensitivity analysis.Oleksiy Nesterenko believes these necessary to regulate minimum capital investment, capital allocation and measuring performance.
The best place to start a înancial model from is a profound understanding of the case that requires this model. The approach is partially fulîlled by those startup înancial models that contain parts of market behavior, but reality can often be vastly dierent from the theory that is to be followed. To understand fully the nature of all the forms of risk that the business might be exposed to, the înancial model should clearly reveal the possible areas of dependencies. These dependencies can be seen between dierent kinds of activities and between consecutive time periods. It is also helpful if the model explains the relationship between
asset types and types of business. In such a case, the way that the two sides of a balance sheet interact would be shown up clearly.
Some startup Inancial models
There are a number of startup înancial models available for various businesses and the particular situations that they encounter. Some of the more general înancial models are, comparative înancial analysis, cash Low forecasting and business plan models. These models look to setting up the best methods of controlling the cash that comes in and goes out. However, these are only very few of the models that are available and there are a number of business speciîc startup înancial models in the market to choose from.
Oleksiy Nesterenko is a co-founder of Afenest Advisory, a înancial advisory îrm that provides guidance to clients in areas of corporate înance, business strategy and M&A and has setup OEKSIY NESTERENKO. STARTUP FINANCE consultancy that provides the needed înancial and strategic insight that enables businesses to thrive.
Oleksiy Nesterenko Business Consultancy is assisting enterpreneur in developing business strategy and for their startups
Services include:
• Corporate înance including înancial modeling, creation of cap tables, fundraising, and M&A.
• Operational înance including analysis of key metrics, reporting, budgeting/forecasting, and investor relations.
• Business strategy including formulation of business growth strategies, and optimization of business processes.
Specialties:înancial reporting, înancial planning and Startups, analysis, business plan development, business valuation and analysis, capital raising, corporate development, M&A, acquisition tactics and strategy, and emerging markets expertise.
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