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All financial projections for startups are based on a handful of financial assumptions. The problem is we tend to make very bad assumptions!

There are no "genius MBAs" out there building financial projections in a business plan that magically come true because they took a class on it. Financial assumptions, particularly for startups, are about making and refining a million tiny guesses until our financial performance gets somewhere close to our financial projections.

Everyone Guesses... and We're Usually Wrong

Startup financial projections are built around making a series of educated guesses about how things might go. Public companies make sales projections, issue projected income statements, and create revenue forecasts all the time. The diff...

A Startup's financial health isn't just about updating financial statements and balance sheets — it's about understanding basic business financials, and guess what? It's not that hard. This primer is designed for Founders and operators who know little to nothing about startup financials.

Intro: The Basics of Startup Finance

The fundamentals of startup finance are this simple – we record every income item (our goods sold) on one side and then record every cost (operating expenses) on the other side of our financial statements. We subtract the income from the costs – and voila! – profit (or a loss... in the early days it’s usually a loss.)

There’s no special black magic to recording income and expenses.

We don't need Complex Accounting Software (...

No matter how much we stand to lose, there is always a way to recover.

At the time it sure doesn't feel that way. Nothing keeps us up at night more than playing out every possible scenario of catastrophic outcomes for our startup. We think about the cost of losing our startup, our team, our investor's trust, and ultimately, our personal well-being.

And yes, all of this is super terrifying. But here's the thing, Founders have an amazing ability to recover from catastrophic losses because, in the end, we never consider the fact that the one thing we can't lose is our own tenacity.

It's important to think beyond the "monster in the corner" and play out the entire scenario of what a big loss means, looking all the way past to the other side of ...

Making prototypes in China is a cost-effective way to test your product idea before selling it to consumers, but it is a detailed process that takes a lot of work to initially set up. In order to get a prototype made in China, you need to have an idea of the steps needed to follow before getting your product in mass production.

In this article, we will explore what these steps are and how to go about them with extended insight from members of the Startups.com community.

What Is A Prototype?

A prototype is a preliminary model of a product which is used to demonstrate the product's form, fit, and function. Prototypes are made with the intent of testing out different aspects of a design to see how they work.

Prototypes help you make decisions abo...

Nearly every Founder feels woefully behind their friends in life.

As it happens, we picked a particularly shitty profession to ever feel "ahead" of our friends and colleagues. Most of our friends have regular jobs where they actually get paid every week, whereas we spend the entire month wondering if and how we'll get paid at all.

The problem compounds when we start to look at our successful Founder colleagues because the delta in success can be so astronomical so quickly. We start to assume that their successes become a reflection of our failures. But what we're missing in that comparison is how the benchmarks themselves are completely broken.

We Fight Ourselves

It all starts when we try to invent where we should be in life as if our pat...

A crypto startup is a business that deals with cryptocurrencies. Startups focused on this industry have been popping up all over the world in recent years. With the rise of Bitcoin, Ethereum, and other cryptocurrencies, many entrepreneurs are looking to create their own crypto or blockchain-based startup.

It sounds easy enough in theory, but for those new to the industry, it's much like learning another language. In this article, we aim to define, expand on, and share insights we have compiled to demystify the process of launching a crypto startup.

There are five main steps to starting a crypto startup (we'll expand more on this below):

1. Identify a problem that needs solving.

2. Create a white paper outlining the idea (i.e. a solution to the...

Becoming a startup CEO requires zero qualifications — that's because we're often not really CEOs (for those that don't already know, a CEO is the chief executive officer of a company).

Anyone who founds a company is by default the CEO. My 9-year-old daughter incorporated her pet-sitting business and is technically its CEO. But she doesn't walk around comparing herself to Jeff Bezos.

As Founder-CEOs, we need to have a very sober outlook on our new title and as such, so do all of the people around us. After all, a successful startup CEO is responsible for more than a "company builder" — they are expected to create the company culture, form the leadership team, and keep everyone in the org moving in the right direction. We basically need to take...

A capitalization table or "cap table" is a record of the equity ownership and actual ownership percentage of each member of the company. Private companies typically develop a cap table when they are first formed to capture the stock ownership of the co-founders and then later begin recording stock ownership of employees, advisors, and investors.

Why do Startups need Cap Tables?

The moment the number of shares in our startup expands to more than one owner, we typically create the company's cap table. This is just a ledger of where the company's ownership stands and can be captured in something as simple as a spreadsheet.

As our startup expands, cap table management becomes more complex, such as when we take on a funding round with a venture cap...

Startups use their elevator pitch to quickly communicate their startup idea and value proposition in one or two sentences.

In our previous idea validation lessons, we focused on the importance of taking your initial idea and defining your problem, particular market, advantages, and customer needs. Now it’s time to refine those learnings into a polished Elevator Pitch and continue our startup idea validation.

The heart of every great Elevator Pitch includes 4 essential components:

ONE Nail The Problem

As we learned, great business ideas start with a well-defined problem and the ability to identify how painful that problem is. Now, we’ll concentrate on how to effectively articulate it in your elevator pitch.

TWO Explain The Solution

You’ve zeroed i...

Intro to the Customer discovery process

Up to this point, we’ve made sure that there is a problem in the market for your business idea to solve through idea validation research and notable experts have verified that you’re on the right path. Now we begin the last test of the business idea validation process — customer discovery.

We’re using customer discovery as a methodical approach to ensuring the product idea you’ve identified aligns with what potential customers actually want at a price they are willing to pay.

Key Takeaway

Use idea validation to confirm that the problem, solution, and revenue model aligns with what potential customers really want.

Customer Discovery

Customer Discovery centers around 3 critical pillars of your business model ...