Artifacts #
What this step produces.
Unit Economics Model #
A model of revenue and cost for one customer or unit sold, showing whether each sale earns or loses money.
Investment Analysis #
An analysis of whether the expected returns justify the money invested, using measures such as ROI and NPV.
Burn Rate Projection #
A forecast of how fast the startup spends its cash and how many months it can operate before funds run out.
Funding Scenarios #
Alternative ways to finance the startup, such as own funds, investors or loans, compared by amount, timing and dilution.
Techniques #
Techniques used in this step.
Unit Economics #
Measuring profit and cost per customer or unit to check that the business model can earn money as it grows.
Customer Lifetime Value #
Estimating the total profit a customer brings over the whole relationship, to judge how much can be spent on acquiring them.
Customer Acquisition Cost #
The average amount spent on marketing and sales to win one new customer. It shows whether growth is affordable when assessing the startup's investment case.
LTV:CAC Ratio #
Compares the total value a customer brings over their lifetime with the cost of winning them. A healthy ratio shows investors that each customer pays back.
Net Present Value #
Adds up all expected future cash flows, discounted to today's money, minus the initial investment. A positive result means the project creates value.
Internal Rate of Return #
The discount rate at which a project's net present value becomes zero. It is compared with the required return to decide whether the investment is worth making.
Payback Period #
The time needed for a project's returns to cover the money invested in it. It gives a quick view of how long capital is at risk.
Burn Rate and Runway #
Burn rate is how much cash the startup spends each month; runway is how many months the remaining money will last. Together they set how much funding to raise.
Funding Scenario Planning #
Working out how the venture develops under different funding amounts and timings. It shows what each round of money buys and what happens if it does not arrive.
Sensitivity Tornado Diagram #
A bar chart that ranks assumptions by how strongly each one moves the result. It shows which inputs matter most and deserve the closest attention.
EMV (Expected Monetary Value) #
The probability-weighted average of possible financial outcomes. It lets you compare uncertain options with one number and is used to judge the value of each choice.
Investment Scenario Tiering #
Grouping investment scenarios into levels, such as minimum, base and ambitious, each with its own funding and expected result. It makes the choice of investment size clear.
