Financial History
Financial Forecasts
- Sometimes called pro formas
- Balance sheet
- Income statement
- Cash flow statement
- 1-3-5-7 year projections (depends on length of project)
- For loans, repayment period determines length of projections, i.e. a six month loan doesn't need seven year forecasts
- For investments point at which returns stabilize (terminal value) determines length of forecast
- Annual, quarterly, and monthly versions should be provided
- Graphs of key values often helpful: gross revenue, EBITDA, NPV, etc.
- Financial portions of the marketing, asset development, and operations are often placed in this section rather than in the section discussing the plan. They are viewed as elaboration on the various line items in the pro-formas.
Valuation
Risk analysis
For more information, see risk analysis.
Risk Evaluation
- Market risks - lack of surgeons; large geographical area so that we don't compete against our own clients;
- New entrants to market
- Ease of entry
- Potential threat to market share- advertising companies
- Slower than expected adoption
- Operational risks
- Staffing risks- imbedding the right candidate for the right surgeon
- Availability of skilled workforce- x-pharma reps, x-equipment reps
- Union issues
- Financing risks
- Liabilities
- Poorly worded investor contracts at risk for litigation
- Investor pull-out
- Lack of follow-on funding to complete project
- Managerial risks
- Poor board or investor dynamics
- Agency risk particular to the venture
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