Taking a good look at your financial situation

Your current financial situation includes your current cash flow, capital structure and existing claims on your (future) cash flow and a good and detailed financial plan. All these factors will need to be considered both for the transition for steward-ownership (if this is your plan) as well as in the future financing structure. For example,  claims from existing debt will need to be communicated and calculated in your repayment plan for investors. Existing investors will need to either be bought out or their capital will need to be restructured to fit steward-ownership and the next financing round. Claims from other stakeholders (including yourself) will need to be justified and evaluated against the claims of old and new investors. 

As this is not relevant to everyone, we have added further information on dealing with previous investors, stakeholder participation models and founder compensation which you can access if relevant for you.

Taking a look at your financial situation will also inform your future financial projections, e.g. developing a financial plan for the future. What is your path to revenue, what is your path to profitability, and how far away are you? When will the company become so successful that repayments of the investment can start? While financial projections are relevant for all financing rounds, it is even more important in steward-ownership aligned financing as it directly informs the financing scenarios possible for your company, e.g. which path to liquidity for investors is open, which redemption/structured exit scenarios could be part of the investment deal structure. 

This should get you started on working through stages 1) and 2) of your finance map!