Guest venture capital visit: Will Goodwin, Pembroke VCT
26 March 2018
Will Goodwin, University of Bristol alumnus and portfolio finance controller for Venture Capital (VC) firm Pembroke VCT, recently spoke with Postgraduate students at the Centre about forecasting start-up finances and funding requirements.
We recently had a great visit by Will Goodwin; a University of Bristol alumnus and portfolio finance controller for Venture Capital (VC) firm Pembroke VCT. Will was and is an entrepreneur in his own right as well, famously starting and selling a composting toilet business to the Glastonbury music festival whilst still a student.
Will came in to talk to our one-year taught masters students about how to forecast start-up finances and funding requirements. Getting the view of real investors is critical to providing an authentic picture of how you acquire funding for an emerging innovative venture.
Will shared a wealth of practical advice on how to assess and forecast start-up financing, including a host of examples and case studies drawn from his own experience on both sides of the entrepreneur-investor process. He highlighted that forecasting for start-ups is “more art than science” because there is no history of data to project from. As such you need to make a series of educated guesses.
Starting from predicting your costs rather than your revenues – because most entrepreneurs underestimate their costs, Will recommended. It’s also better to scale your revenues to cover your costs than scale your costs to match an assumed revenue. Do also provide sensitivity analysis on your forecasts and include an aggressive case, because that’ll often be the one that VCs want to see to test your ability to scale up rapidly.
He was able to reinforce both a lot of our teaching but also the advice we give on picking a funder whose ethos, vision, and aspirations fit will with your own ambitions as an entrepreneur. A VC looking for a multiplier of three on their investment will be quite different to work with than a VC looking for a multiplier of ten! Will also highlighted that VCs are also managing the expectations of their own fund investors as well as their investments in ventures – it’s a balancing act between the investors in the fund seeking their return, the ventures needing appropriate support, and the VC fund managers managing all those expectations.
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