www.startuphand.org/2023/04/30/the-different-stages-of-funding-in-venture-capital
The financial complexities can be overwhelming when you first start your own business. Having a clear understanding of key startup financial terms is crucial for making informed decisions and managing resources effectively.
Basic Bookkeeping: Accurate records are the foundation of financial planning. It is a necessity for any business that wishes to obtain funding from investors or lenders. This includes GAAP certified financial statements (income, expenses) cash flow, a balance sheet.
Revenue & Costs – Monitoring and tracking operating expenses, revenue, as well as other expenses is an essential element of the financial startup fundamentals. This process aids startup founders manage customer acquisition, customer churn, as well as revenue growth. It also helps them understand impact of pricing for customers and product features, as well as other factors on their bottom line.
Financing: Startups depend on personal loans and credit cards to finance their operations. This option can be costly and dangerous for startups, especially when the company fails meet repayment obligations. Alternative forms of financing for startups include business line of credit, equipment leasing and crowdsourcing platforms.
Cash Flow: A startup must to be able forecast its cash flow at any point in time. This isn’t easy for companies that invoice annually or in arrears according to usage, but aren’t able to provide a precise picture of their cash situation over a period of time. Making payments more efficient as well as ensuring that vendor payments are timely, and accurately recording ownership of equity can aid startups in avoiding cash flow issues.