S3 Operating Model Template
As you might imagine, when the S3 Team is meeting with entrepreneurs and founding teams, funding needs are a common topic. When raising money, entrepreneurs should always be prepared to answer the question “How much money do you need, and how far will that get you?” Very often, the answer is “We need $X million dollars in funding to accomplish these goals: X, Y & Z.” As investors, that is the answer we want to hear. Unfortunately, quite often when we begin to dig into the “why” behind that answer, it becomes less clear and a lot of time is spent between investors and the management team getting to the right answer. Too often, the number is much higher or lower than the original “$X million” answer.
We understand that as entrepreneurs, you have a lot going on – building your product, hiring an “A” team, signing up new customers, raising money, etc. Many times, building a financial model to forecast operating expenses and cash needs gets pushed further down the list, especially if you do not have a financial background. This creates a problem when investors begin to look into the detail behind the numbers and expenses during diligence. Not having a solid operating model in place delays diligence time as investors attempt to get a handle on the cash needs. This can be crucial time for a cash-strapped company. The S3 Ventures operating model templates are free resources that we hope will help entrepreneurs accomplish two goals:
1. Better understand their business and the expenses involved to get cash flow positive
2. Streamline the diligence process during fundraising, saving valuable time
S3 hopes entrepreneurs will be able to utilize this tool to get an accurate, granular view of their business expenses, revenue model, and overall cash needs of the business. We attempted to make the templates simple, with the templates applicable to the 5 most common business models that we typically see: Enterprise SaaS, Enterprise License Software, Medical Device, Consumer SaaS, and Consumer Marketplace companies. Each model generates Balance Sheet and Cash Flow statements with very few inputs. The models do not include capital expenses (or the depreciation associated with them) or inventory management.
The S3 Team hopes these templates help you with your business, but we know they are not perfect. If you have suggestions on improving the models or other feedback, please email us at firstname.lastname@example.org. Unfortunately, due to the volume of emails we get, we may not be able to respond to support questions. The S3 Team wishes you well in growing your business! Please submit your business plan and financial model through our website to contact us about funding.
Depending on your company’s business model, here are five operating model templates from which to choose: