-
Email
hello@thevaluecore.com -
Phone
+(02) - 094 980 547 -
Address
163 Parkhouse St PMB 6017 Dallas, TX 75207
Phone
+(02) - 094 980 547Address
163 Parkhouse St PMB 6017 Dallas, TX 75207
UK-based tech startup with a $2.1 million monthly burn rate and only seven months of runway faced closure or mass layoffs. We revamped their financial model, streamlined inventory management, and shifted their strategy to sustainable growth. Within five months, they reduced their burn rate to $1.3 million, secured a £50 million Series C funding round, and extended their runway. We now manage their FP&A function as an outsourced service, saving them 4x the cost of an in-house team.
A four-year-old UK-based tech startup faced a critical financial crisis. With a monthly burn rate of $2.1 million, their cash runway was down to just seven months. Investor talks were ongoing, but no deal seemed likely to close within their limited timeframe. The founders were at a crossroads—considering either shutting down the business or initiating mass layoffs of over 100 employees.
This is the story of how we stepped in, redefined their financial strategy, and transformed their outlook—helping them secure a £50 million funding round while extending their runway and positioning them for sustainable growth.
Ineffective Financial Model:
The business plan lacked depth and clarity, making it unappealing to investors.
Key metrics and assumptions were neither substantiated nor well thought out.
High Burn Rate with Poor ROI:
Approximately 40% of cash was spent on business development without a proper ROI analysis.
The saturated market rendered their hyper-growth approach unsustainable, with an annual churn rate of 12%.
Inventory Mismanagement:
Inventory levels were unpredictable, with no proper forecasting or predictive analysis.
Cash was tied up in excessive inventory, even though a supplier within the UK offered just-in-time inventory with similar credit terms.
Investor Confidence:
The financial outlook showed no profitability until year 5, making the business less attractive to investors.
We rebuilt their financial model using a bottom-up approach:
Scrutinized every number to justify its inclusion and aligned it with business objectives.
Identified areas where the company was leaving money on the table.
Shifted the focus from hyper-growth to a sustainable strategy:
Reduced the cash allocation for awareness campaigns from 40% to 15%.
Focused on reducing churn while maintaining a steady inflow of new customers.
Transitioned from stockpiling inventory to a just-in-time model with their UK supplier.
Implemented predictive analysis to maintain optimal inventory levels and free up cash flow.
Enhanced the financial outlook to show profitability by year 2 (instead of year 5).
Reengineered business processes and highlighted these improvements in investor presentations.
Weekly cash flow analyses and dashboards instilled confidence in the company’s financial discipline.
Runway Extension and Cost Savings:
Monthly burn rate reduced from $2.1 million to $1.3 million within five months.
This created an additional three months of runway, allowing the company to secure funding without disruption.
Successful Series C Funding Round:
The startup secured a £50 million deal on terms that matched the founders’ original expectations.
Ongoing FP&A Partnership:
We now manage the company’s entire FP&A function as an outsourced service:
Delivered significant cost savings—they would have spent at least 4x more on salaries alone for an in-house team.
Provided unmatched expertise and real-time financial insights through collaborative tools and dashboards.