Introduction- What Is SMASH:
SMASH, an award-winning mediatech startup for under-represented creative communities. Their mission goes beyond the norm—aim to harness the power of data and artificial intelligence to pave commercial pathways for those often left at the sidelines of success. SMASH has secured government innovation grants, angel investors, and private equity, and is on its way making noises among the content industry.
Navigating the competitive waters of the mediatech industry, SMASH has grappled with many challenges that startups often face. From honing a technology strategy for meticulous business and financial planning, from securing funds to assembling a team that embodies the spirit of innovation while focus on product market fit, the journey has been anything but simple.
As SMASH charts its course towards the future, the founders found A&H consulting in the best place help them to tackle the new challenges and seize opportunities.
Goal: Gearing Up for Seed Funding
The project was to equip SMASH with the necessary tools and knowledge to secure seed funding from high net-worth individuals, and institutions.
As newcomers to the intense arena of technology business finance, the founders of SMASH were on their first formal investment round beyond the comfort zone of friends-and-family contributions.
The mission was twofold:
- To distill the founders’ extensive media expertise and the appealing mediatech vision, and roadmap into a compelling financial narrative;
- To translate the nuances of technology business economics into a robust financial model and cap table that would stand up to the scrutiny of savvy investors.
We wanted to be sure that SMASH not just ready to raise capital, but boost their confidence in explaining their vision and value with investors in the future. Having already secured initial funding through grants, SMASH was at a pivotal juncture, transitioning from grant-based funding to the complex world of equity fundraising.
Background: Domain Experts Seeking Financial and Technical Acumen
The foray of SMASH into the intricate world of technology business finance was not unsimilar to the challenges that other startups in this funding stage face; each step presented new challenges and untapped opportunities. The founders, Fiona Gillies and Christine Hartland, each had very strong media creative and innovation backgounds in their own right. Fiona, with her extensive experience in acting and producing, had established herself as a respected educator and thought leader. Christine has made a name for herself with hit productions like the intense political drama ‘WMD’ and the suspenseful thriller ‘CONTAINMENT,’ showcasing her talent for creating gripping stories for the screen.
Despite their commendable track records in media, both founders encountered unfamiliar territory when it came to the financial aspects of running a technology business. They struggled with questions that went beyond their expertise in project budgeting and delved into the complexities of modelling valuations and the intricacies of technology business growth.
When we first connected, we were presented with a trio of fundamental questions that underscored their quest for knowledge and readiness for investment:
- Valuation: The critical question of “How much is our business worth?” loomed large, with the founders seeking to understand the principles behind this crucial figure.
- Financial Literacy: Both founders expressed a pressing need to grasp the finance jargon and concepts that would inevitably arise in discussions with investors, aiming to converse confidently.
- Deal Structuring: Lastly, as both founders anticipated negotiations, they required having a deep understanding on their growth insights into the nuances of deal-making. So they can navigate the give-and-take of investment discussions with the benefit of knowing how their own tech/product roadmap project the financial growth by heart.
Approach and Strategy: Our Collaborative Journey with SMASH
SMASH was poised for a significant transformation, ready to blend their creative goals with the solid structure of commercial and financial strategy. Here’s the path we took with them, step by step.
- Merging Tech with Business Strategy: We started by closely with SMASH to review the technology landscape, making informed decisions about their product, choosing the right vendors, and building a solid team. It wasn’t just about making connections; we were there to create a strategic map for their journey.
- Balancing Bits and Budgets: We dove deep into the details of technology costs, breaking them down into clear, manageable pieces. This helped SMASH understand how their technological decisions would impact their finances, ensuring that every choice made sense for their bottom line.
- Fostering Financial Finesse: Our focus then shifted to practical guidance. We walked the founders through the financial aspects of their business model, preparing them for the kinds of questions investors might ask. Our goal was to equip them with the knowledge and confidence to discuss user acquisition costs and other financial metrics like seasoned CFOs.
- Demystifying the Dollars: Finance can be complex and be isolated from technology and product features. In A&H, we made it accessible and helped founders connecting the dots. In our conversations, we decoded business valuation, essential metrics, and the importance of profitability and EBITDA for sustainable growth. Our coaching aimed at empowering the founders to engage in thorough discussions about their finances with any expert.
- Crafting Financial Narratives: The final step of the journey was about more than modeling finances, we combined the steps we took to make sense of the numbers. We listened to the stories the founders wanted to pitch to the investors. Then, we ensured that Fiona and Christine could envision their company’s future through the financial forecasts. We helped them understand not just the ‘what’ but also the ‘why’ behind the numbers, so they could meet investor inquiries with insight, backed by solid financial statements.
Outcomes: Tangible and Intangible Gains
Tangible Triumphs:
- Seed Capital Success: Together, we bridge the gap between technology and financial structuring, leading to SMASH raising a round of SEIS capital. The founders hit their raise target, a testament to a well-crafted investment case.
- Strategic Financial Structures: Recognizing the need for a short-term financial bridge, we introduced the convertible note concept to the founders. This strategic move not only covered immediate product development costs but also set the stage for a valuation spike for further funding rounds.
- Preparing for the Next Chapter: With seed funding and convertible note secured, SMASH is now poised for raising EIS capital, armed with a clearer direction and a stronger foundation for future negotiations.
Intangible Insights:
- Mastery of Pitching The Vision Narrative: The most striking transformations we’ve witnessed is how the founders’ confidence has soared when discussing their venture. With a newfound understanding that connects the dots between technology and finance, they’re now navigating investor meetings with a solid command of their business narrative. This isn’t just about knowing their numbers; it’s about telling a holistic story where their product vision and technological innovation are seamlessly interwoven with their financial strategy.
- From Financial Intimidation to Conversational Command: Our discussions and workshops have transformed financial intimidation into financial fluency for the founders. They now possess the insight to navigate initial investor inquiries and the acumen to park deeper financial questions for later discussions.
- Building Stronger Connection With Future Investors: This newfound confidence has ripple effects beyond individual meetings. It enhances their ability to connect with tech teams, investors, and stakeholders, fostering relationships built on mutual respect and understanding.
Last But Not Least, Our Journey With SMASH:
- Collaborative Crafting: The journey began with an intensive period where we rolled up our sleeves alongside SMASH’s team to understand their technology and product goals to build a financial model and cap table. This wasn’t a detached exercise but a collaborative effort that distilled the essence of their business into a practical and potent financial tool.
- Simplifying Complexity: We focused on creating a near-cash model that captured their business’s heart. This approach allowed us to bypass unnecessary accounting complexities in favor of clarity, direction, and growth potential — a model that spoke in the language of possibilities rather than just ledgers.
As SMASH continues on their upward trajectory, we at A&H Consulting remain committed to empowering founders with our experience and insights to navigate the entrepreneurial seas with confidence.
Whether it’s clarifying the nuances of financial metrics or aligning technology strategy with business goals, our collaborative approach is designed to turn visions into reality. Reach out to A&H Consulting. Let’s embark on this journey together and craft your success story.
