Start Up – “What Happened To My Money?”

An East Coast healthcare startup that had been operating smoothly came to Imperial Advisory confused after the founder/CEO noticed that the company needed frequent cash infusions to cover operating expenses. The CEO had successfully led the startup to a position where it was nearly profitable, so it was surprising to be facing massive cash flow issues. Unsure how to address this financial concern and with no official CFO staffed to handle the problem, the founder enlisted the help of Imperial Advisory to analyze the financial state of the company and help the startup devise a plan to attack cash flow issues to placate investors who had grown increasingly worried. 

The first step in finding a solution was to run a deep-dive analysis of the business and its expense drivers. This analysis revealed that the startup’s financial wellness was actually in a much better state than it had appeared, and the primary cause of investors’ and managements’ concerns stemmed from the way financial data was being interpreted and presented.

When misinterpretation is an issue, education is central to enabling better decision-making, so we worked closely with the CEO to segregate general marketing and overhead expenses from expenses that were directly related to customer acquisition. This was important because our initial deep-dive analysis revealed that the expenses tied directly to organizational growth were generating revenue that took months to materialize, which provided a clearer explanation for the business’ cash flow problem. We also built out a robust operating model that allowed the CEO to (a) seamlessly integrate financial projects with actual results and (b) generate a monthly dashboard featuring charts and graphs that lay out the financial state of the startup.

With this new information, the CEO was fully equipped to communicate the financial state of the company to investors and placate their concerns while continuing to run the business respon