How to: Finance Department in a start-up

How to build the finance department in your venture

Overview

A comprehensive Finance Department includes:

  1. Accounting
  2. Controlling
  3. Strategy and planning
  4. Fundraising
  5. Investor Relations.

The Accounting and Strategy & Planning divisions generate actual and plan data that is used by the Controlling and Fundraising departments. The Fundraising and Investor Relations divisions manage the fundraising process and relations with existing investors with the help of regular reporting.

1. Accounting Division

Preparatory monthly accounting

  • Preparation of relevant finance documents for tax consultant
  • Supporting the recurring tasks of tax consultant

Accounts payable and receivable accounting

  • Tracking of accounts payable towards creditors
  • Tracking of accounts receivable from debitors

Preparation of annual
financial statement

  • Consolidation of all other outputs for final annual statement
  • Preparation of the annual statement for audit

2. Controlling Division

Controlling of accounting division

  • Controlling of the accounting division and its internal processes

Analyze, interpret and report of financial data

  • Procession and presentation of actual financials
  • Identification and analysis of deviations
  • Forecasting future development and liquidity position

3. Strategy & Planning Division

Planning of financial
targets

  • Planning of financial development with an integrated financial model
  • Planning of financial targets, including limits to achieve them

Planning of necessary measures

  • Analysis of current situation and planned development
  • Planning of measures necessary to go from current to planned situation

Define relevant KPIs

  • Analysis of business model and planned development
  • Definition of relevant KPIs to base progress or deviations verification on

4. Fundraising Division

Contacting of investors

  • Direct contact with investors or contact through their portfolio companies
  • In the absence of a network and capacity, this task can be outsourced to external service providers

Provision of finance-related contact person

  • Investors need a point of contact for financial and valuation issues
  • Especially the financial model will be questioned critically by analysts
  • External financial service provider should be available as said contact person

5. Investor Relations Division

  • Investors are interested in the company development
  • Regular newsletter or reporting can be created to inform about developments

Achieve transparency

  • Having an overview over relevant investors (CRM) is necessary to manage the communication
  • Capable IR-management can support with that

Manage the investors

  • Establishment of an efficient IR management and information routine for investors
  • This will help securing a future follow-up financing

Secure follow-up financing

At Trustventure, we advise young companies on financial issues and offer CFO-As-A-Service. Our expertise in questions of corporate finance, planning and controlling creates transparency and security for you and your investors. Reach out to us via our contact form or write to us directly at office@trustventure.de.

Related articles

Lifecycle of a VC Fund

Eine Übersicht über die verschiedenen Phasen eines Venture Capital Fonds. Ein VC Fonds durchläuft drei Phasen: Fundraising, Investition und...

read more