Biniyog Briddhi Conducts Its Second Investment Readiness Booster Workshop for Five Key Ecosystem Builders

The Investment Readiness (IR) Booster Workshop was delivered to participants from five key ecosystem builders in Bangladesh

As a follow-up to the first Investment Readiness (IR) Booster Workshop held in March, the Biniyog Briddhi (B-Briddhi) programme organized a second session in its continued support of fostering the impact ecosystem in Bangladesh. The workshop was conducted with five ecosystem builders on August 6, 2023.

The core focus of the workshop was to enhance the Investment Readiness knowledge and skills of the service providers, particularly in financial modeling and valuation. The workshop was attended by five service providers Bangladesh Angels Network, BetterStories Limited, Startup Chattogram with De Tempete Limited, Turtle Venture and Truvalu.enterprises.

This workshop was designed to provide participants with a comprehensive understanding of financial modeling and analysis in the context of business and investment decision-making. Over the course of four sessions, participants were introduced to essential concepts and tools used in financial modeling and gained insights into interpreting financial data from an investor’s perspective.

Participants were also tasked with an interactive group activity, where they developed financial models based on case studies developed by the LightCastle team. Based on the information provided, participants built their own assumptions and integrated them into an excel worksheet which was later presented to the wider audience.

The key takeaways from the session have been summarized below:

1. Financial Modeling Beyond Investment: Financial modeling is not limited to raising investments; it serves as a crucial internal management tool for decision-making within businesses.
2. Structuring Financial Models: Financial models can be organized effectively by keeping an assumptions worksheet separate from financial statements (Income Statement, Balance Sheet, Cash Flow Statement). Any changes in assumptions should automatically update the financial statements.
3. Ratios for Business Performance: Maintaining a separate sheet for ratios helps track business performance and serves as a sanity check for the entire model. Regularly updating the forecast to reflect actual business conditions is essential.
4. Understanding Key Concepts: It is critical to have a clear understanding of vertical and horizontal analysis to evaluate changes in revenue and costs over time. Enterprises must ensure the financial model is growth-driven and adaptable, even in the early stages of a business with relevant indicators such as customer numbers.
5. Defining Impact Metrics and KPIs: Incorporating impact metrics allows for a more comprehensive evaluation of a company’s performance. By identifying and focusing on key performance indicators (KPIs) in categories like financial health, customer relations, sales & marketing, human capital, capital budgeting, and impact. Simple and easily understandable metrics are essential for effective decision-making, such as settling on north star metrics that are appropriate for each impact enterprise.  They are better positioned to respond to changing consumer preferences and regulatory trends, which can be a significant driver of growth.

To conclude the workshop, Asif Khan, CFA, conducted an open Q&A session where participants were encouraged to ask any questions about financial modeling and valuation for impact enterprises. This interactive segment allowed attendees to glean valuable insights from an esteemed industry expert, shedding light on strategies for enhancing financial management within enterprises, which serves as a complementary asset to both investment raising and decision-making processes.

Biniyog Briddhi is a multi-year program, supported by the Embassy of Switzerland in Bangladesh and implemented by Roots of Impact and LightCastle Partners. Set up as a public private development partnership (PPDP), the programme strives to improve the financial, social, and environmental performance of impact enterprises by helping them to master investment readiness and impact management and get ready to access innovative finance to scale.