Sports Betting Startup | Early-Stage | VC-Backed

The client, a sports betting startup with roughly $1.5mm in ARR, had recently secured a $4mm seed funding round but was struggling with cash flow management and revenue forecasting. 

Their business model relied on both SaaS and transactional revenue components. The investor model accounted for forecasting of the subscription-type business, but failed to incorporate the details of a much more nuanced transactional component. 

The company lacked the resources to hire a full-time CFO but required immediate financial expertise to build investor confidence.

Our Approach:


Topstone Advisory worked with the startup on a part-time basis, focusing on strategic financial planning, operational efficiencies, and investor update materials.

Key actions included:

  1. Cash Flow Optimization:

    • Built a 13-week rolling cash flow model to provide real-time visibility into the cash runway.

    • The model incorporated an unpredictable transactional revenue component.

  2. Revenue Forecasting:

    • Created a dynamic financial model incorporating recurring and one-time revenue streams, churn rates, and upsell potential.

    • Improved forecasting accuracy, enabling the leadership team to make data-driven decisions.

  3. Ongoing Investor Updates: 

    • Developed a compelling investor update deck with detailed financial projections and comparison to budget.

    • Incorporated several scenario analyses that most interested investors, with the ability to run A/B test comparisons on revenues. 

  4. Operational Improvements:

    • Implemented a robust KPI dashboard to track key performance metrics, both internally and externally.

    • Streamlined financial reporting processes, generating easy-to-update financial reports for venture capital investors. 

Outcome:

  • An easy-to-update financial model for a very lean startup management who needed visibility into their runway.

  • Increased investor confidence with clear, professional financial presentations and reporting.

  • Positioned the startup for growth, clearing showing that the transactional revenue was more important to the company’s financial performance and growth.