DHQI Education for Founders

The fundamentals: what corporate finance is, how to read the three core reports, and how to use them to plan, raise, and tell your financial story.

1. Introduction to Corporate Finance
   • What corporate finance is
   • Why you need to understand your company's financial information
   • How to read your company's financial reports
2. What the Three Reports Tell You
   • What your balance sheet tells you about your business
   • What your profit and loss statement tells you about operations
   • What your statement of cash flows tells you about liquidity
3. Budgets and Projections
   • What a projection is and how to use it to manage operations and raise funds
   • What a budget is and how it works
4. Equity
   • Structuring your company's equity offering
5. Performance Analytics
   • Interpreting your company's performance analytics
6. Financial Storytelling
   • Talking about your company's financials

Who owns what, how that changes with each round, and who gets paid in what order when there is finally something to distribute.

1. Introduction to Cap Tables
   • Definition and purpose of a cap table
   • Shareholders, shares owned, and ownership percentages
   • Common versus preferred shares
2. Why Cap Tables Matter
   • Tracking ownership dilution
   • Funding rounds and their implications
   • Preparing for discussions with investors
3. Understanding Waterfall Models
   • Definition and purpose of a waterfall model
   • Liquidation preferences and participation rights
   • Distribution order
4. Waterfall Model Breakdown
   • The structure of a waterfall
   • Tiers: debt holders, preferred shareholders, common shareholders
   • Seeing the distribution laid out visually
5. Practical Applications
   • Building a cap table: tools and software
   • Best practices for maintaining and updating it
   • Modeling different exit scenarios
6. Case Studies
   • Cap tables behind companies that raised well
   • Liquidity events and how the proceeds were actually distributed
   • Lessons from real outcomes

How to run a raise: the stages, the materials, the conversations, the terms, and what to do with the money once it lands.

1. Introduction to Fundraising
   • What fundraising is and why it matters for startups
   • Funding sources: bootstrapping, angel investors, venture capital
2. The Stages of a Raise
   • Pre-seed: funding the idea
   • Seed: validating the business model
   • Series A: funding the scale-up
   • Series B and beyond: expansion and diligence readiness
3. Crafting Your Pitch
   • A clear problem, solution, and value proposition
   • Market opportunity and competitive landscape
   • Financials and the ask
   • Holding up under questions and objections
4. Building Relationships with Investors
   • Networking, events, and warm introductions
   • Keeping investors updated on your progress
   • Being transparent about challenges as well as wins
5. Navigating the Process
   • Term sheets: valuation, equity, dilution
   • When to bring in legal advice
   • Closing the deal
6. After the Raise
   • Deploying capital against your plan
   • Monitoring cash flow and adjusting
   • Positioning for the next round

What your company is worth, which method produces that number, and how to defend it when someone with capital pushes back.

1. Why Valuation Matters
   • What a valuation is — and what it is not
   • Where it shows up: raises, option grants, transactions, disputes
   • Pre-money versus post-money
2. The Financials Behind a Valuation
   • Normalized earnings and defensible add-backs
   • Revenue quality: recurring versus one-time
   • Working capital and net debt
3. Market-Based Methods
   • Comparable company analysis
   • Precedent transactions
   • Choosing a multiple and defending it
4. Discounted Cash Flow
   • Building the forecast the model runs on
   • Discount rates and terminal value
   • Where DCF breaks down for early-stage companies
5. Early-Stage Valuation Methods
   • Scorecard and Berkus approaches
   • SAFE and convertible note caps as implied valuation
   • Why the priced round rarely matches the model
6. What Moves Your Valuation
   • Growth rate, margin, and retention
   • Customer concentration and owner dependence
   • Market conditions and comparable transactions
7. Building the Valuation Narrative
   • Reconciling the number to the story
   • Defending assumptions in diligence
   • The ways founders most often overreach

The other side of the table: how investors make money, what they screen for, and why the same pitch lands differently with each type.

1. Who Is on the Other Side of the Table
   • Angels, syndicates, venture funds, family offices, strategics
   • What each one is actually optimizing for
   • Why one pitch cannot serve all of them
2. How a Venture Fund Makes Money
   • Fund size, management fees, and carry
   • The power law and why a fund needs a 10x
   • What "not venture-scale" means, and why it is not an insult
3. What Angels and Family Offices Want Instead
   • Personal capital and different return horizons
   • Strategic and operational motivations
   • When patient capital beats venture capital
4. Investment Criteria and Screening
   • Stage, sector, geography, and check size
   • How deals actually get sourced and filtered
   • Why most rejections are about fit, not quality
5. How Investors Diligence You
   • What they verify, and in what order
   • Metric definitions they expect to be consistent everywhere
   • The questions that end conversations
6. Reading the Terms They Offer
   • Liquidation preference, pro rata, board seats, control
   • What each term costs you at exit
   • The terms that matter more than valuation
7. Managing the Relationship
   • Investor updates that build trust
   • Delivering bad news well
   • Positioning for the next round from day one

Turning your books and operating systems into a small set of numbers you actually run the company on.

1. What Business Intelligence Means for a Small Company
   • Decisions first, dashboards second
   • Why most early-stage BI projects fail
   • What you actually need in year one
2. Where Your Numbers Come From
   • The general ledger as the source of truth
   • Operational systems: CRM, billing, payroll, inventory
   • Reconciling operational data back to the books
3. Choosing the Metrics That Matter
   • Leading versus lagging indicators
   • Defining a metric so it means one thing
   • Metrics that reliably mislead
4. Building the Reporting Layer
   • Spreadsheets, BI tools, and when to graduate
   • Refresh cadence tied to your close calendar
   • Keeping one version of the truth
5. Designing Reports People Read
   • The one-page operating view
   • Trend versus point-in-time
   • Making variances impossible to miss
6. From Reporting to Decisions
   • Running a monthly operating review
   • Assigning an owner to every metric
   • When a number should trigger an action

What it actually costs to deliver what you sell, which lines of business earn their keep, and what breaks when you scale.

1. How Your Cost Structure Actually Works
   • Fixed versus variable, direct versus indirect
   • Cost of goods sold versus operating expense
   • Why misclassification hides your real margin
2. Mapping Cost to Process
   • Where money is consumed in delivering your product
   • Identifying the steps that drive the cost
   • Capacity and utilization
3. Unit Economics
   • Fully loaded cost to serve
   • Contribution margin per unit, customer, or job
   • Which lines of business earn their keep
4. Pricing Against Your Costs
   • Breakeven by unit and by revenue
   • What a price change does to margin and volume
   • Discounting and what it really costs
5. Finding and Fixing Waste
   • Rework, idle capacity, and shrinkage
   • Spend that no longer buys anything
   • Prioritizing by size, not by irritation
6. Scaling Without Losing Margin
   • Which costs step, and when
   • Modeling the next stage of growth
   • What to automate, outsource, or hire

Managing the supply side as a cash decision: terms, timing, concentration risk, and the controls that keep payments honest.

1. Vendors as a Cash Decision
   • What vendor management protects: cash, quality, continuity
   • Mapping your spend by vendor
   • Concentration risk on the supply side
2. Selecting and Evaluating Vendors
   • Defining requirements before you shop
   • Comparing proposals on total cost, not price
   • Diligence proportional to the spend
3. Negotiating Contracts and Terms
   • The elements of a vendor contract that matter
   • Payment terms as a form of financing
   • Renewal, escalation, and exit clauses
4. Payables and Working Capital
   • The payables cycle and days payable outstanding
   • Timing payments without damaging relationships
   • Early-payment discounts: when they are worth taking
5. Controls and Fraud Prevention
   • Approval thresholds and segregation of duties
   • Duplicate payments and unidentified vendors
   • Reconciling vendor statements
6. Performance and Risk
   • Setting vendor metrics and reviewing them
   • Addressing underperformance
   • Continuity planning for critical suppliers

What each customer is worth, what they cost to win and serve, and how quickly their revenue turns into cash in your account.

1. What a Customer Is Worth
   • Revenue versus contribution versus lifetime value
   • Segmenting customers by profitability, not size
   • The customer who costs more than they pay
2. Acquisition Cost and Payback
   • Fully loaded cost to acquire
   • Payback measured in cash, not bookings
   • What you can afford to spend to win a customer
3. Retention, Churn, and Expansion
   • Measuring retention honestly
   • Expansion revenue and net retention
   • Where churn shows up in the financials first
4. Concentration Risk
   • When one customer carries the business
   • Quantifying the exposure
   • Reducing it deliberately
5. Credit and Collections
   • Setting credit terms
   • Days sales outstanding and the receivables aging report
   • A collections process that keeps the relationship
6. Turning Receivables into Cash
   • Incentives, deposits, and milestone billing
   • Factoring and receivables financing: the real cost
   • Forecasting collections into your cash plan