# Case: a one-page finance memo for the next round > The numbers an investor asks for, and a recommendation on how to fund growth. - Course: [Finance for Product People: From Unit Economics to Business Cases](https://productovi.com/courses/finance-for-product.md) - Module: Which costs matter for this decision? - Lesson 32/32, ~42 min - Source: https://productovi.com/courses/finance-for-product/funding-memo-case ## One page for the investor **Alex Tutor:** One last job on Klasna's product team: an investor is interested, and Leo needs a memo. **Leo:** The investor liked our call. Before their partners meet, they want a one-page memo: what we need, why, and what the money will do. **Hanna:** One page means every number has to earn its place. Here's the EU plan by quarter: what we spend, and the contribution new EU learners bring back, in a base and a weak case. **Dataset (CSV):** [Klasna's EU growth plan, Sep 2026 – Aug 2028](https://productovi.com/datasets/finance-for-product/funding-memo-case/klasna-eu-growth-plan.csv) Eight quarters of the project, on top of the existing business. Investment: ads, partnerships with weekend schools and two EU-facing hires. Contribution: what new EU learners leave after tutor payouts, fees and video. UAH. - `quarter`: Quarter of the project, q1 to q8 - `first_month`: First month of the quarter - `last_month`: Last month of the quarter - `investment_uah`: Cash spent on the expansion in the quarter - `contribution_base_uah`: Contribution from new EU learners, base case - `contribution_weak_uah`: Contribution from new EU learners, weak case **Alex Tutor:** Two ways to size an ask are on the table. Pick one before we compute anything. > **Exercise:** Klasna's EU plan spends 8,800,000 UAH over eight quarters, while new EU learners start bringing contribution back from the first quarter. How should Klasna size the amount it asks the investor for? **Alex Tutor:** The first thing any investor asks: how much do you need, and when? It isn't the total spend. It's the deepest point of the cumulative cash line. **Sofia:** So quarter by quarter I take contribution minus investment, keep a running total and look for its lowest point. **Alex Tutor:** Exactly. Start with the base case. > **Exercise:** Use the dataset. In the **base case**, what is the project's peak cash need: the deepest point of the cumulative (contribution − investment) line? Enter it as a positive number. ## Raise for the weak case **Sofia:** Base case: the line bottoms out at the end of the first year and is back above zero only in the last quarter, at +1,150,000. **Alex Tutor:** Now the weak case. The base case is what you pitch; the weak case is what you have to survive. You raise for the weak one. **Hanna:** And add my rule: a project never eats the company's last million. One million of buffer on top of the deepest point. > **Exercise:** Use the dataset, **weak case** this time: contribution from new EU learners in the weak column minus the investment, quarter by quarter. What is the project's peak cash need, the deepest point of the cumulative line? Enter it as a positive number, without any buffer. **Sofia:** 4.5 million plus the buffer is 5.5 million. The investor's 6 million covers even the weak case, with 500,000 to spare. **Alex Tutor:** One more look at the weak line before we move on: where does it end? > **Exercise:** Use the dataset. In the **weak case**, where does the project's cumulative cash (contribution − investment) stand after all eight quarters? Enter a shortfall as a negative number. ## What doesn't belong on the page **Leo:** Let's ask for 6.65 million instead. We spent 650,000 on EU market research in the spring; that money should come back to us. **Alex Tutor:** That's the sunk cost again, in a new outfit. The research is paid whatever the investor says. The round funds what lies ahead. **Hanna:** Same for overhead. The plan has only costs that exist because of the EU. The office and my team are there either way. > **Exercise:** Leo wants to ask for 6.65 million, adding the 650,000 already spent on EU research. What should the memo do with that 650,000? ## Why not the bank's money? **Sofia:** The bank also offered 6 million. What if we took the loan instead? **Alex Tutor:** Run the weak case again with the loan's interest: 20% a year on 6 million is 300,000 a quarter, from the first quarter on. **Hanna:** Same plan, same weak case, just one more line of cost every quarter. > **Exercise:** Fund the project with the 6 million loan instead: 300,000 UAH of interest every quarter from q1. What is the weak case's peak cash need now, including interest? Enter it as a positive number. **Hanna:** 5.95 million: almost the whole loan and no buffer. After two years we'd still be 5.25 million down, with the 6 million due a year later. **Leo:** So the investor isn't the expensive option here. It's the one we survive. **Alex Tutor:** Put that interest in the business's own units before the investor asks. > **Exercise:** The bank loan would cost Klasna 300,000 UAH of interest every quarter. An English lesson in the 16-pack leaves 184.50 UAH of contribution margin. How many extra such lessons a quarter would Klasna need just to pay the interest? Round up to a whole lesson. ## The numbers investors ask for **Alex Tutor:** The memo also needs the business behind the plan, in a few lines: what one lesson leaves, last year's volume and profit, and where it's weak. **Hanna:** An English lesson in the 16-pack leaves 184.50, and last year's average was 173.44. 71,563 lessons, 744,174.72 of operating profit, and five loss-making months. **Leo:** The investor will also ask the obvious: "You're profitable. Why not just borrow?" > **Exercise:** The investor asks: "You're profitable. Why not just borrow?" The facts from the plan: the weak case needs 4,500,000 UAH at its deepest point (5,500,000 with the 1,000,000 buffer); the alternative loan of 6,000,000 at 20% costs 300,000 a quarter, which pushes the weak-case peak need to 5,950,000 and leaves the project 5,250,000 down after two years, with the 6 million due a year later; last year Klasna made 744,174.72 UAH of operating profit. Answer in 2–4 sentences with these numbers. ## The memo **Leo:** Write it. One page, numbers first. The partners read dozens of these. **Hanna:** The ask, how we sized it, the weak case, why equity, the terms, and the base business. No sunk costs, no allocated overhead. **Alex Tutor:** And end with what the investor can check later: milestones that tell everyone early whether you're in the base case or the weak one. **Alex Tutor:** Pick the milestone that would tell everyone first. > **Exercise:** Klasna's EU plan has the same investment in both cases; only the contribution from new EU learners differs. In q2 (December to February) the base case expects 400,000 UAH of it, the weak case 250,000. Which milestone in the memo would show the investor earliest which case Klasna is in? **Sofia:** That's the whole course on one page. Let me write it. > **Exercise:** Write Klasna's one-page finance memo for the investor's partners. > **Key ideas** > > - Size a round from the deepest point of cumulative cash, not from total spend: 3,650,000 UAH in the base case, 4,500,000 in the weak one. > - Raise for the weak case plus a buffer: 4,500,000 + 1,000,000 = 5,500,000, so 6 million is enough. > - Only relevant costs belong in the ask: the 650,000 of past research is sunk, and shared overhead exists either way. > - Test the funding choice in the weak case: with a 6 million loan the need rises to 5,950,000 and the project is still 5,250,000 down after two years, with the principal still due. > - A one-page memo: the ask and how it was sized, base vs weak, why equity or debt, terms and dilution, the base business in numbers, and milestones. **Alex Tutor:** From what one lesson leaves to what a whole round should be: that's the path from unit economics to a business case. Every number in this memo came from a lesson of this course. - Previous lesson: [Debt vs equity: leverage, dilution and risk](https://productovi.com/courses/finance-for-product/debt-vs-equity.md) --- Productovi Learning. Free, no sign-up needed to read.