Small Startup Software Company

A small startup software company with a good idea for a SaaS application is trying to decide how much funding will be needed to cover their first two years of operations. They would like to model their weekly cash flows and bank balance. NOTE: Allow the bank balance to go negative. The business partners intend to buy stock during the first week, resulting in a deposit of $150,000 in the bank. They anticipate another stock offering at the beginning of the second year, resulting in a second deposit of $100,000. ("what if " )

Their estimated costs and revenues are given below:

a) Server hosting fee of $6000 (paid in weeks 1 and 27 of each year)

b) Development team wages (normal distribution, average of $2200 per week, standard deviation of $200) (weekly)

c) Marketing web site ($10,000 in week 4 of the first year)

d) Oracle license fee ($12,000 in week 1 of first year, $2400 in week 1 of second year)

e) Software revenues per week ($6000 with probability .1 per week for year one [starting in week 26] and .4 in year two) (weekly)

f) Development environment ($8000 in week 1 of the first year)

g) Rent and other costs (every 4 weeks, uniform distribution, $1200-$1800)

h) Marketing travel (every 4 weeks, normal distribution, average=$2200, standard deviation = $200)

• Add one element at a time and run the simulation to see if it makes sense.

• Run properties (DayofWeek, DayofYear, WeekofYear, Year) are useful in triggers. If you run for 104 weeks, the 53th step will be Week 1 of Year 2. For example, if something that happens in the first week of each year, the trigger can be simply WeekofYear=1.