Case Study
How the Elton John AIDS Foundation – a 501(c)(3) – Forecasted Cash Flow with Raftel Strategy
We partnered with Demostack to build strategic models for payroll and vendor expenses—ultimately enabling the company to save tens of thousands of dollars on negotiated vendor deals and forecast expenses to understand cash burn and runway.
A 5-year forecast with revenue as a driver for headcount planning
A dynamic relationship for headcount based on various revenue streams
3 scenarios to show different strategic directions
Our Solution
Our team at Raftel Strategy helped EJAF transform their strategic goals into quantifiable projects. We used Causal (modeling software) to build sophisticated but easy-to-use models to forecast budget creation, cash flow, headcount and more - all with expected vs. actuals.
We asked specific questions which revealed data that helped us built a robust model vs. the old one they had been using in Excel. We encouraged EJAF to put pen-to-paper for each relevant model-driver that we wanted to forecast - hiring requirements, overhead assumptions, etc.
Lots of specific line items (think internal audit and professional fees) were items we discovered only after we asked these questions. They allowed EJAF to think and rethink what the most realistic relationships were in each scenario.
01: Raftel Strategy helps growing startups with small finance teams to eliminate redundancies and save money by earning better deals with vendors
Building a streamlined model to track vendor expenses is critical for scaling startups to save on their tech stack. But too many startups have small finance teams and lack the capacity to build effective models that help them do this. So, when Demostack partnered with Raftel Strategy, they were impressed by just how quickly we built sophisticated but easy-to-use models for their exact needs. As a result, Demostack could predict future spending accurately and identify opportunities for consolidation and cost-saving. It accounted for both annual and monthly payments, offering insights into cash flow and budgeting for software expenses across different teams.
02: Raftel Strategy builds expert financial models for scaling startups to accurately forecast expenses
According to Dave, VP Finance at Demostack, what differentiates models by Raftel Strategy is our ability to built dynamic and flexible models that allow for easy scenario-testing. Dave was impressed by how well-designed and user-friendly our models were too, and how they integrated deep understanding of the business and not only the financials. With our customized payroll model, Demostack could engage in strategic planning for both expansion and contraction phases, providing a clear view of financial commitments and implications for cash burn and runway in the future.
Background
At first, EJAF had a lot of data but needed to structure it. They wanted to build a model that could forecast different scenarios. Most importantly - they wanted to do capacity planning and budgeting with these models.
In addition, their headcount model wasn’t dynamic (not revenue-driven) which prevented a high-level strategy view on where the organization was headed from a staffing perspective. They needed more sophisticated and user-friendly models to forecast these different scenarios.
Impact
As a result, Raftel Strategy became a key partner to EJAF’s CFO as a quick deadline was approaching.
From start to finish, we delivered sophisticated but easy-to-use models to support EJAF’s long-term strategic goals. And helped management navigate the power of Causal and its different uses - like dashboards, easy creation of graphs and comparisons of scenarios in table view.
Some of our key outputs included:
A 5-year forecast with revenue as a driver for headcount planning
A dynamic relationship for headcount based on various revenue streams
3 scenarios to show different strategic directions
We were lucky to present the results to Sir Elton John himself. It was a great pleasure to work with the Elton John AIDS Foundation.
"Before partnering with Raftel Strategy, our approach to managing vendor spend and forecasting payroll was fragmented and inefficient. This made it challenging to optimize our budget as we prepared to scale.
Raftel Strategy's financial expertise and strategic insights were crucial in helping us grow quickly and prevent costly mistakes."
"Working with Raftel Strategy was a game changer for us. They whipped up smart, easy-to-use financial models that did exactly what we needed.
Within months we were saving money and making better decisions thanks to the tools they provided. It was like they knew our business inside-out from day one."
Overview
The Elton John AIDS Foundation is in the Top 10 philanthrophic funders of AIDS/HIV grants worldwide.
