Applying lessons in school to new worlds

In Finance/Accounting classes we learned all about the three financial statements - Cash Flow Statement, Income Statement, and Balance sheet. We learned how to take read and understand the financial statements for publicly traded companies. We learned how to assess their profitability and understand how money flowed through the financial statements. We also learned how to create financial statements and forecast numbers in the future based on past numbers. However, what we didn't learn was how to create financial statements for new ventures with no revenues/expenses. We also definitely did not learn how to do financial statements with new ventures that could potentially gain  philanthropic contributions. Creating financial statements are very important to find out if our venture if financially feasible.

Cash Flow Statement
Year	0	1	2	3	4	5
Expenses
Web Platform Development	-2000
Web Platform Maintenance		-2000	-2000	-2000	-2000	-2000
Training & Curriculum Development	-10000
Salary (Amber)		-25000	-50000	-51500	-53045	-54636.35
Salary (Position 1)			-50000	-51500	-53045	-54636.35
Salary (Position 2)			-50000	-51500	-53045	-54636.35
Salary (Position 3)			-30000	-30900	-31827	-32781.81
Total Salary		-25000	-180000	-185400	-190962	-196690.86
Benefits	0	-5000	-36000	-37080	-38192.4	-39338.172
Marketing	-2000	-1000	-1000	-1000	-1000	-1000
Office Space			-2400	-6000	-6000	-6000
General Expenses		-5000	-5000	-5000	-10000	-10000
Legal/Accounting related fees	-11000	-2000	-2000	-2000	-2000	-2000
Total Expenses	-25000	-65000	-408400	-423880	-441116.4	-453719.892
Best Case
Revenue	0	0	50000	60000	72000	86400
Investments from Philanthropy			50000	60000	72000	86400
Cumulative Cash	-25000	-65000	-358400	-363880	-369116.4	-367319.892
Base Case
Revenue	0	0	25000	27500	30250	33275
Investments from Philanthropy			25000	30000	36000	43200
Cumulative Cash	-25000	-65000	-383400	-396380	-410866.4	-420444.892
Worst Case
Revenue	0	0	0	0	0	0
Investments from Philanthropy	0	0	0	0	0	0
Cumulative Cash	-25000	-65000	-408400	-423880	-441116.4	-453719.892

In creating the cash flow statement, I started with detailing out the expenses. From here, I realized just how many assumptions I was going to need to make in this difficult task. I tried to stay on the conservative side in terms of my estimations because I really wanted to understand how feasible this venture is. After doing the expenses, I decided that the best way to project out revenues was to project out three different states of the world - a best case, a base case, and a worst case. I figured this would be a good way to the see the profitability of the company. After projecting out these numbers, it became very clear to me that in order to be a profitable company, we're going to need investments from philanthropy, unless I grossly underestimated our revenues. Now that I have discovered that, I wonder how to find out how much money we can get through charitable donations. What sort of growth rates should you use from year to year? I think one key difference in forecasting cash flows for a brand new company versus an established company is that forecasting cash flows for a brand new company is much more of a guess. Often times there can be little information out there and you really just have to guess and hope you were right.