Series C finance: funding is not revenue or usable cash
A fictional Canadian fintech is raising equity and wants to expand. The board has confused headline valuation, money raised and cash available to spend. Reconcile the financing, dilution and operating runway.
Float publicly announced a CAD $85m Series C on 24 June 2026. The exercise below uses a different fictional startup and deliberately different financing terms and balances; it is not a model of Float.
Independent Finance Circle learning material. The source organisation does not sponsor, author or endorse this exercise.
Clarify. Structure. Calculate. Defend.
Take 2 minutes to clarify the decision and definitions, 3 minutes to structure the analysis, then work the exhibits. Finish with a concise recommendation and answer a follow-up. The time is a suggested practice format, not an employer requirement.
Clarify before solving
What are the data basis and reporting boundary?
Float publicly announced a CAD $85m Series C on 24 June 2026. The exercise below uses a different fictional startup and deliberately different financing terms and balances; it is not a model of Float.
Which assumptions can I use without requesting more data?
CAD millions. Opening cash 10; gross new primary equity investment 20; cash financing fees 1. Pre-money equity valuation is 80. No debt, secondary share sale or other cash movements. After financing, 6 of cash is restricted and unavailable for operations. The board requires a separate minimum operating cash floor of 5.
What decision am I expected to support?
After paying the optional 8 investment, calculate remaining spendable cash and runway to the floor.
Build your structure
- Primary equity, fees and ownership dilution
- Cash versus valuation versus revenue
- Restricted cash and minimum operating reserve
- Expansion spend and runway to the floor
Use the branches that matter to this decision. A memorised framework is less useful than explaining why each analysis could change your recommendation.
Everything you need to work the case.
Assumptions & boundaries
- CAD millions. Opening cash 10; gross new primary equity investment 20; cash financing fees 1. Pre-money equity valuation is 80. No debt, secondary share sale or other cash movements.
- After financing, 6 of cash is restricted and unavailable for operations. The board requires a separate minimum operating cash floor of 5.
- Constant monthly net burn is 1.2. Director option pays an additional 8 expansion investment immediately. Assume the investment does not change burn during the measured horizon.
Illustrative financing and liquidity
| Driver | CAD million |
|---|---|
| Opening cash | 10 |
| Gross new equity | 20 |
| Financing fees | 1 |
| Pre-money valuation | 80 |
| Restricted cash | 6 |
| Minimum operating cash floor | 5 |
| Monthly net burn | 1.2 |
| Optional expansion investment | 8 |
Choose the responsibility. Solve the decision.
Each level uses the exhibits above and asks a different question. Your entries stay in this open page only; copy your work before leaving.
Reconcile cash and ownership.
Calculate post-financing cash, post-money equity value and the new investor’s ownership percentage.
Why are financing proceeds not revenue?
Numerical checks compare your arithmetic with the case model. Written recommendations are self-practice and are not automatically graded.
03 · Reveal worked solution & decision guide
Expected numerical answers
- Post-financing cash
- 29 CAD million
- Post-money equity value
- 100 CAD million
- New investor ownership
- 20 %
Work through the calculation
- Cash = 10 + 20 − 1 = 29. Post-money value under the stated terms = 80 + 20 = 100.
- Ownership = 20 / 100 = 20%. Cash financing fees reduce cash; they do not change the stipulated share-pricing calculation in this simplified case.
A strong concise response
My calculation shows that post-financing cash is 29 CAD million; post-money equity value is 100 CAD million; new investor ownership is 20 %. A valuation is not a cash balance, and equity proceeds are not customer revenue.
Answer the interviewer follow-up
Why are financing proceeds not revenue?
They are a financing cash inflow in the stipulated model. Selling equity is not a customer service transaction or operating income.
Assessment rubric · 20 points
For self-review or mentor discussion. This rubric is not an automated written-answer grade or an employer scoring system.
Correctly derives all 3 numerical results for this level, keeps signs and units consistent, and explains the method.
Explains the objective: Reconcile cash and ownership. States the supplied scope, timing and metric definitions before calculating.
A valuation is not a cash balance, and equity proceeds are not customer revenue. Addresses the interviewer follow-up without contradicting the facts.
Leads with a clear conclusion, distinguishes facts from assumptions, and identifies the next evidence needed. Does not claim the source company asked or endorsed this question.
Use full precision until the final rounding. Alternative written recommendations may be reasonable if they respect the facts and explain assumptions. This is Finance Circle’s guide, not an official source-company answer.
Source & attribution
The references below identify the public reporting, hiring guidance, research or mock-interview material used for context. Finance Circle wrote the exercise and its answers. Illustrative figures are explicitly identified; they are not company results or findings.
Funding stage, amount and date verified from the company’s announcement; scenario economics are original.
Source reviewed 30 October 2026. No external page is needed to answer this exercise. Company names and logos identify sources only. All trademarks belong to their respective owners.