Deep tech ventures face a unique and persistent challenge: cash flow management.
Between long development timelines, irregular revenue streams, and the complexities of grants and
fundraising, financial resilience is essential for deep tech startups.
We’ve partnered with Melanie Portelli and Bradley Eagle, from Westpac, to host a webinar on how to navigate the core principles of cash flow and how banks assess business viability, scrutinising tangible assumptions and conservatism in financial forecasts. During this session, Portelli and Eagle shared their 6 key takeaways for navigating cash flow realities and how Westpac offers specific financial support for startups, including business loans and initiatives that support female founders.
Read their 5 key takeaways below.
Understanding Deep Tech’s Cash Flow Nuances
The principles of cash flow involve tracking cash inflows (sales, grants, investor capital), cash on hand, and cash outflows (equipment, staff, taxes, debt repayments) to determine the net position (positive, neutral, or negative). However, deep tech ventures must contend with unique realities that impact this flow. Startups need to be aware of:
• Extended R&D Periods: Many companies are in R&D for years, which significantly affects cash inflow.
• High Capital Expenditure (CapEx): Investments can be multi-million-dollar or hundreds of thousands, making the business CapEx-heavy.
• Variable Timelines: Project timelines are often unpredictable.
Essential Strategies for Planning Ahead
When forecasting cash flow, founders should adopt conservative and comprehensive planning practices. This includes:
- Always Allow for Contingency: It is considered good practice to allow for cost overruns by setting aside a 10% contingency for high costs. A common red flag for bankers is founders not preparing for these unforeseen or negative experiences that could impact finances, such as delayed grants or broken equipment.
- Start with the Knowns: Begin forecasting with fixed costs and known money coming in, as these are the easiest starting points.
- Be Conservative: When creating business plans and forecasts, it is wise to be conservative rather than expecting the business to be "shooting the lights out" in a short period.
What Banks Look For When Assessing Funding
When assessing deep tech businesses, where historical financial performance may be limited, banks focus heavily on forward-looking indicators such as:
• Tangible Assumptions: Banks look for tangible assumptions within the cash flow forecast and business plan that show what is expected to occur.
• Reliability of Forecasts: Banks analyse the reliability of previous forecasts compared to what actually happened.
• Experience and Credibility: The experience of key people (founders, staff, and business partners) in the industry is highly scrutinised.
• Market Demand: Demand should be created for a tangible purpose or contract, rather than relying solely on abstract market trends.
• IP as Value Proposition: While trying to allocate value to intellectual property (IP) to lend against it is tricky, IP is a part of the overall consideration and the value proposition and potential of the business.
Westpac’s Offerings and Resources
As mentioned by Melanie Portelli and Bradley Eagle, Westpac is invested in the deep tech sector and currently has these offers and resources to assist with startup commercialisation:
• Business Loan for Startups: This product is market-leading as no other bank is offering it. It is for businesses under two years old and provides up to 50K unsecured. It requires only a business plan and a cash flow forecast (which must use a Westpac template or be accountant-certified) to apply. This loan can help founders bridge funding gaps.
• Scaleup Proposition: This offering goes up to 5 million dollars and is intended for more mature businesses that can demonstrate serviceability. A new policy change will soon look only at business financials for eligible applicants, rather than personal financials.
• Structuring Debt for Pre-Revenue Companies: Banks can structure debt and facilities to meet the needs of cash inflows and outflows, such as structuring repayments to align with when the business expects cash to be available following a purchase order or contract fulfilment.
• Supporting Female Founders Initiative: Although not specific to just Startups, this initiative supports women in business, either through Westpac's startup or scale up loan, as a commitment to supporting female founders with a $1 billion fund (as of March 2025) to address the funding gap in the market.
Building a Relationship with Your Bank
Westpac has shifted its strategy toward localisation, and supporting the local community. As a result, Startups are encouraged to:
• Build Relationships Early: Founders should aim to build relationships with local bankers before they actually need lending. Sharing the business vision and ambition helps bring the banker "on the journey".
• Benefits of Existing Relationships: It is easier for the bank to support and advocate for existing customers, especially those who hold their transactional or deposit accounts with the bank, allowing them to move quickly to help.
• Key Habit: To manage complexity, founders should avoid running all funds out of one bank account. It is recommended to use multiple bank accounts to keep money separate for fixed costs, staff entitlements, and big supplier payments.
Additional Resources For Startups:
Westpac also offers a Cash Flow Education Hub featuring a helpful video and a Cash Flow Guide to support startups throughout their commercialisation journey for funding opportunities.
