Litebooks: Budget & Investment
Operational guide for Division leadership
Investment Summary
Total Year 1
$250K
Phase 1 (M1-6)
$125K
Phase 2 (M7-12)
$125K
Breakeven
M10-12
Why This Amount:
$250K buys 12 months of founder time (50%), 1 SDR hire (Month 3), product iteration, and initial marketing. This is the minimum to reach breakeven (80 firms) with a reasonable margin of safety.
Budget Allocation: Where Each Dollar Goes
| Category | Phase 1 | Phase 2 | Total | % | What It Buys |
|---|---|---|---|---|---|
| Founder Salary (50%) | $45,000 | $45,000 | $90,000 | 36% | Product lead + sales (50% allocation) |
| SDR Hire | $20,000 | $40,000 | $60,000 | 24% | 1 FTE from Month 3 @ $60K/yr |
| Product Development | $30,000 | $15,000 | $45,000 | 18% | Contract dev for features, bug fixes |
| Marketing & Content | $15,000 | $15,000 | $30,000 | 12% | Landing pages, case studies, events |
| Tools & Infrastructure | $10,000 | $5,000 | $15,000 | 6% | CRM, hosting, email, analytics |
| Contingency | $5,000 | $5,000 | $10,000 | 4% | Unexpected costs, opportunities |
| TOTAL | $125,000 | $125,000 | $250,000 | 100% |
Founder 36%
SDR 24%
Product 18%
Marketing 12%
Other 10%
Resource Plan: Who Does What, When
| Role | Person | Start | Allocation | Responsibilities |
|---|---|---|---|---|
| Product Lead | Founder | Day 1 | 30% | Product direction, feature prioritisation, dev oversight |
| Sales Lead | Founder | Day 1 | 20% | Discovery calls, demos, pilot management, closing |
| SDR | New Hire | Month 3 | 100% | Research, outreach, call booking, CRM management |
| Contract Developer | TBD | As needed | Variable | Feature development, bug fixes, integrations |
SDR Hiring Trigger
Hire SDR when founder is consistently booking 5+ demos/week AND can't sustain outreach volume. This should happen by Month 3 if conversion rates hold.
KPI Dashboard: How We Know If It's Working
Leading Indicators (Weekly)
These tell us EARLY if we're on track. If these are red, investigate immediately.
| Metric | Target | Warning | Critical | Why It Matters |
|---|---|---|---|---|
| Outreaches/Week | ≥50 | 30-50 | <30 | Pipeline starts with outreach volume |
| Reply Rate | ≥15% | 10-15% | <10% | Message-market fit indicator |
| Discovery Calls Booked/Week | ≥4 | 2-4 | <2 | Demand validation |
| Demo Show Rate | ≥80% | 60-80% | <60% | Interest quality indicator |
Lagging Indicators (Monthly)
These confirm whether we're achieving business outcomes.
| Metric | M1 | M3 | M6 | M12 |
|---|---|---|---|---|
| Pilots Started | 3 | 15 | 36 | 72 |
| Paying Firms (Cumulative) | 0 | 5 | 15 | 50 |
| Trial Conversion Rate | — | ≥25% | ≥30% | ≥35% |
| Monthly Churn | — | <10% | <8% | <5% |
| MRR | $0 | $7,250 | $21,750 | $72,500 |
On Track Signals
- • Reply rate >15% sustained
- • Demo-to-pilot conversion >50%
- • First paid customer by M2
- • Referrals starting by M4
Warning Signs (Investigate)
- • Reply rate <10% for 2 weeks
- • Zero demos booked in a week
- • Pilot churn >20%
- • No paying customers by M3
Milestone-Based Funding Release
Budget is released in tranches tied to milestone achievement. This protects downside while allowing upside acceleration.
| Tranche | Amount | Release Trigger | Expected |
|---|---|---|---|
| Tranche 1 | $75,000 | Board approval (Day 1) | M1 |
| Tranche 2 | $50,000 | 5 paying firms OR 15 pilots active | M3-4 |
| Tranche 3 | $75,000 | 15 paying firms + 25% conversion + <10% churn | M6 |
| Tranche 4 | $50,000 | 30 paying firms + path to breakeven visible | M9 |
Note: If milestones are hit early, tranches can be released early. If milestones are missed, we pause and diagnose before releasing next tranche.
Kill Criteria: When We Stop
These are the conditions under which we would pause or terminate investment. Not failure — just pivot signals.
Hard Stops (Terminate)
- ✕ Month 4: Zero paying customers after 200+ outreaches
- ✕ Month 6: <10 paying firms AND <15% conversion
- ✕ Any time: Churn >25% for 2 consecutive months
- ✕ Any time: Founder unable to commit 50% time
Pause & Diagnose
- ⚠ Month 3: Reply rate <8% after testing 3 message variants
- ⚠ Any time: Demo-to-pilot conversion <30% for 10 demos
- ⚠ Any time: Product feedback requires >$50K additional dev
Philosophy:
Kill criteria are not about punishing failure — they're about redirecting capital to higher-ROI opportunities. If Litebooks hits kill criteria, we learn from it and potentially pivot the thesis, not just throw more money at it.
Risk Register
| Risk | Likelihood | Impact | Mitigation | Owner |
|---|---|---|---|---|
| Accountants too conservative to adopt | Medium | High | Risk-free pilot, founder-led sales, referral program | Founder |
| Founder bandwidth constraint | High | Medium | Early SDR hire, demo batching, strict calendar blocks | Founder |
| Product not feature-complete | Medium | Medium | MVP-first approach, pilot feedback loop, contract dev budget | Founder |
| BGL (Australia) integration required | Low | High | Validate with 5 AU firms before committing AU budget | Founder |
| Xero launches competing feature | Low | Medium | Speed to market, accountant-first positioning, niche focus | Founder |
Board Reporting Cadence
Weekly (Division Lead)
- • Outreaches sent
- • Calls booked
- • Demos completed
- • Pilots started
- • Any blockers
Monthly (Exec Team)
- • Paying firms (cumulative)
- • MRR
- • Conversion rates
- • Churn
- • Budget vs actual
- • Key learnings
Quarterly (Board)
- • Milestone status
- • P&L performance
- • Market validation
- • Next quarter plan
- • Investment ask (if any)