CFO Perspective Review
Executive Assessment
The strategy tells a compelling vertical integration story and the asset base is genuinely interesting — R208M in gear equity is unusual for a creative sector business and gives STIR something most competitors lack: tangible collateral. However, as a CFO looking at this strategy, I see a group that is trying to simultaneously consolidate eight businesses, raise R85M across three tranches, diversify into film and virtual production, expand geographically, and build shared services — all while running on project-based cash flows with no consolidated financials yet in place.
That is not a strategy; that is five strategies competing for the same management bandwidth and the same limited capital.
The funding architecture is the right idea (asset-backed Tranche 1, blended Tranche 2, institutional Tranche 3), but the foundations underneath it are concerning. Every single critical-priority objective — consolidated financials, gear valuation, liability settlement, investor prospectus — currently shows zero progress. We are in mid-February 2026 with March 31 deadlines on three of these. That is not a yellow flag, it is red.
What's Working
Asset-backed funding logic is sound
Borrowing R10M against R201M in net gear equity at ~5% LTV is indeed low-risk for a lender. This is the most credible part of the entire funding strategy.
Vertical integration thesis is financially defensible
Owning equipment, studios, and capabilities rather than renting them is a genuine margin story. Every percentage point of internalisation drops to the bottom line.
The risk register is honest
Six risks, all material, all clearly articulated. Cash flow risk, valuation risk, key-person dependency — these are exactly the risks a funder would identify.
Tranched capital approach shows sophistication
Rather than trying to raise R85M in one shot, the staged approach — prove with R10M, build the track record, then scale — is how experienced capital raisers think.
Critical Gaps
No Consolidated Financial Statements — and Behind Schedule
You cannot raise capital without financials. The objective says "complete by March 31, 2026" with current value "Not started." Eight subsidiaries, likely on different accounting systems, different year-ends, and intercompany transactions that need elimination. A consolidation exercise of this complexity takes 3-6 months with a competent accountant.
No Cash Flow Model Exists
A financial assumption flagged as "hypothesis" that operating cash flow can support debt service, but no model to test it. In a project-based business with seasonal revenue, this is existential. A lender will demand a 12-month cash flow forecast with sensitivity analysis.
The R208M Gear Valuation Is Unvalidated
The entire funding strategy is built on this number. If the independent valuation is R120M instead of R208M, Tranche 1 at 5% LTV is R6M not R10M, and Tranche 3 at 30% LTV is R36M not R60M. That changes every downstream plan.
Revenue Metrics Are Almost Entirely "Unknown"
Targets like "25% from film/VP," "20% recurring revenue," "15% cross-sell," and "R50M pipeline" — but every current value is either "Unknown" or "R0." An investor will ask: "What's your current revenue split?" If the answer is "we don't know," the meeting is over.
Funding Strategy Consumes Disproportionate Attention
The Funding Strategy has 11 initiatives, 10 objectives, and 4 assumptions — more than all other strategies combined. Meanwhile, Revenue Growth has 3 initiatives, Group Integration has 4, and Talent has 3. You're spending all strategic energy figuring out how to raise money, and relatively little on the operational execution that would make the raise successful.
No Unit Economics or Margin Analysis
Nowhere in the strategy is gross margin by subsidiary, contribution margin by project type, or EBITDA trajectory. The claim that film/VP is "higher margin than live events" is stated but not quantified. What are the margins? 25%? 40%? 60%? The difference matters enormously for valuation and capital allocation.
The R14.2M Liability Settlement Is a Ticking Clock
The settlement assumption is rated "likely" but not validated. There's no documented offer, no deadline, no legal review of other liens. If this falls through, you need R14.2M instead of R7M — that's the difference between a manageable outflow and a crisis.
Structural Observations
Initiative duplication is a governance issue
The same initiatives appear under both the Funding Strategy and Investor Readiness sub-strategy, many with one version cancelled and the other active or draft. This creates confusion about which is the "live" workstream and suggests the strategy structure was reorganised without fully cleaning up. Any CFO or board member looking at this would question governance discipline.
Zero metrics are defined at the group level
For a group pursuing institutional capital, you need at minimum: group revenue, EBITDA, EBITDA margin, cash conversion cycle, debtor days, equipment utilisation, and DSCR. These should be tracked monthly.
Every objective has a confidence level of exactly 50%
This is either a default that has not been updated or a genuine expression of uncertainty. Either way, it is not useful. Each objective should be assessed individually. The gear valuation deadline should be at 70-80% confidence if a valuator has been engaged, or 20% if not.
Recommended Actions
Based on the critical gaps and structural observations above, these are the consolidated actions the CFO lens recommends. Each traces back to a specific finding.
No Consolidated Financial Statements — and Behind Schedule
Engage an external accountant immediately with a mandate to produce management accounts (not audited) within 60 days. For Tranche 1, present Collective Gear's standalone financials plus a group overview. Don't let the perfect be the enemy of the good.
No Cash Flow Model Exists
Before any term sheet conversations, build a 24-month rolling cash flow model at the group level. Map seasonality, map the major event pipeline, and stress-test against a 30% revenue shortfall. This will tell you the right debt quantum and structure.
The R208M Gear Valuation Is Unvalidated
Commission the independent valuation this week. It's the most time-sensitive gating item in the entire strategy. Separate the valuation by depreciation class (5-year vs 15-year) and by asset condition. Budget 4-6 weeks for a proper independent report.
Revenue Metrics Are Almost Entirely "Unknown"
Before building the prospectus, baseline every financial metric. Even rough estimates are better than "Unknown." Pull the last 12 months of revenue by subsidiary, by client, by project type.
Funding Strategy Consumes Disproportionate Attention
Rebalance. Spend 30% of strategic effort on funding readiness and 70% on demonstrable operational progress — cross-sell wins, shared services milestones, a major event contract secured. Investors fund momentum, not plans.
No Unit Economics or Margin Analysis
Build a simple one-page margin map: each subsidiary, each major revenue stream, gross margin, contribution margin. This becomes the basis for capital allocation decisions and the investor story.
The R14.2M Liability Settlement Is a Ticking Clock
Get the settlement offer in writing this week. Commission a legal title search on all Collective Gear assets simultaneously. These two items are non-negotiable prerequisites before any funder conversation.
CFO Priority Stack
- Get the liability settlement offer in writing
- Commission the independent gear valuation
- Engage an external accountant for management consolidation
- Produce a 24-month group cash flow model
- Baseline all "Unknown" revenue metrics
- Complete the legal title search on Collective Gear
- Deliver management-level consolidated financials
- Produce the one-page margin map by subsidiary and revenue stream
- Update all objective confidence levels to reflect reality
- Finalise the investor prospectus with actual numbers
- Begin Tranche 1 funder conversations with Collective Gear standalone financials
- Secure at least one major event contract to demonstrate pipeline
Bottom Line
STIR has a genuinely differentiated position in the South African creative production market — the asset base, the vertical integration, the Level 1 BBBEE status, and the event pipeline are all real competitive advantages. But the financial infrastructure is nowhere near ready for the ambitions of this strategy. You are trying to raise R85M across three tranches without consolidated financials, without a validated asset base, without a cash flow model, and without baseline revenue metrics.
The strategy needs to shift from "how do we raise the money" to "how do we prove we deserve the money." The work is operational, not aspirational. Get the numbers right, get the governance tight, demonstrate cross-subsidiary revenue capture, and the funding will follow. Right now, this is a R208M asset story looking for a financial narrative — and the narrative does not exist yet.
How This Review Was Generated
This CFO perspective review was generated through Stratafy's human-AI co-working process. The AI analysed the full strategic context — foundation, strategies, initiatives, objectives, assumptions, risks, and radar findings — through the Finance/CFO functional lens. The findings were then validated and triaged by the strategy owner.
This is exactly what Part 3 of the Stratafy Methodology describes: every strategy stress-tested through every functional lens, regardless of team composition. The AI asks the questions a CFO would ask. The human decides what to do about it.