Have you heard about outsourcing a company’s finance and accounting with a Finance as a Service model? It is by far the best way to plug into a well-tested finance and accounting function with the right processes, technology and skilled finance team to help you stay focused and add value to strategy.
Consero provides Finance as a Service, and we have devised a way to help anyone with the advice they need, remotely, through various forms of media. One of our more well-known mediums is the series called Beer With a CFO, where we take on an individual guest each week to discuss pressing financial topics with our Director of Marketing, Bridget Howard.
In today’s episode, we delved deeper into private equity, investing in the future, and finance and accounting mistakes. Our revered guest, the CFO of ActiveProspect, Jessica Hamilton, derives from an Austin-based marketing SaaS company that offers lead optimization and compliant solutions for companies that dabble in online lead generation. This bootstrapped company has experienced rather rapid growth since it was founded. Their CFO joins us to talk about their growth story and confidence that is essential to achieve a 50% year-over-year development.
ActiveProspect’s CFO has also had some experience in raising capital, as well as exiting a company and selling a business. Having been a finance lead at the time, we asked her to talk about some finance and accounting mistakes that can be made to lower the valuation of a business.
Emphasize the Growth Story
Jessica emphasized the importance of one’s confidence in their growth story. She stated that it’s essential that your pro formas and the story is truly believable before even approaching a potential investor. You have to be able to back them up with facts and truly believe in them yourself. If you don’t, it’s unlikely that anyone else will.
Back it up with Data
In addition to that belief and your genuine interest, you will need to further back it up with data. This makes it essential to have your data in order, not just in the sense of financial aid, but also product data, customer retention data, all of the KPIs, your financial data, information about your customers, what verticals they are in, etc. Across the board, having your data house in order is critical to protecting that valuation and supporting the confidence in your own growth story.
Unique Product - Stickiness
Thirdly, one of the vital details is the stickiness of the products with customers that have been supporting you and your business since the very beginning. Customer lifetime value is critical for companies that characterize themselves as high-growth mid-market companies.
So what is being done today to protect the valuation of ActiveProspect? They are contemplating bringing in their first round of financing, and they are hyper-focused on getting started early. Ultimately, investors are not investing in the past; they are investing in the future. And they want to understand your data today. Most importantly, they want to know about the data you’re expecting tomorrow, which is why you must not let the data go stale. Only refreshing it, digesting it, and gathering insights from it is enough to be able to have the most relevant conversations with investors.
The Bottom Line
The bottom line is - get started early, invest in software and people to get all your data available across the organization and be prepared for a lot of tough questions.