Beer with a CFO: What finance & accounting mistakes can lead to a lower valuation?

Sharing buttons:

hey there it's Bridget you're joining us

for another episode of beer with the CFO

I'm with can Sarah provide finance as a

service to my growth mid-market

companies and what is finance as a

service we provide the back-office

finance and accounting and we do that

for a skilled finance team and our

software stack so today I'm with Jessica

Hamilton who is the CFO of active

prospect thank you for joining me and

why don't you tell us about active

prospect a little bit before we get


sharks so active prospect is an

austin-based marketing SAS company who

offers lead optimization and compliance

solutions for companies that dabble in

the long right lead generation space

that's that's my space so you know

you're bootstrap company and we were

talking at the CFO leadership prospect

so 50% year-over-year congratulation

thank you very much very cool to be part

of that growth I'm sure you're always

evaluating whether to raise money every

day yes and I know that you've had

experience in your past with raising

capital and even exiting your company


you know during that time you were the

finance lead and played a significant

role in the due diligence for call

financing activities so I wanted to ask

you you know what are what are some

finance and accounting mistakes that can

be made to lower the valuation of a

business yeah no it's a it's a great

question it's one that I'm constantly

thinking of in my role how to add a

protective I wishin for the company and

I would say a couple things that come to

mind is first and foremost confidence in

your growth story so before you even

approach a potential investor and making

sure that your your growth story your

pro formas are truly believable that you

have to believe in them yourself and be

able to back them up with facts first

and foremost because if you don't

believe and you can't portray that

confidence no one else will believe

either but then also once you have that

belief in your thoughts and interest

then you need to then further back it up

with all the data they're really having

your data house in order and once a day

the house first accounts if you think of

funny enjoy and that's just a small

piece of and so having your product data

available having your customer retention

data available all your KPIs your

financial data and

information about your customers what

verticals are they in etc so cross

across the board having your data house

in order is critical to protecting that

valuation but also to also support that

confidence in your own growth story and

where you guys are headed and then third

and foremost is the stickiness you know

for us actors prospects it's it's a

great to be at a companies fifteen years

old and bootstrap because we have 15

years of amazing data we have customers

that have been with us for all 15 years

they're being able to demonstrate the

stickiness of our product and and the

adoption and our customer lifetime value

is critical so we're lucky because we're

a little bit later stage that were able

to demonstrate that but even for earlier

stage companies you can create those

stories you can find them and really

double down on them to portray that

growth opportunity approach so what are

you doing today to protect the valuation

of active prospects everything I thought

so so we are you know as always

contemplating bringing in our first

round of financing and right now we are

hyper focused

getting started early so we are in the

data every day if not weekly looking and

saying ok as our booking numbers up to

date or retention data up to date both

logo and revenue all of our customer

acquisition costs making sure we really

understand what's happening and have a

really good finger on the pulse of the

organization because investors are not

investing in the past they're investing

in the future they want to understand

the data today and in

the data that you expect tomorrow and so

we can't let our data ago steal that

we're constantly refreshing it digesting

it gleaning the inside apartment in

order to be able to have in those

relevant conversations to our investors

I would say that that is it's critical

for anyone expecting to go out and raise

money get started early invest in

software and fuel to to get all your

data and available across the

organization and be prepared for a lot

of tough questions I suspect there are a

large number of our audience viewers who

are doing the same thing so if anybody

out there is racing funds racing capital

and wants to talk to Jessica about her

best practices and and what's been

successful for her please reach out I

hope there are information in

we'll see you again next time on beer

with the CFO yeah thank you for having

me Cheers