How to lead
A Finance Team
Beer with a CFO: What finance & accounting mistakes can lead to a lower valuation?
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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
started
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
selling
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
