Believe it or not, the early choices you make building out your financial reporting process can have an outsized impact on your ability to scale your vision. In this session at Early Stage 2022, panelists share personal and practical advice every founder should know now for better decision-making later on.
Here’s some insight from Erik Zhou, the Chief Accounting Officer at Brex, on how having the right data early on can help a startup win financing, scale quickly, and succeed for the long haul.
CAC is the cost of acquiring a customer, and LTV is the lifetime value of the customer. You want your ratio of your lifetime value of that customer divided by the cost of acquiring a customer to be very high. Then TAM is a target addressable market. These are the things that I think about every day. Having that knowledge in-house, being able to present it crisply to investors in that boardroom or wherever you are, can really pay dividends.
The one thing that people don’t talk about a lot, I talk about that thing a lot. When I present something I want to have the warm and fuzzies about what I’m presenting and I want the people that are listening to also feel that way. And so having a strong process for financial planning and analysis, your accounting, etc — whether it’s coming from a CFO or a software product — that’s just really important. Especially in early days, it can be that difference between securing funding and not frankly not securing it.
Erik Zhou | Chief Accounting Officer — Brex
Tiffany Wong, the cofounder of Pry Financials, echoed the importance of having access to deep and functional financial data sets. She also explained why new fintech makes organizing and handling that data easier than ever:
I believe that shouldn’t be a problem anymore with affordable solutions like Pry. You can actually build a financial plan in less than 30 minutes on Pry. You can build a financial fundraising dashboard on Pry and share that with your investors to tell your growth plan in a convincing way.
There are other use cases for Pry that can help plan for different scenarios. A lot of times when you’re running a startup things happen. For example, if your engineers ship your features late and your launch is delayed, and your revenue forecast is pushed back by six months, how would that impact your runway? Would you still have enough runway to keep going? That’s also very important to know and plan for.
And then lastly, you can also use Pry to plan for your hiring needs. For example, if you know that one customer support rep can support 100 customers and you’re forecasted to have 500 customers by the end of the year, you will need to hire additional four customer support reps and also budget for them. So these are all very common scenarios where founders can use Pry before they need to hire a CFO.
Tiffany Wong | Co-Founder and COO — Pry Financials