The startup that you’ve been working so hard to get off the ground has finally received its first round of funding. You’ve successfully navigated those initial investor meetings, survived the due diligence process and the money is actually in the bank.

Now what? In the short-term, you should follow this checklist from Nextview’s David Beisel. You’ll note that one of his first points (after a company happy hour, of course!) is finding some expertise to help upgrade from your bookkeeper and QuickBooks-type product to avoid future issues. The point of this post is to explain what he means in a little more detail.

This upgrade entails building out the financial infrastructure of the business to support your future growth as you scale up. As you are successful achieving the results you laid out that got you funded in the first place, you’ll most likely be raising another round of financing. To give yourself and new investors a chance at achieving the best possible valuation, it’s not too early to pay some attention to this critical component of your business.

Be Able to Provide Financial Reports

The bare minimum for investor reporting comes down to answering two basic questions: how much cash do you have left; and when will you run out of cash? After that, a rapidly growing business must be ready to provide investors with a mix of basic and highly detailed financial statements, including income statements, balance sheets and cash flow projections. More detailed P&Ls, for example, will compare current budgets and prior periods, gross profit by product, and various spending breakdowns by department.

Additionally, your investors may ask for details on sales performance reports, customer acquisition costs and churn, monthly recurring revenues, along with growth-oriented metrics and other key performance indicators (KPIs). Reporting is the window through which investors assess your organization.

“Because our partner had our finance and accounting completely buttoned up, including all supporting documentation, we were able to complete our transaction with a very quick and easy diligence process and maximize the valuation of the business,” said Eric Broughton, CEO of E Supply Systems.

Are your reports timely and accurate, future-oriented, and detailed, yet easy to digest?

Most early-stage businesses don’t realize the amount of work involved to render these reports, even if they remain simple and straightforward. Furthermore, you must demonstrate the fundamental realities of your enterprise, and to do that, you need systems, processes and people.

Implementing Best-in-Class Systems

To be able to get any insight into your company’s performance, you first need good systems. Unfortunately, when infrastructure applications are separated into poorly connected silos, the result can be wasted employee productivity, added complexity and cost, and greater customer churn. Well-integrated systems solve those issues and highlight opportunities for growth.

That kind of visibility starts with mission-critical applications, including finance and general ledger software, CRM (customer relations management) databases and lead generation systems. Depending on the scope of the business, other key systems might include order entry and payment processing systems. The good news is that most of these systems are cloud-based and increasingly affordable. The bad news is that unless you’ve done it before, integrating these systems on your own can be extremely frustrating and time consuming.

A modernized, integrated infrastructure enables your company to drive process efficiency, innovation and growth—all good things in the eyes of your investors.

Implementing and Documenting Financial Processes

Employee turnover is a given in today’s economy and for a rapidly growing business this can be crippling. To minimize the loss of a key person, especially a financial person, you need to have a documented workflow (with software navigation instructions and approval matrix) for how you manage order to cash, accounts payable, payroll and other critical financial processes.

Integrated, formalized and closely linked business processes allow for automated efficiencies, segregation of key financial duties, and more effective layers of approval.

Having the Right People

Because you’re burning money every month, spending on a finance/accounting team is often overlooked because it’s not viewed as customer-facing or critical to your product. Saving money whenever possible is always a good practice, but having the right level of expertise keeping an eye on your spending through systems, process and controls will nearly always save more than it costs.

As you consider what level and mix of expertise you need to effectively grow, the importance and cost of positions like chief financial officer, controller, accountant and bookkeeper will vary depending on the size, complexity and maturity of the business. At this point, your challenge is that you might only need 10 percent of a CFO or 30 percent of a controller; and while you can hire these as part-time positions, you’re often competing for attention with their other clients or having to replace them when they are lured away by a more lucrative full-time position.

The other challenge is the misalignment of skillsets and roles—do you really want to pay a controller-level employee to have them perform bookkeeper duties? Hiring a firm that specializes in building a financial team that is customized for your business is an efficient way to fill the role of an entire finance department.

Your focus should now be 100 percent on delivering the results based on the plan that just got your business funded. Like it or not, your credibility is always on the line. Having real-time insight into how you’re doing against the metrics you established with your investors is only going to help you achieve those targets. Being able to prove in due diligence with the investors of the next round that you have a financial infrastructure ready to scale isn’t going to hurt either.

Jason Pulsifer is director of business development for Consero Global. Contact him at

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