How Startup CFOs Can Help Turbocharge Growth

So often—too often—I see the position of CFO as misunderstood or undervalued in smaller companies. In such companies, there needs to be a paradigm shift as the company grows. Early-stage companies need to understand how a CFO can positively impact the company’s growth from every angle. CFOs can help lead the charge when it comes to growing your company. Because your business strategies are deeply woven in with your financial strategies, you need CFO support for any and all of your growth initiatives: from the planning stages through to execution. When your CFO is deeply involved at a holistic strategic level—not just a superficial money management level—here’s what he or she can do. 1. Identify strengths and your competitive advantage. Your CFO has deep insight into your company’s strengths. Where are you making money? Where is your biggest ROI? With this knowledge, your CFO can help you to leverage these …
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Are We in Tech Bubble 3.0?

With Priceline’s announced purchase of OpenTable coming at a 46% premium to where OpenTable’s stock recently traded, the highest for an internet stock since before the Great Recession, following hot on the heels of Facebook valuing WhatsApp at $19B, and Uber’s valuation recently topping $18 billion in its latest funding round, I figure it’s time to share my thoughts on whether we are indeed witnessing the latest bubble. First off, how do funding, pricing, and valuations compare to those in previous periods? Looking at private markets: Valuations have risen across all funding stages — Series A pre-money valuations have soared from 4 times in 2009 to 7 times in 2014. While buyout multiples are at 10.7 times versus 6.8 in 2009.1 Deal flow in internet specific businesses is higher than in 2001: while VCs invested $7B in 141 deals so far this year versus $65 billion in 375 deals in …
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Why Not to Use Independent Contractors For Overseas Hires

Guest post contributed by Ben Wright of VelocityGlobal. Using contractors to save on overseas employee costs can backfire, as this case study demonstrates. Expanding your company into foreign markets can be daunting, and the prospect of hiring international staff is often the tip of the “fear” spear. Understanding the ever-changing domestic employment laws can be a real challenge. When venturing abroad we’ve seen countless situations of companies trying to avoid hiring employees altogether — often with disastrous consequences. Even a little bit of research can go a long way to keeping employees happy, regulators appeased, and your board of directors off your back. Here’s the story of a well-meaning client who needed to discreetly convert a contractor to an employee in Argentina. Background We received a call from a distraught CFO. Her company had entered the Argentine market two years earlier, after researching several Latin American markets and concluding that …
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A Guide to Wealth Management for Startup Founders

One thing that’s probably not occupying much mind space as you’re building your company is managing your personal assets. Too often, entrepreneurs neglect planning for and managing personal finances as they focus on building their business, lining up financing, and steering toward an eventual liquidity event. But it’s not too early to start thinking about your options and doing some advance strategizing. Darin Donovan, Shareholder at Hopkins & Carley, and Glenn McCrae, EGFS’ Strategy Officer, shared ways to tackle this during a recent webinar. Read my take below and get the download here. Personal planning issues tend to fall into these 3 areas: Financial investment – Diversifying a concentrated position, whether in the form of founder’s stock, stock options (ISOs) or restricted stock (RSUs). Complex income tax planning needs – Deferring income tax and converting assets subject to the maximum federal income tax rate of 40% to ones that qualify …
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Entrepreneurs And Personal Finance – How to Stay Organized

Originally published in KillerStartups. We talk a lot about managing cash flow if you start a new business, but less about managing your own finances while you do that! How do you keep your personal finances (and cash flow) organized? The following answers are provided by the Young Entrepreneur Council (YEC), an invitation-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons. 1. Keep ‘Em Separate It is essential that you keep your personal finances and business finances completely separate. Do not commingle! Make sure you are paying yourself a salary (rather than paying your personal bills) out of the business finances as soon as possible. Use software like Mint.com (www.mint.com) to keep track of your …
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How to Protect Your Startup IP

Not protecting your business’ IP or unwittingly infringing someone else’s can be a really costly unforced error. This week Allonn Levy of Hopkins & Carley and Glenn McCrae, EGFS’ Strategy Officer, gave a webinar on how to avoid the biggest mistakes startups make with IP. Get the download here and read below for the top 5 mistakes, advice and tips on how to address issues before they blow up, and ways to avoid being involved in costly litigation. Mistake #1 — Failure to register IP. There are several types of protection, with varying degrees of strength. Copyrights — protect “creative expression,” not ideas or concepts. Among other things, they confer the right to reproduce, distribute publicly, and publicly display: essentially providing a limited government monopoly on the ability to sell/distribute your work. What can’t be copyrighted? Ideas, processes, or method of operation. Software code counts as “creative expression. Applying for …
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Online Marketing For Startups: How to Measure Success

This guest post was contributed by Brett Farmiloe, founder of Markitors. Figuring out to gain traction is one of the biggest challenges for any startup. Let’s say you’re the person responsible for getting “X” number of users within “Y” months of your launch. Instead of just giving it your best shot and praying for success, how can you quantify the effectiveness of your online marketing strategy? Here’s the framework we utilize for clients at Markitors: Figure out the target goal and timeframe Identify marketing assets Develop and execute the strategy Figure out the target. As an example: We recently launched an iPhone app for light rail riders in Phoenix. We determined there were about 50,000 regular riders. Of that 50,000, we estimated 25% had iPhones. Our goal for the app was to get a 10% adoption rate within 3 months, which led to a target of 1,250 users. You can …
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How to Raise Investor Funding for Your Startup

We recently participated in a panel discussion and workshop at Ubifrance. Nicolas L. Baze, Partner at Partech Ventures, Carlos Diaz, CEO at Kwarter, and EGFS’ Chief Strategy Officer Glenn McCrae covered raising funds, how-to pitch VCs, and potential sticking points around valuation. Check out the full video or read my take for some of the highlights. 1. The role of a CEO — As an entrepreneur, in addition to setting and communicating your vision and mission, one of your main roles is selling your company to investors. 2. Valuation — Know what these terms mean: Fully-diluted — This includes all issued stock and anything that could be converted into common stock (typically after an acquisition or IPO), such as your stock option pool. Pre-money valuation — The value of the company prior to investment, calculated on a fully-diluted basis. Option Pool — An important piece of your hiring and compensation …
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10 Steps to Raising VC Funding For Your Startup

Don’t you wish there was a formula that could guarantee funding success? There isn’t of course, but there are ways to make the process feel less like a heroic quest and more like a demanding but achievable goal. But how do you actually go about it? And what are the steps involved? If you missed Monday’s webinar with Ryan Azlein of Stubbs Alderton & Markiles and EGFS’ Chief Revenue Officer Gadiel Morantes, here’s the download. The key is getting investors to believe in your story, to buy into your vision, and to back your management team. Below, here’s a plan to make that happen. 1. Create a game plan. I say this over and over, but, drumroll please: practice milestone funding. What do I mean by this? You’ll greatly increase your chances of success if you identify your milestones and then calculate how much capital you need to raise in …
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7 Ways to Build Your Startup Brand

When your company is in its early stages, presumably you’ve thought through your offerings and done the hard work of choosing a company name. You may even have a logo or website. In terms of building your brand, these steps are a good start in the right direction—but these things alone do not add up to your brand. Your brand, like your company culture, is everything. It’s how you present yourself to existing and potential customers, what you have to offer, who you are. It’s the promise you make and keep everyday. Taking a thoughtful approach to branding is a way to actively help to mold public perceptions of your company. Designing a functional product that solves a pain point, and continually refining the product to make it an ongoing solution? That’s branding. The key words and images you associate with your company? That’s branding? Providing consistently excellent customer service? …
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