October 9, 2012 | 5-minute read (1010 words)
Published on Sramana Mitra on October 8. 2012.
Not everyone is good at accounting and finance, and as a company begins to grow, keeping track of finances becomes a job that requires more than one or two people to complete. That’s where companies like Early Growth Financial Services (EGFS) come in.
Early Growth Financial services and its more than 30 employees provide companies with finance and accounting support on an as-needed basis. EGFS has extensive experience working with companies at all stages of development. The services that EGFS provides allow business leaders to keep their internal resources focused on doing business. The company offers a complete suite of services, from high-level financial strategy to day-to-day finance, accounting, and administration that can be outsourced without affecting business operations. From audit preparation to GAAP compliance, revenue recognition review to financial statements, Early Growth Financial Services works with companies to assess their needs and provide the right kind of support.
All of the company’s CFOs have operational experience working as CFOs for at least two venture-backed companies. Six CFOs came out of public accounting backgrounds and two came out of finance MBA backgrounds. All senior accountants and controllers have 10 to 15 years of experience, primarily, working with early-stage companies. The business thrives on the relationship and successful strategies it can share with clients, so a great deal of time is spent on finding the right people to round out the EGFS team.
CEO David Ehrenberg founded Early Growth Financial Services to provide a service that he couldn’t find when he himself worked in early-stage companies: high-quality accounting and strategic financial consulting services on-demand. He saw a real need in the market for a company, with standardized processes and procedures that would take a professional approach toward accounting and finance support for early-stage companies and ease their burden of funding full-time financial personnel.
After graduating from Georgetown University with degrees in accounting and finance, Ehrenberg started his career on Wall Street, where he did mergers and acquisitions work for Deloitte & Touche. He then went on to earn his MBA from the University of Washington.
Prior to deciding to found EGFS, Ehrenberg worked with companies at every stage in the development process. At Abound Logic, he was the company’s first CFO and an integral part of building the company’s finance and administrative infrastructure. At Microsoft, Ehrenberg served as a controller for a division focused on creating new products and business solutions. At Extreme Networks and Voice Stream Wireless, he was a member of the finance team during a period of rapid growth and expansion. At Radiant Research, as the VP of finance, Ehrenberg was responsible for selling the company in two transactions and ensuring that investors and management had a successful exit.
When Ehrenberg finally founded Early Growth Financial Services in early 2009—at a time when the market landscape was incredibly scary—money was scarce and few new companies were being started. In the midst of this financial crisis, the 100% bootstrapped company was forced to work hard to be the best and the strongest. Ehrenberg kept expenses lean with low overhead and no corporate infrastructure, relied on contractors, and focused on business development in a big way.
EGFS found a place in the market by focusing on clean tech when it was booming, but before anyone else was focusing on it. Then the company shifted to tech development in San Francisco just as tech was starting to boom in that city. Now Early Growth Financial Services is expanding into Santa Monica and Venice, keeping pace with the tech boom there, always trying to stay one step ahead of competitors such as Ravix, Kranz and Associates, Rose Ryan, Brenner Group, and Accretive.
Ehrenberg’s team has a wide-ranging expertise and strong reputations with investors. Each EGFS client is assigned to a specific CFO with the necessary expertise. Clients can lean on their assigned CFOs for whatever level of service and support they require. The company differentiates itself from the rest of the market by the services offered as well as with the growing reach of its consultative services.
The company’s top target segments are entrepreneurs in tech. As it continues to grow beyond its 160-client marker, EGFS will continue to work with its core tech segment, but it also aims to grow beyond tech, with entertainment likely being the first market. The company currently serves customers such as Formspring, Zendesk, TechShop, RocketSpace, and Klout.
The market potential is huge and potentially includes all early-stage small companies in any industry and region; however, EGFS tries to focus on those areas where there appears to be potential for growth. So far, that has been a successful strategy.
Pricing depends on client size and service needs and is determined separately for each customer, but the average price range is $500 to $2,000 per month.
In 2011, the company stood at $1.3 million in revenue and expects to earn at least $3.5 million in 2012. Since the company’s inception in early 2009, it has experienced steady growth, increasing revenue each year by nearly 100% or more and doubling in size by every measurable metric.
Currently headquartered in the Bay Area, Early Growth Financial Services is transitioning from the start-up stage as a regional player to becoming a national player. It has additional operations in Los Angeles, San Diego, Seattle, and New York City, with plans to continue expanding throughout the U.S.
Right now, EGFS is focused on building a national firm that addresses the finance and accounting needs of multiple different segments in the market. The company has a projected goal to reach $75 million to $100 million in revenue in ten years.
In 2010, Sramana Mitra founded the One Million by One Million initiative to help a million entrepreneurs globally to reach a million dollars in annual revenue, build $1 trillion in global GDP, and create 10 million jobs. In 1M/1M, she teaches the Entrepreneur Journeys (EJ) methodology to entrepreneurs around the world.