Enabling Predictable Growth: The Role of Finance and Operations in a Startup

Autumn is upon us and it is the last 7 days of Q3. With Q4 around the corner and 2021 planning underway, I wanted to share some thoughts on an important yet infrequently covered topic.

One of the desired (and necessary) outcomes of the past 8 months is that the importance and value of Finance and Operations has been elevated within a business, especially for a fast-growing startup. Due to high uncertainty and greater cash constraints, businesses need to cut back on non-essential spend including investment into experimental growth which is often challenging to replicate.

When speaking with founders of B2B software startups, particularly those with a technical background or no prior experience working with an experienced SaaS CFO, I find a bulk of the discussions center around defining the day-to-day role and best practices for startups varying in maturity and complexity.

Further, the urgency behind hiring a Finance leader only becomes apparent when the Board starts digging into key numbers reported, or a failed or challenging fundraise due to unclear unit economics or evidence of predictability.

These issues are a byproduct of under-investment into Finance and Operations, as well as most likely, sub-optimal agility and alignment when it comes to business strategy and go-to market execution. Investing in a solid Finance and Operations function early in a startup’s journey provides the business with data and intelligence to make better, faster decisions, as well as optionality to raise capital when it chooses to rather as a necessity or constraint to future growth.

Would you build a house before designing a clear blueprint and laying a solid foundation that can last for many years to come?

While many investors have written about product-market fit and go-to market success from a product and commercial perspective, for instance, the beloved SaaS Funding Napkin from Point Nine (2019, 2018), very few discuss the role of Finance and Operations in enabling scaling success and how these functions should look at different stages of growth.

I found the following articles provided practical insights and framework:

  1. The CFO in Crisis Mode (a16z)
  2. Hire a CFO (a16z)
  3. VP of Finance: The Non-Obvious Hire (FirstMark, Matt Turck)
  4. VP Finance vs CFO (AVC, Fred Wilson)
  5. The Cadence (David Sacks)

In a collaboration with Slush, a leading European tech and startup conference (run by students!), I am hosting an one-hour mentoring session tomorrow from 4–5pm CEST on “How to Design a Finance Function that enables Predictable Growth” alongside Jan Willem Meijer, Director of Commercial Operations at Falcon and Jacob Quartier, VP Finance at Showpad. Both Jacob and Jan have experienced the rollercoaster journey of scaling a B2B software startup from 50–100 people over 5 years ago to 400–450 people strong today.

The session is intended for founders, VP/Head of Finance, VP/Head of Business or Revenue Operations, and general enthusiasts of early stage B2B software companies who would like to better understand, measure, and communicate the role of Finance and Operations in enabling predictable growth and global go-to market success.

If you’re interested in participating, please send me an email and I will make sure you receive an invitation. Happy 2021 budgeting!

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Joyce Mackenzie Liu

Joyce Mackenzie Liu

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European Tech 🚀 Founder of Pegafund 🐎 Software Investor 🤖 Writer🖋️ 3rd Cultured 🌍 Foodaholic 🐷 Yogi 🧘🏻‍♀️