If you just raised a $30-60+ million Series A and are relying on anything in this article, you will have bigger problems. It is this self-righteous approach to finance/accounting that gets companies into trouble down the line.
Hey man, the target audience is normal Seed/Series A companies —
$30m–60m+ Series A rounds are extreme outliers, especially in 2023, and the $1m MRR number you quoted in another comment is 5x higher than where most Series A companies are at.
Would genuinely appreciate feedback on anything specific in the post that you disagree with, with that target audience in mind :)
So this is the level of finance/accounting sophistication now expected for a business with a valuation of $30m–60m? Maybe I'm out of touch. I think this guide lowers the bar unnecessarily.
It's really not. The overall tone is "You don't know anything about finance/accounting as an inexperienced leader but that's okay! - Just outsource it! Oh and here are some tidbits so you can pass off as knowledgeable in conversation"
It's not tone - it's explicitly targeted at people who don't know much/anything about finance/accounting and almost by definition are relatively inexperienced at running a business.
There isn't a great alternative. Taking the time to become an expert certainly isn't a good idea. Hiring a CFO with seed money isn't a good idea.
This is not a helpful comment. Why not point out the actual issues, instead of just calling it "self-righteous", and assuming everyone understands what you mean?
I don't have time to go into details but the very big problems you could encounter mainly revolve around misses on compliance because you took a very lax approach to Finance ie. accounting standards, tax rules, payroll records, stock options and more. Just as a very simple example - I've seen a $1 million MRR company get eviscerated for not paying attention to something as basic as sales tax rules.
Most finance rules are quite reasonable and problems can be fixed retroactively. A serious company should absolutely approach their financial controls with the rigor it deserves but the cost implication of making mistakes early on is overblown.
If a company is turning over tens of millions per year and has missed something as basic as taxes then yes, absolutely, pain is inevitable, but it’s both solvable (after all, they’re doing tens of millions in revenue!) and very different from the type of problem a startup might encounter if they are cavalier with their finances early on.
The OPs post is of great benefit because often the key to avoiding problems is going from oblivious to aware… and so while a post like the OPs may not be exhaustive, it does put people on the right path, as it is heavy on the recommendations of getting a professional involved — and explains how to do that in a very accessible way.
How many startups have died because they didn’t know they had to charge sales tax? How many startups have died because they spent hundreds of hours obsessing over operational minutiae before they earned their first dollar?
(I don’t know the OP, but coincidentally I have worked with one of the companies he recommends, and I was very impressed — it’s clear to me this isn’t just churned out content marketing that uses the first Google result for “accountant”)
This would be more interesting if you did have time to go into details. I'd love to hear about the company getting eviscerated for messing up sales tax.
If someone doesn't pay taxes, they are in trouble. It doesn't it need to be in this write up. Taxes are always there, always complicated and always need to be calculated and paid.
It's a write up on finance basics, not a treatise on all issues at the intersection of finance/legal/compliance.
This article and many like it "assign fault" to the labour by making too many assumptions about the cause of the decrease in labour productivity being a decrease in labour effort, motivation etc. In reality, this just a misrepresentation of the metric. Not sure why you don't think this would anger some people.
The fault lies in whoever took the decision of ofshoring most high productivity manufacture jobs elsewhere. The service sector is not subjected to huge productivity gains. If one works flipping burgers or serving tables, productivity of individual workers is mostly bound. There is no Moore law increasing the number of burgers flipped or tables served per worker per year.
I view it as the vector of my past experiences and knowledge. Though, I do have to be careful not to conflate gut with excess of any emotion ex. greed, hope etc. I am also carefully aware of when the "rules of the game" might be changing but that might be the "data" you are describing.
Agree completely. I like the point on disagreement of value and OP should be prepared to move on.
I just want to add that OP should negotiate for the future and not get too hung up on trying to recover the past or think they are entitled to any equity appreciation they missed out on. Sticking too much to principle might just leave resentment lingering. While it is possible to negotiate to make up for the past I think there is more value in focusing on the future.
ie. Even if OP negotiated harder now, the equity is unlikely to be gifted to make up for the past. It may come in the form of vesting options but that will likely be structured to only gain value from the time of grant (now) onwards. That... or OP will get lower % equity than would have been received in the past. Knowing this, I think it is still better to correct it going forwards than worry about any missed appreciation.
"...the retail giant has pledged to become the Earth's Best Employer, not just for frontline warehouse workers but for corporate and technical employees, too..."*
* As long as it doesn't interfere with the share price and exec bonuses
Barely a day goes by without a story about how badly Amazon treats it's non-tech workers. Combine that with the stack ranking and, like you, I'm not convinced.
I would argue you can't fix the tech employment without fixing the rest. One bleeds into the other. I would never consider working for a company that can't treat it's more replaceable employees well.
I love how you worded your advice here and I agree this is the best approach because macroeconomics is a "social science".
Everything you hear and understand about central banking as it exists today is just part of the prevailing school of economic thought. It is not the only way forward and many would argue it is not even the best way forward (but we are always led to believe it is)
