How to Be Audit and Due Diligence Ready at All Times

There’s at least one characteristic shared by most seed companies that achieve a successful exit: an early focus and emphasis on audit and due diligence preparedness. Unfortunately, many owners and CFOs don’t think about this as early as they should, which can lead to delays in deals getting done and lower deal values.

Why Early Preparation is Critical

A lack of audit and due diligence preparation can lead to lead to a number of problems, such as:

  • Internal control issues
  • Delays in deal completion
  • Higher deal costs
  • A lack of proper documentation
  • Overwhelmed staff

In a worst-case scenario, a lack of early preparation can lead to failing the audit and due diligence phase of the deal. Conversely, being audit and due diligence ready at all times can yield a number of benefits, such as:

  • A fast and simple due diligence and process
  • Lower audit fees
  • Less strain on employees
  • Preservation of valuation
  • Accelerated exit

Due diligence is part of a liquidity event, so it’s never too early to start planning for it. Follow these three tips to help your company be audit and due diligence ready at all times.

  1. Set Goals and Expectations

Start with the end in mind: What will you need to support a due diligence exercise? Of course, this starts with a set of financial controls and processes that will result in a clean audit. You’ll also need an approach to document management and a plan that supports an efficient and timely audit. Treat each audit as practice for when you’ll be going through due diligence.

Create a standard due diligence checklist (your banker or attorney can help you with this) and map your internal processes to the data needs outlined in the list. Not all items will be within your operational purview, so share non-financial items with other leaders to help them prepare. Often, the most troublesome areas are contract management and employee document management. You can save a lot of time in due diligence by keeping them well-organized and up to date.

A few questions to ask:

  • What are your financial and organizational goals?
  • What are your prescribed audit requirements?
  • What is the timeframe for a potential sale?
  • Are there proper staffing, processes and controls in place?
  1. Build Relationships

Identify and build relationships with professional service providers such as your Finance as a Service (FaaS) provider, banker, attorney, CPA and insurance broker. Tap these relationships regularly throughout the year — don’t just wait until it’s audit time to talk to these professionals. 

Consero, a Finance as a Service provider hosted a webinar titled: 3 Tips to Be Audit Ready And Why It Matters. The discussion was led by Mike Dansby, a CFO with more than 35 years of combined management and consulting experience in multiple industries including software, tech, and services. Leveraging a Finance as a Service partnership ensures you will be GAAP and ASC 606 compliant while also being Audit and Due Diligence ready. 

Consult with an audit firm to set a timeline that works for everyone and also talk to them about complex audit requirements. Many companies are now choosing to do their own quality of earnings analysis before going to market. Talk to a provider to find out how they might approach this and then incorporate their viewpoints into your internal reporting and review processes. The key is to gather as much data as you can ahead of time so the deal isn’t held up later when you’ve got a buyer.

  1. Make Document Preparation an Ongoing Process

Document preparation should be an ongoing process throughout the year — not a one-time event when there’s an audit. This requires documented and updated policies and procedures along with monthly balance sheet and account reconciliation. This can serve as the basis for audit review schedules, thus minimizing audit prep schedules.

Also stay up to date on accounting standards and pronouncements like those from the AICPA and remain GAAP-compliant at all times. And work with your human resources team to make sure employee documents are organized and digitized. Pay especially close attention to proprietary information agreements and intellectual property assignments. It’s nearly impossible to get these from employees after they’ve left the company.

Consider these specific document preparation steps:

  • Record company accounting and financial policies
  • Gather documents on internal control processes
  • Prepare reconciliation documentation for financial statements
  • Anticipate audit procedures and due diligence requests when designing day-to-day processes

How FaaS Can Support Audits and Due Diligence

Audits and due diligence exercises don’t have to be a necessary evil. You can impress your auditors, owners and prospective buyers by planning for these activities ahead of time and building their considerations into your day-to-day processes.

Consero Global offers Finance as a Service (FaaS) that can support your audit and due diligence efforts. FaaS is a modern alternative to building an in-house finance and accounting team that delivers greater financial visibility and improved operational scalability, along with a lower and more predictable cost structure. 

Contact with us to learn more about how FaaS can help you be audit and due diligence ready at all times: https://conseroglobal.com/request-a-consultation/

 

3 Tips To Be Audit And Due Diligence Ready, And Why It Matters with Mike Dansby

How can you maximize the value from your audit and/ due diligence process? You may have had challenges with your audit or be in the midst of planning for the next one. It’s possible your company may be pursuing the next round of funding. How can you be better prepared? How can you maximize the value of your business?

Join Consero’s webinar to hear real stories – the good, the bad, and the ugly – directly from Mike Dansby, a CFO with more than 35 years of combined management and consulting experience in multiple industries including software, tech, and services.

You’ll learn how you can reduce your audit risks and help your organization to be audit and due-diligence-ready.

In this 45-minute webinar, you’ll discover:

* How to improve your process for preparing audit and due diligence-ready financials
* Why having buttoned-up financials at all times is critical to valuation
* Ways to ensure your company successfully completes an audit and due diligence

Learn more about how you can quickly get an efficient and audit-ready finance function: https://conseroglobal.com/request-a-c...

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The Major Challenges Heading Into 2023 — and How CFOs Will Meet Them

There’s a long list of challenges facing CFOs heading into 2023. These include, but certainly aren’t limited to, ongoing supply chain issues, rising interest rates and energy costs, persistent inflation and slowing economic growth. CFOs should be asking themselves what can they do now to prepare for these challenges?

Biggest Challenges Currently Facing CFOs

In a survey conducted by Gartner in July, more than half (54%) of CFOs said that hiring and retaining staff is the biggest challenge they will face over the next 12 months. This was followed by accurate forecasting (36%) and strategic cost cutting (35%).

Commenting on the survey results, Gartner Vice President Marko Hovart stated: “The top three challenges are a reflection of CFOs’ struggles to manage against a backdrop of persistent inflation and unusually high macroeconomic uncertainty. CFOs need to identify the few critical areas where investments should be accelerated, such as human capital and digital investments, while optimizing costs against a backdrop of stubbornly high inflation. This is no easy task.”

Raising compensation, of course, is one way to hold onto employees, but this strategy alone won’t solve the problem. Instead, companies should refine their employee value proposition to reflect the expectations that many employees have now from their employers, such as more flexible work hours for a better work-life balance. Companies should also reexamine their recruiting strategies to make sure they are leaving no stone unturned when to comes to finding the right employees to fill open positions.

Driving Growth by Using Technology

As the finance leaders of their organizations, it’s important for CFOs to understand how to drive growth in the face of rising operational costs. Potential strategies include identifying new customer segments and revenue streams, as well as new product and service lines that can help ignite growth. New partnerships and acquisitions, along with fresh new sales and marketing strategies, can help accomplish this.

Technology can also help CFOs meet these challenges. Hovart mentions robotic process automation (RPA), machine learning (ML) and natural language processing (NLP) as a few technologies being used in the finance function to increase speed, accuracy and auditability. “What’s important is the ability to translate these digital workflows back to traditional workflows and stakeholders to explain how these technologies interact and improve them,” he stated.

At the same time, CFOs must be able to find finance employees who are comfortable using technologies like these and also possess the needed finance experience. “Finding talent that is willing to constantly evolve while at the same time relate back to the traditional way of doing things is a difficult thing to do,” Hovart stated. Some candidates may have the technology skills, but not enough finance and accounting experience, while others will have the necessary finance and accounting experience but not enough tech savvy.

Improving Forecasting Accuracy

Tools for improving forecasting accuracy vary from one company to the next based on how digitally mature they are and certain prerequisites that must be met. The best way to improve forecasting accuracy is to make sure that the company’s operating and financial models are in alignment, so the correct drivers of business performance are captured and analyzed.

A variety of tools are available to help companies build better forecasting models for improved operational management. These include ERP export modules, relational databases (e.g., MySQL) and power visualization software (e.g., Power BI).

Hovart recommended focusing on the short term to allow for testing of assumptions, as well as establishing metrics that enable tracking progress against benchmarks. “Broadly speaking, a good framework would be for the CFO to break down the components of what exactly makes up ROI, cost, return and risk and see if the investment reduces cost, increases returns and/or reduces risk,” he stated.

In the current environment, however, there are many external factors that affect a company’s ability to control costs. This has led to a greater focus on maximizing return and reducing risk with, as Hovart put it, “the hands that CFOs are being dealt.”

Using FaaS to Meet CFO Challenges

One strategy CFOs can implement to meet these and other challenges heading into 2023 is to outsource their finance and accounting function by switching to Finance as a Service (FaaS). The FaaS model allows companies to quickly scale up the finance function, standardize reporting across portfolio companies and reduce costs.

With FaaS, CFOs can focus on more impactful business initiatives while reducing the cost and complexity of maintaining an in-house finance operation. Employees can reallocate their time from administrative finance functions to high-impact business development initiatives, while companies can reduce staffing and technology costs in the finance department.

FaaS also provides more control over finances than traditional accounting systems. This will enable finance employees to spend less time on administrative tasks by eliminating the need for manual data entry while eliminating work cycle delays with automated processes and workflows.

To learn more about the benefits of FaaS and Consero’s integrated finance and accounting platform, please contact us at https://conseroglobal.com/request-a-consultation/

CFO of Roberson Stephens Gets Efficient Finance & Accounting Function From Scratch

David Westbrook, CFO of Robertson Stephens, shares his past experience joining the company under the sponsorship of Long Arc Capital and a brand new management team.

Learn how Robertson Stephens leveraged Consero’s Finance as a Service to reduce time spent on building an F&A function and how Consero provided:

  • A turnkey, fully managed back-office
  • Access to a reliable and skilled finance team
  • Advanced reporting to support digital transformation
  • Support for add-on acquisitions
  • A back-office team to offload transactional roles so David could focus on investment growth
  • Take a look at why Finance as a Service and a fully managed financial solution could be a fit for you

Quotes from David Westbrook:

  • “Consero gives me time to put my attention on the growth thesis. 50% of my time is on M&A which I would not have time to do without Consero’s support. “
  • “The story is simple, Long Arc came to me and said “David, we can hire you and only you. You wouldn’t need to hire a team or find an accounting system, Consero can bring all of that to the table.””
  • “We receive a full suite of services from Consero – from HR, payroll, benefits, interface for AP to general ledger – Consero takes care of everything. I just sit at the top of the pyramid and complete final approvals.”
  • “Consero helps significantly with getting audits done timely and providing the reports auditors need. I can actually go away on winter vacations, which was something I was never able to do previously. I know Consero has things under control with the auditors and I don’t need to worry.”
  • “We have well thought out processes and appropriate segregation of duties, all thanks to Consero. That makes not only the auditors happy but also our investor because they can see that we have the proper controls and have mitigated risk of financial fraud. There is a dual protection from having auditors and Consero review the finances.”
  • “As much as I like QuickBooks for small businesses, I hate QuickBooks from a control perspective. I have audited many firms that use QuickBooks, and it is painful from an audit point of view.”
  • “In regard to SAP implementation, I have never met one that was on time or on budget ever. Consero had us up and running within a week. I wouldn’t have even been able to produce a list of accounting packages to consider in the same amount of time that we went from having nothing, to being fully functional.”
  • “When they brought me on board, I could have focused on all the building blocks needed to get a finance function in place but then I would not have been focused on building the business which is what they needed me to do.”

Schedule a 30-minute intro today: reserve your time here.

 

Signs Your Organization Has Outgrown its Finance & Accounting Software

According to a survey by Sage Intacct, over one-third of financial executives are actively searching for finance and accounting software alternatives. Whether you are on QuickBooks, or Zero, you may be experiencing some limitations of the finance & accounting software you implemented early on in your startup days. But when is the right time to migrate to a new, more advanced solution?

Watch this on-demand webinar where our presenters identify the major signs an organization has outgrown its current finance and accounting software. They will provide suggestions on what alternatives your peers are using. We will also be speaking with a finance leader who has recently moved off QuickBooks, and why.

If you would like to discuss your unique circumstance and how to accelerate your finance function, connect with us here.

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CFO of Roberson Stephens Gets Efficient Finance & Accounting Function From Scratch

David Westbrook, CFO of Robertson Stephens, shares his past experience joining the company under the sponsorship of Long Arc Capital and a brand new management team.

Learn how Robertson Stephens leveraged Consero’s Finance as a Service to reduce time spent on building an F&A function and how Consero provided:

  • A turnkey, fully managed back-office
  • Access to a reliable and skilled finance team
  • Advanced reporting to support digital transformation
  • Support for add-on acquisitions
  • A back-office team to offload transactional roles so David could focus on investment growth
  • Take a look at why Finance as a Service and a fully managed financial solution could be a fit for you

Quotes from David Westbrook:

  • “Consero gives me time to put my attention on the growth thesis. 50% of my time is on M&A which I would not have time to do without Consero’s support. “
  • “The story is simple, Long Arc came to me and said “David, we can hire you and only you. You wouldn’t need to hire a team or find an accounting system, Consero can bring all of that to the table.””
  • “We receive a full suite of services from Consero – from HR, payroll, benefits, interface for AP to general ledger – Consero takes care of everything. I just sit at the top of the pyramid and complete final approvals.”
  • “Consero helps significantly with getting audits done timely and providing the reports auditors need. I can actually go away on winter vacations, which was something I was never able to do previously. I know Consero has things under control with the auditors and I don’t need to worry.”
  • “We have well thought out processes and appropriate segregation of duties, all thanks to Consero. That makes not only the auditors happy but also our investor because they can see that we have the proper controls and have mitigated risk of financial fraud. There is a dual protection from having auditors and Consero review the finances.”
  • “As much as I like QuickBooks for small businesses, I hate QuickBooks from a control perspective. I have audited many firms that use QuickBooks, and it is painful from an audit point of view.”
  • “In regard to SAP implementation, I have never met one that was on time or on budget ever. Consero had us up and running within a week. I wouldn’t have even been able to produce a list of accounting packages to consider in the same amount of time that we went from having nothing, to being fully functional.”
  • “When they brought me on board, I could have focused on all the building blocks needed to get a finance function in place but then I would not have been focused on building the business which is what they needed me to do.”

Schedule a 30-minute intro today: reserve your time here.

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How Outsourcing Can Help Emerging Hedge Fund Managers Stay Focused on Managing Investments

There’s both good news and bad news for emerging hedge fund managers in a new report from Hedgeweek. First, the good news: Emerging managers have outperformed hedge funds for three consecutive years by an average of 4.8%.

Despite this, investors remain hesitant to invest in emerging managers who don’t have a strong industry reputation, solid capital base or structured team. These are the results of the latest Industry Report from Hedgeweek, The Next Generation: How emerging managers are adapting to the new hedge fund landscape.

Capturing Investors’ Attention

The Hedgeweek report makes it clear that emerging managers are struggling to capture the attention of hedge fund investors. More than eight out of 10 emerging managers (defined as those with less than $300 million in assets under management, or AUM, and fewer than five years of experience) say that attracting investor flows is their single biggest challenge during the initial launch process.

Despite this positive performance and their reputation at previous firms, nearly half (46%) of emerging managers said that it’s harder to raise capital now than it was a year ago. Two out of 10 consider a lack of an established track record and industry reputation to be major hurdles to raising capital.

One survey respondent put it this way: “You may have someone who has a ten-year track record in a particular strategy launching by themselves and even though you can follow the breadcrumbs of the track record, investors are still reluctant. It is frustrating,”

Caution Abounds

It’s not really surprising that after a rough start to this year, some hedge fund investors have decided to err on the side of caution. As another survey respondent put it, they’re looking to avoid the next “blow-up” and don’t want to take on what they perceive to be more risk with an emerging hedge fund manager. But while there may be more risk, emerging managers do offer value and the potential for strong returns, as the Hedgeweek report makes clear.

For example, emerging managers often bring innovation and a fresh perspective to hedge fund management, which can lead to novel approaches to their strategies. Complacency, on the other hand, can lead to sub-par returns. In the 2022 Alternative Investment Allocator Survey conducted by Seward & Kissel, more than 70% of investors said they have invested in managers founded under two years ago.

Investors tend to look for three key attributes in hedge fund managers:

  1. The manager’s return history and previous experience.
  2. Enough AUM to cover operating expenses and business risks to ensure that investors are getting the exposure and returns they expect.
  3. Proof of concept and faith in the manager’s investment process to give investors confidence that the firm will grow over time.

An Early Path to Institutionalization

According to one survey respondent, emerging hedge fund managers need a path to institutionalization early in their life cycle in order to meet investors’ expectations. “Investors aren’t waiting on the sidelines for new managers to produce a three-year track record,” he said. “They’re making allocations earlier in a fund’s lifecycle, and with earlier support comes accelerated expectations.”

One way emerging managers can stay focused on managing investments and attracting new investors is to outsource the fund’s finance and accounting functions to a third-party service provider. This will free up fund managers to spend more time focusing on alpha generation.

These services are sometimes referred to as Finance as a Service, or FaaS. FaaS goes beyond outsourced accounting to include a full suite of staff to support startup and launch efforts, payroll and HR support and financial records and planning services along with software that’s capable of managing the firm’s finance and accounting operations. In other words, FaaS is a one-stop financial and accounting services shop.

FaaS features flexible and transparent pricing, which makes it easy to forecast costs as the fund’s needs change in the future. This means that a FaaS provider charges based on the service offered, not by the hour or based on the level of staff assigned to the firm. As a result, hedge funds know exactly what they’re paying for and how their costs will rise or fall as they scale up or down.

Consero: The FaaS Specialists

Consero offers Finance as a Service to emerging hedge fund managers, PE/VC firms and their portfolio companies. If you would like to discuss the potential benefits of FaaS for your fund, please request a complimentary consultation

 

How Consero gave Robertson Stephens a reliable finance & accounting function so they could focus on their next era of growth

ROBERTSON STEPHENS®

With the sponsorship of Long Arc Capital, Robertson Stephens Wealth Management (“Robertson Stephens”) declared a new era for the firm, assembling an accomplished management team, but the firm had no in-house finance function. So they turned to Consero’s Finance as a Service (FaaS) solution to free the firm to pursue its main priority: growth.

On December 17, 2018, Robertson Stephens announced a new beginning under the sponsorship of Long Arc Capital and a brandnew management team, including a new CFO, David Westbrook. However, the previous incarnation of the firm was winding down, leaving them with an internal finance team that consisted of a one temporary employee. Consequently, they didn’t have the people, infrastructure and processes needed to prepare for growth.

Long Arc Capital knew this and chose BridgeView CFO Solutions, which was eventually acquired by Consero Global, to deliver their Finance-as-a-Service solution, even before hiring the CFO. “If we were to build an in-house team from scratch, I’d have to spend the first six months, and most likely the first year, getting the team up and running,” says David Westbrook, Robertson Stephens’ new CFO. “But by the time I joined, the finance function had been established and operating effectively for some time already.”

“I didn’t have to investigate what GL to use or what payroll system was best for our needs. I certainly didn’t need to source all the talent we needed for the finance function, so we got a topnotch team with all the relevant skills and experience without the time-consuming task of recruiting, training and retaining a team. – David Westbrook. CFO,

A turnkey and fully managed back-office solution

Consero gave Robertson Stephens a turnkey and fully managed back-office solution, with a number of choices already made. “I didn’t have to investigate what GL to use or what payroll system was best for our needs,” says Westbrook. “And I certainly didn’t need to source all the talent we needed for the finance function, so we got a top-notch team with all the relevant skills and experience without the time-consuming task of recruiting, training and retaining a team.” Early on, Robertson Stephens realized they didn’t need to hire a deep bench in-house because Consero would provide all the finance and business functions for them.

Consero’s solution allowed Robertson Stephens to recruit the right CFO for more than their ability to handle the administrative aspects of the role. David Westbrook joined the team after a long tenure serving as CFO for Rockefeller & Co., an $18 billion investment advisory firm. He was tapped to tackle the administrative tasks that Consero didn’t handle. But even there, Consero was able to help Westbrook source additional service providers that investment management firms need.

Beyond the value of outsourcing

“I moved to San Francisco for this position, so I didn’t have the same network of people I could tap for our HR, legal, tax and other administrative needs,” says Westbrook. “But they [Consero] had great referrals and a deep understanding of how best to work with TriNet, who we ended up tapping for our first PEO.”

In this way, Consero became more than a service provider but a trusted partner that contributed well beyond the parameters of a contract. As a result, Robertson Stephens didn’t need to hire a single in-house finance team member until just recently, when Westbrook brought aboard an analyst to help him with responsibilities outside of Consero’s model.

Diana McDonough, EVP of Investment Manager Services at Consero, explains: “When you can offer deep expertise at every level of business management, including HR and payroll, it goes beyond the initial value proposition of outsourcing, and you are more than a resource for the client. You are a partner.”

This lean staffing was all part of the new iteration of Robertson Stephens, which was remade as essentially a start-up with less than a dozen employees, although it was a start-up with ambitious plans for growth. They didn’t jus need an outsourced finance & accounting function that was ready in a matter of weeks; they needed one that could ramp up resources when they acquired a business or grew organically. Ultimately, Robertson Stephens grew even faster than expected.

“Our non-organic growth has been very aggressive. We’ll acquire a business, and that will mean five to ten new employees, a new location, new payroll, and the like. Consero will be able to apply the staff and expertise to get them onboarded in a week or two.” – David Westbrook, CFO ROBERTSON STEPHENS®

Primed for growth

“Our non-organic growth has been very aggressive,” says Westbrook. “We’ll acquire a business, and that will mean five to ten new employees, a new location, new payroll, and the like, and Consero will be able to apply the staff and expertise to get them onboarded in a week or two.” Then, Consero shrinks its footprint back down as the new team is fully integrated with the larger Robertson Stephens organization. “They’ve been so seamless at integrating new acquisitions that I don’t worry about onboarding anymore.”

“We are pleased with the efficient onboarding process we’ve developed for Robertson Stephens teams. By effectively addressing the ongoing needs of each new team, we have freed up management to focus on the future of the firm.” – Diana McDonough, EVP Investment Manager Solutions

Westbrook stresses how little he must fret any core functions that Consero handles. “If I shoot off a note to Consero to get something done, I know they’ll get it done,” says Westbrook. “We now have a nice cadence where we have our scheduled check-ins, but they’re very brief and to the point.” As a result, he estimates that he’s been able to devote half his time to new business development and growing the company, which has also enjoyed its share of organic growth.

By freeing Westbrook up from the basic administrative functions, he’s able to keep his eye on Robertson Stephens’ four pillars that define this new era:

  • Making the clients’ interest the number one priority
  • Providing access to high-quality alpha-generating investments
  • Using intelligent digital solutions
  • Building a legacy for clients through family office services, including tax, estate and philanthropic planning.

McDonough has worked with Robertson Stephens since the relaunch in 2018, and her team prides itself on regularly providing ongoing support on best practices, segregation of duties, depth of information, and tried and true processes for systems and services as needs arise. “We’ve felt embedded in the finance function and feel real pride in supporting their success,” says McDonough. As for Robertson Stephens, Westbrook would refer Consero to his peers for anyone looking to grow or improve but lack the mix of resources and expertise to do so.

Startup Funding Continues to Fall: How FaaS Can Help Boost Efficiency and Lower Costs for Investor-Backed Startups

After peaking at the end of last year, venture capital funding in North America has started to decline. Total venture dollar volume for the quarter ended on December 31, 2021, was close to $100 billion, but this fell to about $63 billion at the end of this June, according to data compiled by Crunchbase. This was a decline of 27% from the end of March and 25% from a year earlier.

The funding downturn has been especially sharp in the technology, healthcare, software and life sciences industries. This has spilled over into private startup valuations. Investors have not been investing heavily in pre-IPO rounds, which has also contributed to the downturn.

Breaking Funding Down by Stages

The sharpest funding declines occurred in the late-stage and technology growth rounds. A total of $36 billion was invested into these growth rounds in the second quarter of this year, which was down 33% from the first quarter and 30% from a year earlier. This marked the lowest quarterly funding total at this stage since 2020.

Round counts, meanwhile, fell to 371, which was down 25% quarter-over-quarter and 27% year-over-year. Big late-stage financings were done despite cuts and contracting valuations at many unicorns.

Early-stage investing has seen less contraction than late stage. A total of $23 billion was invested in Series A and B startups in the second quarter of this year, which was down 15% from the first quarter and 17% from a year earlier. Round counts fell to 1,015, which was down 15% from the first quarter and 20% from a year earlier.

Seed-stage funding remained near historic highs in the second quarter, though it was down from its peak at the end of the first quarter. A total of $3.5 billion was invested in seed-stage companies in the second quarter of this year, which was down 30% from the record-setting first quarter and 6% from a year earlier. However, round counts fell to about 1,300, which was the lowest level in more than two years.

VC-backed Exits and Acquisitions

With regard to venture-backed exits, these are mostly coming from acquisitions. Acquirers bought VC-funded companies at a brisk clip, including several for more than $1 billion. While a few VC-funded companies made market debuts in the second quarter, the IPO window was mostly closed. 

As this data shows, the second quarter wasn’t great for VC-backed startups. Startups are facing more pressure to reduce burn and preserve cash reserves, especially given falling public market comps for unprofitable technology companies.

But there is a silver lining: Given the fact that the funding downturn has been much more pronounced at the late-stage growth rounds, investors seem to be more confident about the prospects for early-stage and seed-stage deals. These deals stand a better chance of reaching maturity under better market conditions.

Boost Efficiency and Lower Costs with FaaS

With the slowdown in venture capital funding, many companies are looking for areas where they can boost efficiency and lower costs. One way to accomplish this is to outsource the finance and accounting function using Finance as a Service, or FaaS. This approach goes beyond outsourced accounting to include:

  • A suite of remote and skilled finance & accounting staff
  • Well-documented processes with digital workflows
  • Cloud-based software that’s capable of managing the entire finance and accounting operation

Using the FaaS model can help PE and VC-backed businesses grow quickly while maintaining a low-cost finance and accounting function. FaaS offers flexible and transparent pricing, which makes it easy to forecast costs as a company’s needs change over time. The FaaS provider charges based on the services offered, not by the hour or based on the level of staff assigned.

In other words, you only pay for the finance and accounting functions you need, when you need them. As a result, you know exactly what you’re paying for and how your costs will change as you scale up or down.

Consero: The FaaS Specialists

Consero offers Finance as a Service to growing investor-backed businesses. Get an optimized finance and accounting function using FaaS and increase efficiency while reducing costs in the current tight finding environment. 

Contact us by requesting a complimentary consultation to discuss your situation in more detail.

2022 CFO Survey with Consero and Jack McCullough

We invite you to review the full results of the survey by clicking here:
https://conseroglobal.com/2022-cfo-su…

In this video, we explore what CFOs of institutionally backed companies are grappling with. Special guest Jack McCullough, the Founder of the CFO Leadership Council, provides insights to this conversational webinar on trends and topics uncovered in the survey results.

Bartley O’Dwyer and Tony Esposito join Jack to discuss:

-The optimal state, size and organizational structure for a F&A function as a business scales
– Where CFOs should consider investing at different inflection points as a business scales
– Hidden costs and spending time on value-driving activities

The results were based on the responses of 100 PE-backed CFOs. Please feel free to download this complimentary report to discover how CFOs are optimizing for growth.

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