John Glasgow

KNOW YOUR REAL BUSINESS ECONOMICS • GAAP Revenue • Cash Flow • Cash • Contribution Margin • CAC • CAC Payback FUNDRAISING: PRESENT & SUBSTANTIATE FINANCIALS • Investor needs to know what your forecasts are • They need to believe them David Weiden, Khosla Ventures

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Cash > Profits 💸 👆 This is what Fractional CFOs keep telling us. We’ve interviewed dozens of fCFOs this quarter to better understand their world and what’s working. And, when we get to the topic of 𝗖𝗔𝗦𝗛 𝗙𝗟𝗢𝗪, they're a united front... “Cash first. Then, profits.” 💵 Cash pays your employees. 💵 Cash pays your contractors. 💵 Cash brings confidence to innovate. 💵 Cash secures you better deals with the banks. 💵 Cash keeps you afloat when times are tough. This isn’t about cash vs profit. Of course, both are important in a healthy business. But an awareness of cash helps bring a sense of 𝗰𝗮𝗹𝗺, 𝗮𝗹𝗶𝗴𝗻𝗺𝗲𝗻𝘁 𝗮𝗻𝗱 𝗰𝗹𝗮𝗿𝗶𝘁𝘆 in the storms. Having a consistent and clear view of where the cash is will bring focus to decision-making in a way that profit alone can’t. Fractional CFOs are helping businesses manage cash – using technology to bring accuracy and precision to their cash flow modelling. Critical work that enables businesses to keep moving forward to profit, sustainable growth, and beyond. #fCFO #cashflow PS. DM if you’d like to know more about how fCFOs are improving cash flow modelling for their clients. Super simple steps.

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YC founders: here's a harsh truth that might help you when hiring. Great people want to work with great people. But...A-players hire A-players. B-players hire C-players. Keeping the hiring bar relentlessly high is critical, especially early on. A single person that isn’t great can drag the quality down of the entire team. Folks will look around and realize the standards are lower than they thought. They’ll realize that they don’t need to be as good. They’ll realize they can learn less from their colleagues. People make the organization, not the other way around. And that if you don’t have great people, you won’t have a great organization.

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EmergeOne CFOs have to be ready to handle anything, and sometimes, laughter is the best way to deal with the feels. Like if you're a fractional CFO and ever had any of these happen to you... 1. When your CEO asks for the monthly burn rate... just in case it changed in the last 24 hours 🤦‍♂️ 2. When the auditors ask for "just one more document" 🙄📁 3. When the board asks about our "path to profitability" 🤑💰 4. When the FP&A team asks for the 10th iteration of the budget 🤯📊 5. When the founder asks you to "just make the numbers work" 🙃💼 6. When an investor in your preseed startup asks if you've finally got to that sweet, sweet revenue 💰💸 7. When the team realises the financial forecast was just a "best guess" 🤔🔮 8. When you have to explain revenue recognition to the marketing team 📈🤷‍♀️ 9. When your cash flow statement looks like a rollercoaster ride 🎢💸 10. When you find out the new hire is a former accountant 🧮☠️ Seriously, if you're in need of a friendly neighbourhood CFO, call me, I don't bite🤙🏾

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"Only 17% of venture funds larger than $750M have ever returned to limited partner investors more than 2.5x TVPI net of fees and expenses compared to 25% of funds smaller than $350M. Said differently, a smaller fund is roughly 50% more likely to return more than 2.5x than a large fund. An even larger performance gap exists when measured by cumulative IRR, which is 17.4% in funds smaller than $350M versus just 9.7% in funds larger than $750M." * Sante Health Ventures II LP Sante Health Ventures I Annex Fund LP PitchBook https://lnkd.in/gEC5tsX8 * Calculated for all U.S. Venture Funds raised from 1990-2018. As of May 2023. Includes funds larger than $10M.

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In case you missed it last week, one of my favorite SaaS benchmark reports was released. Thanks to High Alpha and OpenView for the work and having us as a partner! This thing is stuffed full of insights on everything from growth rates, net revenue retention, ARR per FTE, and more. You can't build a great SaaS business without it! https://lnkd.in/ghKT_tBY

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Early stage founders, you should not be paying more than $100/month for your financial tech stack. We've automated away any need for bookkeeping at GoCharlie, using the tools below: Mercury - For Banking, SAFEs, payments Brex - For physical and digital credit cards, budget control, transaction tracking and spend monitoring Stripe - Invoicing, receiving payments, subscription management Puzzle 🧩🚀 - Link your Brex, Mercury and stripe accounts for real time financial statements, burn analysis, and transaction categorization. All of this is <$100 a month for us. If you're spending anymore than that, take action and put that money to work elsewhere. #startups #fintech #staylean

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Loving your customers is an underrated attribute in building companies. Do you actually like spending time with the people you serve? When we were starting out, one of the things that gave me conviction was how much I enjoyed talking to and spending time with CFOs, controllers, ops folks, etc. Finance teams, accountants, operators are generally pretty no-BS people. They're more willing than many to give you honest feedback about what you're building. They're also an often under-appreciated part of most orgs. Tons of software has been built for product teams, engineers, and sales/marketing over the last decade. But comparatively speaking, there's been less built for the back-office. That's started to change, but there's still a lot to build in these areas. Building something that solves a problem for a customer you care about is an immensely rewarding feeling. Indexing on that is an underrated driver of whether or not you should start a company or build a product than a lot of the more commonly asked questions.

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Cap Table guidance from Cake Equity and my former colleague Chris Hoffmann, ECA 🚀🧢 VALUATION & EQUITY MANAGEMENT: Companies should aim for balanced equity plans that are fair yet practical, involving vesting schedules to ensure employees earn their shares. Giving employees sufficient time to exercise options post-vesting can also prevent punitive exercise costs. This approach encourages loyalty and values employee contributions without overwhelming the cap table. HIGH ADMIN DEMAND IN LATER STAGES: In growth phases, especially Series C and D, managing cap tables becomes complex, with frequent hires, exits, and equity grants. Software platforms (e.g., Cake) are essential to keep cap tables organized, as manual systems like Excel can't handle the volume and complexity efficiently. IMPORTANCE OF DAILY & MONTHLY AUDITS: Regular audits are crucial to keep track of terminations, new grants, and board consents. Errors in terminations and grants can lead to costly issues during audits, financial reporting, or funding rounds. SECONDARY TRANSACTIONS & LIQUIDITY OPTIONS: Allowing limited liquidity for employees and early investors, such as through tender offers or company-facilitated secondary transactions, is valuable. These mechanisms offer flexibility without requiring a full exit or IPO, which has become less common due to the IPO market slowdown. CAP TABLE ERRORS CAN BE COSTLY: Historical errors in cap tables can create major headaches. Two examples highlight this:    - In one case, a series D company had to spend $100,000 to $150,000 on cap table corrections, which delayed planned transactions by six months.   - Another company had converted multiple financing rounds incorrectly, requiring a year and a half of back-and-forth with attorneys and investors to correct the errors. These situations emphasize the need to organize and verify cap table data from the outset to avoid costly fixes later. RECOMMENDATIONS FOR FOUNDERS: Early-stage companies should seek expert help in setting up and maintaining cap tables, even if through fractional CFOs or specialized attorneys. Organizing all equity-related documents digitally, using reliable software, and conducting regular audits can save time, money, and stress in the long run.

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Average SaaS companies are seeing revenue growth rates between 15% to 45% year-over-year. But here’s the kicker: those early-stage startups can sometimes shoot for as high as 144%. If you’re not keeping an eye on these numbers, are you even in the game? Is it time to rethink how you assess your startup's growth? Let’s be real—I’ve seen too many founders focus on anything but their growth rate, thinking they have all the time in the world. Whether you're part of an early-stage SaaS or an existing player, knowing your growth metrics is not an option, it’s a mandate. Disagree? Agree? I want to know where you stand. Hit me up with your thoughts and maybe check out the insights behind this claim in a recent article. And if you're a founder looking to stay sharp in the business world, my newsletter, 5 Minute Founders, dishes out the wisdom of full business books in 5 minutes or less. Get your fast fix! https://lnkd.in/eSrmqagz

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There are so many vendors, and so much noise in the market right now. It's hard to tell what anyone does, harder to figure out who’s delivering value, and impossible to differentiate one from the next. I’ve been talking to a lot of VCs lately, and they all feel it in their portfolio companies - even good companies w/happy customers, great products, and strong net retention - just can’t get the market to believe (or pay attention to) to the success they are delivering for customers. It’s a huge problem - everyone is struggling to generate pipeline and opportunities, and struggling to win new business when they do get conversations. So what are we (as a market) doing about this noise problem? YELLING LOUDER (and more often) More emails. More calls.  Emails informed by intent data.  Emails informed by AI w/intent data context.  aiSDRs. Auto-dialers, AI-driven video at scale. Inbox creation/rotation/warming.  Signal-based emails. Microcampaigns. “Quick question”.  “Are you the right person?” “Q4 Priorities at %%Company_Name%%” You can have the most advanced technical outbound setup in the world w/Clay linked up to Unify linked up to HeyReach w AI Layers and Human Layers and waterfall enrichment, and all this (pretty damn) impressive/clever tooling, and could have downloaded the entire brains of Brendan Short and Mark Kosoglow and then trained an AI on them on how to set this ^ all up... But… the gains are only incremental at best, b/c the bigger problem is the channels (ie email, LinkedIn inbox, soon to be phone) are just bombed out. My inbox certainly is a mess - but interestingly enough - I’ve gotten so good at scanning/deleting an email about lead generation services that’s clearly AI-generated in about .35 seconds - that ironically I don’t actually get that many well thought out human emails. So what’s my prediction for what works for cold outbound in 2025? Well nothing really - again the channels are bombed out and anything that does work won’t be a silver bullet and will only be a small incremental improvement.  But if there is one thing that might sort of work in 2025… I think it’s a return to manually written, well-thought out outreach. And a whole bunch of dials :) Long-term I think we need to rethink the underlying problem of trust and attention in B2B though - there’s a whole lot of energy being wasted.

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As a B2B SaaS VC 👩‍💻 and a huge data nerd 🤓, fewer things bring me more joy than a truly statistically significant analysis (600+ companies surveyed) of B2B SaaS metrics across early stage companies. Great work by our team at Emergence Capital! See comments for full report, and please let us know how we can make this better in the future!

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SaaS founders: (deferred) revenue booking, are you doing it right? 💵   Clearly accounting principles are not on the top of every founder's priority list.   But if you want insight into MRR/ARR/gross margin/CLV/CAC and most other key SaaS metrics, you will need to know how prepaid subscriptions translate into actual and deferred revenue.   The relevant accounting principle here is that you should: 𝗥𝗲𝗰𝗼𝗴𝗻𝗶𝘀𝗲 revenue when it is 𝗲𝗮𝗿𝗻𝗲𝗱. 💡   How does this work in practice?   Let's take an example:   📈 Your SaaS business sells yearly subscriptions.   💰 Payment terms are 100% upfront (let's say EUR 12k).   So for EUR 12k, a client can use your SaaS product for 12 months.   How to account for this revenue?   What you shouldn't do: ❌ Account for EUR 12k in the month the subscription went live and you received your full payment.   What you should do: ✅ Account for EUR 1k in month 1 (EUR 12k divided by 12 months), EUR 1k in month 2, all the way up to reaching cumulative EUR 12k in revenue after 12 months.   Looking at month one: - You have sold a EUR 12k yearly subscription, but - Only recognise EUR 1k of that in revenue in your P&L (profit and loss statement). - The remaining EUR 11k goes into a balance sheet liability called "deferred revenue" (also called "unearned revenue").   So after month one, you will have: ➡️ Revenue: EUR 1k ➡️ Deferred revenue: EUR 11k   After month two, you will get plus EUR 1k in revenue, and minus EUR 1k in deferred revenue. So: ➡️ Revenue: EUR 1k + EUR 1k = EUR 2k ➡️ Deferred revenue: EUR 11k - EUR 1k = EUR 10k   All the way up to the end of month twelve, where your revenue will be EUR 12k, and your deferred revenue went down to zero.   ❌ To what revenue does this NOT apply? Implementation/consultancy fees (assuming they occur within one month) Hardware sales Other one-off revenues   This is also why it's a good idea to split subscription revenues from other sources of revenue in your P&L (such as services, hardware, etc.).   If you are interested in a more in-depth review, I highly recommend the article on this topic by Ben Murray (also called the SaaS CFO). I'll add the link in the comments below (and consider following him, he offers a lot of high quality content and templates).   Accounting for deferred revenue is step one in your journey to getting a proper SaaS P&L.   Even if you don't have this implemented in your actual book keeping (or balance sheets scare you 👻), I recommend tracking at least your subscription revenue in the "correct" way somewhere in your internal management reporting/KPI sheet/or such.   Because, even if you might not care much for it: your (potential) investors (as well as exit candidates) will.   #startups #saas #recurringrevenue #venturecapital #fundraising #vc #founders #accounting #finance

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Employee Productivity is up, but what’s happening with Headcount Efficiency?!👇 ICONIQ Growth's latest report reveals a notable trend in the SaaS space: While employee productivity - reflected in the ARR per FTE benchmarks - has surged in recent years, headcount efficiency has actually declined. As you can see in the chart below, OpEx per FTE rose over the same period. What do you think is the reason for this? Temporary blip due to market conditions that growing AI adoption will eventually correct? Or will companies always find ways to absorb productivity gains, preventing significant profit boosts? #saas #startup #tech #kpi #benchmarks

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A VC reiterated to me today that these are the three things they look for in early stage: People (what qualifies your team) 🧠 Product (what are you doing that's different) 🏆 Market (is it big enough for a VC to get a potential 100x return at Seed) 📈 This might seem obvious, but the only way to be in with a chance of being one of those 100x returns is to dream REALLY big and truly believe that what you're doing has the potential to become the next major player in your industry. I really do think that what we're doing in the wellbeing space has this kind of potential. But self-doubt also creeps in which is natural and part of the process. When those doubts come, here are three things I do to keep me focused on the 100x dream: I speak to people who are good at taking and balancing risk I take myself back to my original "why" and remember why I am doing this I remind myself that building something great takes time What do you do when self-doubt creeps in? #startups #founders __ PS this is a GREAT book for knowing the secrets of raising from VCs

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Our Micro SaaS portfolio company just hit ARR / FTE productivity rivaling $50M SaaS firms. Here are 4 lessons we learned along the way: Focus on operating leverage, not just revenue growth. EBITDA/FTE is an excellent scoreboard. Lean teams move faster and punch harder. Return on effort matters more than chasing scale or deal size. Where have you most recently created operating leverage in your business? #ARR #MicroSaaS #BusinessEfficiency

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💸 7 Revenue opportunities outside management fees for SPV Leads 💰 “Should I charge management fees on my SPVs?” - every syndicate lead. Sydecar recently posted an blog titled "What You Need to Know about Management Fees and SPV Profitability". The piece highlights both the Pros & Cons of management fees & further explains mgmt fees in the wider fee structure. Many syndicate leads choose to forego management fees due to investor pushback, relying instead on carried interest... which can lead to financial uncertainty. Below are 7 ways Syndicate leads can generate income outside of management fees. 1) Newsletter → Operating a newsletter with a large audience to attract advertisers & generate ad revenue. I started this 10 months ago via Last Money In Media and have seen other syndicate leads start newsletters, some with ambition to monetize via sponsors. 2) Membership Programs → After 6 months of building our newsletter, we launched Deal Sheet, a paid product & innovative way to curate top syndicate deals and reduce carry for active investors/LPs. 3) Consulting Fees → Offering advisory services for a fee. Many syndicate leads do this that have various expertise helpful to startups. This is not something I’ve really personally done, but tons of people and some syndicate leads do this. 4) Early Exits → Gaining interim income from early-stage company exits. This is mostly out of your hands as an investor but there may be quick exits that can provide liquidity ahead of the 7-10 year horizon. A good example here would be SPV opportunities into growth/Pre-IPO stage companies that are clearly closer to a liquidity event. 5) Secondary Investments → Selling stakes in companies that have increased in value, before a liquidity event. Example = we sold about 40% of an SPV into one company we invested in that provided a nice opportunity to return ~3x to LPs and still keep 60% of the capital invested in the deal. This is a good example where you can return a profit to investors before an exit. 6) Non-Venture Investments → Earnings from public stocks, cryptocurrencies, and cash flowing real estate or small businesses. I know lots of syndicate leads are likely active in public markets. While I have a lot of exposure, I’m not active in personally picking stocks as I work w/an investment advisor. I just like and have way more interest/fun in the private markets. I’m personally interested in exploring more cash flowing investment opportunities that distribute dividends. 7) Part-Time Roles or Other Ventures → Many syndicate leads take on additional, part-time roles to supplement income. Some even pivot to working full-time for a VC fund for the guaranteed salary. When I started the syndicate I was working at a startup I joined as the 1st employee. After we exited, I did the syndicate FT for a year. After that year, I consulted with a startup for about 10 months. After that, I spent 1.5 years at Hampton, all while actively running the syndicate. 

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Fractional CFOs often ask me about the Five Figure Flow OS Toolkit. Here's the blueprint to get you there: Book a Discovery Call: Use Calendly to schedule. Conduct the call via Google Meet. Record notes with Fireflies or another note-taking tool. Identify the Main Business Problem: Key focus areas: profitability, cost reduction, cashflow management, pricing optimization. Run the Goals to Actions Map: Identify client goals and create an actionable plan. Tools: FathomHQ (or similar), Google Sheets/Excel for visualization. ROI Calculation: Quantify cost vs. value for the client. Use an ROI formula to present clear benefits. Create a Dashboard Presentation: Highlight current vs. desired state. Present the strategic action plan using Google Slides or PowerPoint. Price and Package the Offer: Offer three-tiered pricing plans (timeline: 3, 6, 12 months). Support options: weekly, monthly, quarterly with unlimited communication. Reports and calls: weekly, monthly, quarterly. Book a Second Call to Present the Offer: Present the offer and terms of service via Google Meet. Record meeting notes and set service terms. Prepare an Engagement Letter: Include clear service parameters and terms to avoid scope creep. Formalize the agreement with the client. Initiate the Onboarding Process: Ensure smooth onboarding to set the tone for ongoing collaboration. Start implementing the strategy toward achieving the client’s goals. This toolkit is designed to streamline your consulting process and maximize client satisfaction. If you want to achieve steady 5-figure MRR, click on the "Visit My Website" link.

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