Michael Budde

https://lnkd.in/e-Cc-PhA Just wrapped up a case study highlighting some successful value creation work for a vertical software company. After a funding event, it can be tough for management teams to align on which initiatives to tackle first. Here are a few tips from my experience: 📈 Prioritize Compounding Benefits Start with initiatives that enable or build capabilities. These early projects are not the most glamorous. The long term value is the momentum they create and tone they set. They pave the way for bigger wins down the line. 🚧 Address Bottlenecks We identified and fixed a major technical bottleneck in the sales funnel. This gave us an immediate boost to revenue and win rates. The less obvious win was a finding that our marketing efforts were more effective than we thought. Many opportunities fitting the ideal customer profiles were getting stuck at the bottleneck! ✴ Find the Triple Word Score Initiatives Focus on initiatives that add value across multiple valuation categories like revenue, margins, and multiple expansion. My favorites are those that improve operating leverage and scalable unit economics. Operating leverage improves as each dollar of increased revenue earns a little more Operating Margin (EBITDA) over time. In the case study, I renegotiated two of the largest variable cost supplier contracts, leading to immediate improvements in unit contribution margins and setting the stage for increasing margins as revenue grew. This is a valuable function of a durable business model. Most teams agree on what needs to be done, but not always on the order. Choose initiatives that start building a solid foundation for future investments or the Quick Wins with high impact. A few good articles that touch on the technical concepts.. Healthtech: Show Your Magic | Andreessen Horowitz  https://lnkd.in/eGkDnkiG The Gross Margin Problem - Bottom Up by David Sacks https://lnkd.in/e9J2Eqaa

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Q3 is out and Q4 is in!  This is a great read about Base10's strategic switch showcasing how Carta is simplifying fund administration for emerging managers, which is especially important now rolling into the year-end busy season. 

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Great Article https://lnkd.in/gkSbT4Th Value Creation is Key: Validated value creation plans, combined with a meticulous and programmatic delivery approach, helps address the pressing concerns of cash-hungry LPs by demonstrating a commitment to generating cash returns and meeting current LP demands, while strengthening trust between GPs and LPs. Key Points - Net IRR was once the gold standard for measuring PE success. - LPs say DPI (Distributed to paid-in Capital) is now paramount - Distributed to paid-in capital, is the ratio of cash generated to what’s invested. - GPs are generating cash however they can. - Exits are likely to hit a five-year low this year and the average hold  time for a portfolio company has grown to almost six years (Preqin) - PE distributions at major firms have plummeted 49 percent over the last two years. - Private equity firms are motivated to distribute cash to enable LPs to commit to future funds. - GPs are responding to the demand with alternatives to exits: continuation funds, NAV loans,  subscription lines, cutting management fees.

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Series A or B wondering when to bring in a VP of Finance or CFO? It’s a crucial decision that can shape the future of your company. At this stage, financial leadership is not just about managing numbers but also scaling processes, securing funding, and driving strategic growth. My colleague Paul breaks down key signs that it’s time to hire and indicators for choosing between VP of Finance and a CFO #FinanceLeadership #CFO #StartupGrowth #SeriesA #SeriesB #NextGenLeadership

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If you enjoyed our first blog on the metrics that matter for Verticalized SaaS then don't miss on the Part II of the series where my colleagues Devraj Hom Roy and Matt Schaar discuss the strategic and operational choices to improve these operational indicators. https://lnkd.in/g5QkCrcH

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Interesting data and good work from Carta in their inaugural VC fund performance report analyzing benchmarks for more than 1800 funds across six recent vintages - https://lnkd.in/e5R_dhXp Take a look at the pace of investments. As expected, capital deployment has slowed since the 2020 peak, with 2022 funds only using 43% of their capital after 24 months, down from 60% in 2020. This trend seems broadly consistent across private company and fund investing, with GPs and their LPs being more cautious and selective with capital allocation. Raising capital is tough today. Full stop. It's easy to focus on that, but I'd encourage us all to instead consider and focus on what is less talked about - that this cautious approach has created a large amount of available capital aka "dry powder," dedicated and ready to support special founders. The best founders are aware of private market dynamics, which impact the time needed to raise rounds and the milestones they must hit to successfully do that, but their primary focus is always the mission and the customers they serve. They are committed to building products to solve their customers' problems regardless of what us investors think. Building generational companies is never easy, but many have been and will continue to be built in tough markets. I try to take a similar approach in supporting founders. That doesn't mean ignoring market conditions, which can greatly impact my investment decisions and outcomes, but like focused founders, I know it makes more sense to dedicate my limited daily energy to what I can control. That means finding and supporting founders who are transforming or creating markets and doing everything I can to help them win, no matter what the market is doing. I hope to collaborate with many doing the same. Have a great week and see you out there! Note: These thoughts and opinions are solely mine and and mine alone. They do not reflect and are not associated with any company I am part of.

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The new quarterly review is live! Each quarter, I dive into the latest trends and shifts in the venture capital market, covering both the broader macro perspective and the unique insights we’re seeing at Florida Funders. Check out my latest article to stay informed on what’s shaping the VC landscape and how we're navigating it at FF. Always eager to hear your thoughts – let’s keep the conversation going! #VentureCapital #FloridaFunders #MarketInsights

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Frustrated with data quality issues? An MDM tool could be the missing link in your data strategy.    Holland Mountain's ATLAS MDM automates data mapping across multiple sources, ensuring your data warehouse receives high-quality, consolidated data. With ATLAS MDM, firms can: 🔷 Connect to any source systems, leveraging our 40+ pre-built connectors 🔷 Handle large data volumes through automated mastering  🔷 Keep data accurate and consistent with robust data validation rules 🔷 Integrate with any data warehouse infrastructure, including Snowflake and Azure 🔷 Empower end-users to take control of their own data and data flows    Discover what Holland Mountain's ATLAS MDM can do for you. 👉 https://lnkd.in/e3_ge-gu Holland Mountain | PE Stack by Holland Mountain #privateequity #privatemarkets

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In April, OpenAI Controller Sowmya Ranganathan walked me through how her accounting team leverages ChatGPT to revolutionize the close process. I instantly knew we needed to share her story with the broader finance community. Accuracy and process are core to accounting workflow, so it can be intimidating to stray from traditional approaches. In our webinar last week, Sowmya walked through some brilliant demos, illuminating how you can automate repetitive and time-consuming tasks with ease. I’d *highly* recommend watching a replay of our webinar if you weren’t able to join live – it’s linked in the comments. We’ve also distilled her advice into a how-to guide: https://lnkd.in/gbheYKf2 Here are some of the pro tips she shared: ⚫ Seek out ways to automate. When you’re repeating a task that takes more than a few minutes in Excel - or something you hate about the close process, rewire your brain to find a way to automate it. Those minutes quickly add up to streamline your day-to-day workflow. This works with the close process, but also many other projects in finance and beyond. ⚫ Be curious about code. While she’s not a trained programmer, Sowmya uses ChatGPT to create Python scripts to build pivot tables and parse through massive CSVs. Her team can categorize a full month of OpenAI’s Azure usage data 👀 in 10 seconds 👀, whereas before they’d have to manually process the data every few days to avoid hitting Excel’s row limits. ⚫ Train ChatGPT on your company’s specific guidelines. After Sowmya ran a prompt to recognize revenue from a transaction file, she asked ChatGPT to cross-check it against their audit firm’s ASC 606 guidelines, which she uploaded as a PDF. The result was nearly the same, but it added an extra step to protect against hallucinations. And, she always triple-checks the results. ⚫ Don’t fear the error message. Pre-ChatGPT, if she was working on an automation project and received a technical error message, she might have given up. Today, Sowmya dumps the message back into ChatGPT, where it can diagnose and resolve any issues. You can see this problem-solving in action during her demo! A big thank you to Sowmya for sharing this hands-on demo and giving finance leaders the confidence to test it out themselves. Now that you have inspiration, how will you use ChatGPT and AI to revolutionize operations at your company?

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The world has never been more complex and dynamic. The cost of capital has increased, AI is in its infancy, data is abundant yet hard to navigate, and the world is still adjusting in a post-COVID era. With that, the role of the CFO has changed forever. CFOs must be more strategic, more disciplined and more forward-thinking. They must manage delicate relationships with the CEO, their teams and their board. At BCV, we’ve had a front row seat investing in the technology adopted by CFOs over the last 20 years. Now is the perfect time to create a CFO community where top-tier finance leaders can navigate these changes with their peers in a high-trust environment. We’ll use our depth of investing at BCV in the office of the CFO and financial technology plus the power of the broader Bain Capital network to keep advisory board members up to date on bleeding edge innovation to help them make informed decisions. We’ll look to advisory board members to help us understand their most pressing problems, as well as technology’s potential to solve them–including technology from our portfolio of companies. The CFO Advisory Board includes financial leaders from a variety of industries and geographies, representing late-stage growth companies to scaled public and private companies. I'm pleased to introduce the BCV CFO Advisory Board with Matt Harris, Noah Breslow, Alysaa Co, Nicole LoRusso, Joe DiMento, Sarah Hinkfuss, and Tina Dimitrova.

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The Information broke news that Insight Partners has just secured $10B in funding for their latest flagship fund. This is perfectly timed given their multiple $1B+ companies sold over the past week. This is a clear sight that #limitedpartners still have in their #privateallocations even during the current slow markets for #IPOs and #M&A. This would also appear to be good news for #AIfinancing and #SaaSFinancing. What do you think? #Management #VentureCapital #PrivateEquity #CapitalMarkets https://lnkd.in/gXu_s8Qj

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Busy three days filled with meetings with CFOs, COOs, fund managers and tech solutions. Discussing how to run funds more efficiently, if and how AI tools can improve our work and what does the future hold for tech infrastructure (hello Carta) that will connect a fragmented back office and middle office experience. Thanks to Peter Roos for being a great panel partner and to Eva Hubsman and Tom Miller for pulling me into their conversation on stage. #fund_management #technology #AI

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An interim CFO can be a game-changer for companies traversing rapid changes or seeking strategic growth avenues. In this article, I share a detailed case study where one of BluWave, LP’s pre-vetted, PE-grade, interim CFOs stepped in to help a PE-backed cybersecurity SaaS portfolio company with continuity and expansion during a transitional period. This interim CFO’s profile highlights include: ✅ Transformational leadership ✅ Process optimization ✅ Strategic partnership ✅ Financial acumen ✅ Global expertise Dive into the insights shared in my latest article to learn more about this interim executive and how they helped drive growth in this private equity portco. https://lnkd.in/eZSfzUuA

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Executive Edge | Issue Two: Suite Success. Should a case study approach be used to successfully hire C-level talent? ------- If you're a #cfo currently working in private equity, venture capital (or other investor types), or, you're a business seeking to hire transformational finance talent Camino Search specialises in head-hunting & consulting for investor-backed tech businesses. Globally. #fd #saas #pe #privateequity

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Sharing some practical advice based on how we run the finance team at Rippling. Includes the frameworks we use to help balance growth vs. profitability appropriately, as well as some advice based on lessons I have learned over the past 5 years in my finance roles across 2 unicorn startups.

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Great time on the Embracing Erosion podcast w/Devon O'Rourke! We talked about: 🚀 How to scale a company from concept to 9-figure exit 🔄 How to break away from the traditional consulting model and apply product approaches ⏩ Why it’s important to iterate quickly and often with messaging 💸📈What signals are important to pay attention to when investing in startups and much more!

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Regulatory hurdles can make or break early-stage startups, but navigating them can also unlock huge opportunities. I recently sat down with Bradley Tusk, Co-Founder and Managing Partner at Tusk Venture Partners, to discuss how he and his team help companies overcome complex regulatory challenges. From backing startups like FanDuel, Lemonade, and Coinbase, to his experience as a political strategist and campaign manager, Bradley brings a unique perspective to the venture world. We explore how regulatory environments impact sectors like crypto, AI, and the gig economy—and what it takes to succeed. Catch Episode 455 of The Full Ratchet for this insightful conversation! Link to the full episode is in the comment section below.

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- With distributions harder to come by this year, more firms have been thinking about GP-led secondaries processes as an alternative path to exit. -Far from being a short-term fix, however, some believe these transactions could be seen as a “new normal” for exiting private equity assets. - A number of LPs are assuming that there will be little to no IPOs - Today you have more deals being done on the GP-led side than on the IPO side. - There could be €50 billion to €60 billion worth of GP-led transactions executed this year. - Supply is coming from GPs looking for alternative exit routes, demand is also coming from new LPs entering the sector.

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