After spending over a decade in investment banking, I came to the realization that small businesses were struggling to raise capital, especially when they were approaching sophisticated investors for the very first time. There are many investment banks that make introductions to investors, but very few companies take the time to help entrepreneurs perfect their business plan, investor presentations and most importantly, their 3-5 year financial forecasts. I launched my own consulting firm to help small businesses raise capital, primarily in the $3-10 million Series A equity financing space, where I felt companies needed the most help.
While consulting businesses on capital raising, I discovered an even bigger problem – accounting services being offered to small businesses are completely inadequate in terms of preparing companies for financing. Most businesses have a bookkeeper and an accountant who shows up once a year to do their tax filing, but the company is not getting any advice with respect to putting together proper financial statements for an investor, cash flow planning, pivoting their business strategy, or expanding. Most of these services are only available to large companies that can afford a full-time CFO costing north of $200K per year.
As a result, we started to hire accountants and we started to offer fractional CFO and operational accounting services at an affordable rate to small businesses to level the playing field against large business that have full-time CFOs.
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