Startup Finance & Accounting 101: A crash course for founders :: with Veronica Sagastume

In this episode of Ventures, my guest Veronica Sagastume (https://www.linkedin.com/in/veronicalsagastume/) and I talk about all-things startup finance and accounting. From the perspective of what founders need to know, this episode ended up being a crash course in the various high-level aspects of bookkeeping, accounting, controller work, fractional CFO work, tax prep, legal considerations, and finance operating suggestions. Veronica’s firm (https://www.fortifiedaccounting.com/) works with funded, early stage startups and she makes a compelling pitch for why you should seriously consider hiring a firm rather than individuals in the early stages of your funded business.

Visit https://satchel.works/@wclittle/ventures-episode-81 for detailed notes and links to resources (videos, articles, etc…) mentioned. 

You can watch this episode via video here.   

2:47 - Veronica introduction and background, story, and what she does now.

5:46 - What’s the “Finance 101” for startups and when should founders hire help?

11:48 - Last ~5min of conversation is worth re-listening to, but - first question - what is GAAP accounting? https://www.investopedia.com/terms/g/gaap.asp 

13:45 - Will Xero or Quickbooks online help entrepreneurs with the basics of GAAP accounting?

16:14 - Suggested order of hires – Veronica suggests hiring a firm and growing into them.

19:14 - Analogy of someone doing a large remodel or construction project.

20:09 - Traction and having the cash is key so you can hire a proper finance and accounting firm. 

22:38 - Lessons after 15+ years in the startup space. If you can hire a firm, do it.

23:12 - Importance of having a regular monthly meeting to go over your books. Quick lesson on the P&L (income statement), balance sheet, and statement of cash flows. 

28:00 - Amazing to have a group that can get you finished books quickly after the beginning of the month. 

31:50 - Coming back to the overall framework: bookkeeping, controller, accounting, “CFO stuff” - does Veronica’s firm do all this? Even tax prep?  

33:52 - The role of controller. What does it look like working with Veronica’s firm from the role of the controller.

37:14 - Prepping a company for an exit strategy / data room

41:37 - Data rooms

42:40 - How Veronica’s firm builds data rooms from scratch as they go.

43:20 - How should founders think about finance best practices to be properly compliant.

46:50 - “CFO stuff”

53:03 - Tax prep strategies // what should founders be looking for to ensure their firm is doing the right things?

44:33 - Early November tax strategy meeting / how to work with the tax prep folks?

59:00 - What are the types of things that Veronica will bring in the expert accounting / legal folks?

1:00:41 - Stock options vs. RSUs?  https://smartasset.com/investing/stock-options-vs-rsu

1:01:37 - Where can people find Veronica’s firm online? https://www.fortifiedaccounting.com/ 

1:03:28 - Smart use of Loom videos (https://www.loom.com/). 

1:04:50 - About Will (https://linkedin.com/in/wclittle) and Prota Ventures (https://www.protaventures.com). Special focus on idea to pre-seed.

1:09:00 - When is the right time to talk to Fortified Accounting?