This Week in Startups How to simplify diligence & avoid fraud | Finance Basics with Kruze Consulting’s Scott Orn | E1321
Nov 8, 2021
Scott Orn, COO of Kruze Consulting, shares invaluable insights on financial diligence for startups. He discusses the importance of solid financial management to avoid pitfalls during fundraising. The conversation highlights the transformative impact of the pandemic on compliance responsibilities, emphasizing the risks of fraud. Orn also delves into critical metrics like Lifetime Value and Customer Acquisition Cost, stressing transparency and accurate reporting. Additionally, he addresses ethical issues surrounding self-dealing and the need for strong oversight in handling company finances.
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Essential Business Aspects
- Founders must understand HR, accounting, and legal aspects of their business.
- Get these right from the start to avoid future issues.
Diligence and Fraud
- Frequent fundraising leads to increased due diligence.
- Mistakes in financials can range from simple errors to outright fraud.
Diligence vs. Speed
- VCs sometimes face pressure to close deals quickly, limiting diligence time.
- This can increase the risk of overlooking issues like fraud or incompetence.