Addressing startup questions
Updated: Sep 19, 2020
Glad to be featured in a post by Jessica Li, an investor with Soma Capital.
Answering your biggest startup COO and CFO questions with Benjamin Friedman, founder of Build Scale Grow
What is the biggest financial operating challenge facing startups? How does this evolve over time?
The willingness to invest the right accounting system and to install financial controls. Often founders, especially in their first startup, loathe any costs and hesitate to have a process for fear of creating obstacles. Investing in accounting and finance does two things. One, you have the best information to make decisions. Two, when it comes time to fundraise, the process is smoother since you have the information needed for review and diligence and investors are less concerned a part of the company could go off the rails.
What advice would you give young founders?
There are a ton of resources around building a company and countless people will offer you advice despite how well they know your situation and needs. I advise founders to spend time early defining your own vision and values and formalize them. For someone eager to change the word, introspection may seem counter-intuitive. We have to recognize that everything, both our success and our failures, will be grounded in your vision and values. When we later experience the distress of dilemmas or we have the eustress of external success, we could get incredibly distracted, and need to revisit our purpose and what makes life meaningful to succeed.
The other piece to accept early is that starting a company can be brutal. Recognize the fear, depression, and discomfort that can/will come from starting a company and seek help early and often. Many founders feel compelled to appear perfect. That superficial presentation hides our needs and leads to intractable, tough problems. Being “successful” is worthless if you’re miserable or unhealthy. One solution is to build two networks — one for unconditional support (the same love you should offer yourself) and the other to challenge you to learn from your mistakes through radical candor designed to make you better. Both networks are critical.