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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.

You can watch this episode below or listen on Apple Podcasts, Spotify, Google Podcasts, or wherever you get your podcasts (search for “Ventures”).


1:52 - General tee-up for the conversation and why why understanding startup finance matters

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

5:46 - Finance operations in a rapidly growing new business are often overlooked (or not buttoned up as much as they should be). 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?

14:20 - Example of purchasing a piece of equipment that is $25k.

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, better to hire someone to run it all for you, if you can afford it.

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. Also, thoughts about financial modeling.// See also https://www.startuprocket.com/articles/startup-financial-modeling-part-1-what-is-a-financial-model 

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 - Will Veronica’s firm also run and manage payroll? (Also, thoughts about prepping a company for an exit strategy / data room)

41:37 - More about 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 (financial controls).

46:50 - Talking more about the accounting and “CFO stuff” // What is the approach that Veronica’s firm uses when working with clients?

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?

57:50 - Highly recommended to have this meeting before Thanksgiving.

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/ // Book a discovery call on Monday afternoons. https://www.linkedin.com/in/veronicalsagastume/ 

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.

1:06:50 - Prota’s purpose and the various ways to holistically invest in founders.

1:08:50 - Best social network to use to contact Veronica → https://www.linkedin.com/in/veronicalsagastume/

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

1:11:13 - Last tip: find a good banker, insurance person, finance firm, and lawyer.