What data should a company report to its investors?
According to Mehmet Atici, VCs prefer companies that emphasize funnel and usage metrics to highlight growth; solely focusing on Profit and Loss (P&L) and Annual Recovering Revenue (ARR) reports aren't sufficient.
Businesses should also convert customer feedback into measurable and actionable numbers for upsell and/or acquisition. Topline focus alone isn't enough. "Sales and wider team incentivization systems become quite core to your targets depending on the stage," Mehmet Atici explained. "Metrics such as customer and revenue churn, net revenue retention, customer acquisition cost, customer lifetime value, and burn multiples are also among standard insights into the company's growth health."
Voria Fattahi of Sprints adds that businesses should expect to provide a succinct written summary of financial and operating performance for a particular month (or period). Plus, a detailed set of numbers and KPIs covering a longer-term trend.
When talking with companies, they often focus on what happened last week, last month, or last quarter, but they should not lose sight of their longer-term perspective. Here businesses can demonstrate how they assessed the impact of business decisions they took last year or even several years ago.
How can a spend management company like Payhawk help businesses seeking VC investment stand out?
There is a lot of competition for funding, especially in these uncertain times. So, what's the best way to demonstrate that you can control your company's cash flow and business health? Add an expense management solution like Payhawk to your arsenal.
According to Arsham Memarzadeh of Lightspeed Venture Partners, a spend management solution like ours can help businesses with both spend visibility and control, which are critical to achieving sustainable unit economics. In addition to automating many tedious tasks involved with expense management, card reconciliation, and ERP data entry, it also reduces the need for bloated finance departments and saves hours and even days of productive time.
When asked the same question, Dobromir Ivanov at BESCO shared that Payhawk not only helps businesses to optimize costs but also demonstrates their attention to detail. Working with us helps businesses show their investors that they know how healthy their cash flow is in real-time and can respond with agility when necessary. In turn, this spend visibility focus clearly signals that the business will be careful with investors' money.
Final takeaways: spend automation and visibility
All the experts who took part agreed that automation is crucial for success in modern scaleups. At Payhawk, our solution allows businesses to automate manual, time-consuming processes to improve efficiency and increase spend visibility throughout the company (beyond the finance team). This information lets decision-makers make informed choices about future budgets and take quick actions when necessary.
Book a demo to learn how your business could control spending, save time, and get accurate visibility to support decision-making.