Mark Brenner: Building The Roadmap for Startup Success
As we reflect on a truly inspiring and exciting DCSW 2020, we connected with CEO and Co-founder of WEST Technology, a subsidiary of Wiss & Company, LLP, one of our title sponsors this year. Mark introduced us to the Wiss Early Stage investment readiness platform, provided some advice for early stage companies looking to attract investors and develop a strong financial platform, and much more.
Tell us about your business and what makes your business unique.
Mark: Wiss Early Stage, powered by WEST Technology, is a unique combination of proprietary technology along with a financially disciplined approach that raises the probability of investment and exits for entrepreneurs. We refer to our offering as an investment readiness platform.
The Wiss Early Stage investment readiness platform and process includes milestone setting, budgeting, monthly accounting meetings, board and team reporting modules, cash runway calculators, and custom financial charts. We’ve also built out an “alerts system” The system to identify opportunities, track business goals, and catch tax and compliance issues. We’ve integrated technology and services to reduce work on entrepreneurs while helping them stay disciplined.
After working with many companies, there is a clear pattern that the best outcomes are achieved by those entrepreneurs with the most discipline and focus.
Wiss Early Stage is a cost effective and nimble solution for start-ups, and with the expanded services of Wiss, we have the capacity to provide all of the needs of a company as it matures to hundreds of millions in revenue.
What are some things that early stage companies can do to attract investors and develop a strong financial acumen?
Mark: We built the Wiss Early Stage business model on what we call the “5 Proofs”, a data-backed formula for securing funding and differentiating from the many other early-stage leadership teams.
Since institutional investors are seeing thousands of companies a month, it is critical to stand out from the crowd. Some of the specific things an entrepreneur can do to become a top 5% financial operator among your peers are: Determination and tracking of key milestones, establishing product-market fit, articulating a clear, scalable business model and demonstrating financial clarity, transparency and discipline.
Get good accounting help. Numbers equal trust so investors must have confidence in your numbers. There is a difference between bookkeeping and accounting. Companies using technology only or non-accounting bookkeeping solutions typically need to be redone as you advance as a company and need to file tax returns. The accounting function is better outsourced allowing the entrepreneur to focus on building value and product-market fit.
Create and manage against a budget. Even if it is early and needs to be adjusted, building the discipline in your organization does create better results and engenders confidence with investors.
Report on a regular cadence to investors and be transparent. We typically recommend a monthly one page report in the same format at the same time every month. This process also forces critical thinking of what is most important. Share bad news and what you have learned with investors. They know everything is not going to be rosy. They want folks that can recognize quickly when certain strategies need to be changed. They want entrepreneurs that can learn and adapt.
Have someone watching tax and compliance issues. Investors lose confidence when items like sales tax or proper filings are missed. This is too much for the entrepreneur to keep track of. So get help!
How have you seen COVID-19 affecting investor decisions, and how has Wiss worked to support entrepreneurs during this time?
Mark: Yes, we’ve seen things move faster and slower. What I mean by that is companies that are experiencing an expansion of business are moving through the investment diligence process quickly. These may be companies that facilitate remote working or are perhaps eCommerce based. Sophisticated investors understand that the best returns often follow a down year and will move quickly to get behind fast growing companies. Now if your business has been adversely effected by COVID. If perhaps your business model is reliant on physical spaces and human interactions, then you need to more closely manage cash flow right now. I’d suggest you set up non-sales type meetings with investors to ascertain time horizons and remain top-of-mind. Unfortunately you’ll need to remain more patient during this time of uncertainty.
How did you handle adversity and doubt when building your business?
Mark: Early stage companies have a high degree of uncertainty. If you are doing something new, it is often not possible to know if you are making correct decisions in advance. Some of your strategies and tactics are not going to work and there are bound to be setbacks that are out of your control. A few ways to deal with adversity.
First and foremost, an entrepreneur must have a rock solid conviction about their business idea and purpose. At a deep level they know their underlying premise is true. As some of the adversity inevitably hits, the conviction will bolster you and in turn the company thru the uncertainties.
Entrepreneurs need to lose the perfectionist mindset and manage their own and other’s expectations. A very small number of companies nail product-market fit with their customers out of the gate. There is experimentation and failure required to achieve the right balance of product messaging and customer action.
The answers are not in your head. You can reduce risk by talking to customers and talking to investors and diligently understanding their needs. This intense level of listening comes with a testing mentality that enables you to establish clear realistic milestones in the face of adversity.
Finally, open yourself up to help. Most entrepreneurs start businesses despite their network often calling them crazy. They are pioneers. It should not be a surprise that the person who goes out into the wilderness and does everything on their own does not have a well developed capacity for seeking help. It is critical to have a diverse mix of experienced folks by your side. Typically the highs are not that high and the lows are not that low when you have a more balanced perspective.
We are so excited to have had Wiss as a title sponsor of DCSW 2020! Why is it important for you to support DC entrepreneurs?
Mark: Absolutely. We are excited about the DC market and frankly feel it has been underserved by comparison to NY, Silicon Valley or Boston. There are talented technology entrepreneurs in the area and it has a huge customer base. We like the fact that these companies are near their customers. We also have some great partners invested in the DC ecosystem like NEXT, Insperity, and Technology Rivers who we enjoy joining forces with. Ultimately our mission is to support as many entrepreneurs as possible to ensure they get a meaningful Return On Sacrifice and DC is a market of great vitality.
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Thank you to Mark and the rest of the Wiss team for your partnership this year at DCSW 2020! We had an incredibly successful week and could not have pulled it off without you.
If you are interested learning more about Wiss, you can contact them via their website here: https://wiss.com/contact/