What if poor financial management was the biggest risk to your SaaS business—not your competitors or even AI? In this episode of SaaS Fuel, host Jeff Mains sits down with Dan DeGolier, founder of Ascent CFO Solutions, to dive deep into the financial strategies that separate thriving SaaS companies from those constantly struggling with cash flow, compliance, and scalability.
If you’re a SaaS founder, CFO, or executive looking to improve financial efficiency, cash flow visibility, and revenue recognition, this episode is packed with actionable insights you don’t want to miss!
Key Takeaways
00:00 – Introduction: The biggest financial risks SaaS founders face
02:45 – Why cash flow management can make or break your business
06:20 – Revenue recognition: What SaaS founders need to know
10:30 – When to hire a fractional CFO vs. a full-time CFO
15:00 – Building financial systems right the first time
20:20 – The biggest financial mistakes SaaS companies make
25:40 – Metrics that matter: MRR, ARR, CAC, and more
30:15 – Capital-efficient growth: Why it’s replacing “growth at all costs”
35:50 – Preparing for fundraising, M&A, or an exit
40:00 – Financial forecasting & risk management
45:20 – Next steps: How to optimize your SaaS financial strategy today
Tweetable Quotes
💡 “Poor financial management—not competition—is the biggest threat to your SaaS startup.” – Jeff Mains
💰 “Cash flow mismanagement is the silent killer of SaaS companies. Ignore it at your own risk.” – Dan DeGolier
📊 “Growth at all costs is dead. Capital-efficient growth is the future of SaaS.” – Jeff Mains
🚀 “A fractional CFO can save your SaaS business more than they cost—if you bring them in at the right time.” – Dan DeGolier
SaaS Leadership Lessons
- Cash flow is king – Mismanagement is the fastest way to kill a promising SaaS startup.
- Revenue recognition matters – Doing it wrong can lead to compliance issues and financial disaster.
- Fractional CFOs can be a game-changer – Get high-level financial expertise without the full-time cost.
- Growth at all costs is dead – Smart SaaS founders focus on capital-efficient growth instead.
- rack the right metrics – If you’re not monitoring MRR, CAC, NRR, and burn rate, you’re flying blind.
Transcript
Jeff Mains (00:00)
Are you a scaling SaaS founder? Ready to make the leap from leading a team to leading an organization? Join us each week as we refill your think tank with actionable tips and strategies from great business minds you know and those who don’t know yet. This is SaaS Fuel with your host, five-time entrepreneur, SaaS founder, and globetrotting adventurer, Jeff Mains.
Welcome back to the SASCIO Podcast where book recommendations are less about what you should read and more about what you’ll actually finish before getting distracted by, you know, snacks and social media. I’m your host, Jeff Maines. How B2B SAS founders like you grow from traction to scale. Here, growth is more than just numbers. It’s about crafting a future proof company, premium valuation, and leaders who build a business of significance while living epic adventurous lives.
So what if the biggest risk to your company’s future wasn’t your competitors, your product, AI, or even your sales force, but the numbers hiding in plain sight in your financials? For SaaS founders, financial management isn’t just about keeping the lights on, although it is that in some cases too. It’s also about ensuring the entire machine runs smoothly, scales efficiently, and doesn’t implode when market conditions shift. We’ve seen a lot of that over the past few years.
Cash flow mismanagement, that is the silent killer of promising startups. Poor revenue recognition, man, say hello to compliance headaches. And let’s not even start on the chaos that comes from a messy chart of accounts. Well, today we are cracking open the financial playbook that separates thriving SaaS companies from those that constantly scramble just to stay afloat. We’re talking about the strategies that ensure you always have cash when you need it.
the systems that prevent expensive mistakes, and why a fractional CFO might just be the secret weapon your business didn’t know it needed. If you’re tired of making financial decisions based on gut feelings and spreadsheets that make your head spin, this episode is exactly what you need. So, hey, let’s break it down. Our founder on Tuesday was Alex Levin, co-founder and CEO of Regal.io, who took us inside the evolving world of AI-driven customer engagement.
He broke down the power of voice AI, the benefits of blending AI with human agents, and how businesses can optimize customer journeys with automation. Really cool stuff. And our expert guest last week was Blair Bryant Nichols, who shared how SaaS founders can use storytelling strategy and authenticity to stand out, build connections, and grow their influence. His expertise is in building strategic speaking platforms. And he offered a fresh perspective.
on how founders can position themselves as thought leaders. Pretty cool, isn’t it? Well, if you missed either of those episodes, go back and give them a listen. Lots of great stuff in there. My guest today is Dan DiGole, a founder of Ascent CFO Solutions. He is a seasoned financial leader dedicated to helping high growth businesses master their finances and cashflow. Kind of important. With experience across multiple industries, including SaaS, e-commerce, and manufacturing,
Dan has built a powerhouse team of fractional CFOs, finance executives, and accounting professionals. Through Ascent CFO Solutions, he helps businesses build it right the first time, ensuring financial stability and long-term success. Welcome Mr. CFO, Dan DeGaliere. Hey, Dan. Welcome to SAS Fuel.
Dan DeGolier (03:38)
Thanks so much for having me, Jeff. I’m excited to be here.
Jeff Mains (03:41)
Excellent. Well, you started Ascent CFO solutions all the way back in 2011. What was the market gap you saw then and how has demand for fractional CFO services evolved over time?
Dan DeGolier (03:54)
Yeah, great. Thanks for the question. ⁓ You know, I sort of came across it, I don’t want to say accidentally necessarily, but ⁓ I came across the need for a fractional CFO when I had taken a role as a full-time CFO for a company that really couldn’t afford a full-time CFO, nor was it really a need for somebody to be in that seat 40 hours a week, you know, ⁓ all week long. So… ⁓
I think at that point in time, I thought it would be pretty interesting to be able to support multiple clients, multiple companies in their growth trajectory and provide some strategic CFO ⁓ type support. ⁓ But then since then, it’s definitely evolved. We’re definitely seeing ⁓ it being adopted by more and more companies, not just tech companies or P2P SaaS companies, but we’re seeing it across all kinds of industries where people realize that they can get a really
qualified person on their team on a part-time basis and something they can afford.
Jeff Mains (04:53)
I think really at every stage we need that financial strategy piece, but it’s one of those things that’s hard to know is when do we need somebody full time and when do we really need somebody fractional? Like you’re saying, you you were in a role and they didn’t need you full time. And I think that’s the case for a lot of companies. Let’s say, you know, maybe three to 30 million. Where is it in there that, or why should they think about full time versus fractional?
Dan DeGolier (05:19)
I think people can get by with a fractional CFO longer than they think they can in a lot of cases. think that there’s, when you reach a certain level of, ⁓ it depends on your transaction volume and your transaction complexity. But you know, we see companies up to 20, 30, $40 million in revenue where if they’ve got a strong accounting team, if they’ve got maybe a full-time controller and a couple other accounting people on the team, maybe even an FP &A specialist, ⁓ a two-day-a-week CFO or
two and a half, three day a week CFO can be a really good option for them. It’s more affordable and they still get somebody who’s really engaged as part of their team. There tends to be an inflection point again, where you’ve got a lot of, if your transactions are very complex and they differ from one another, or if just the transaction volume is high enough that maybe you need better monitoring and better, somebody who can be there 24 seven, if you will.
But yeah, would say definitely companies can get by a lot longer than they probably think they can with having a ⁓ really qualified fractional CFO.
Jeff Mains (06:30)
And for the audience, how do you segment the duties and responsibilities? Something, know, what would be CFO type things versus controller or accounting team? You know, what are the key factors in deciding, you know, I’ve got enough now that I really need somebody in that role.
Dan DeGolier (06:45)
Yeah, CFOs, the way I like to look at it is, as CFOs are looking forward, FP &A, they’re taking the work of the controllers and the accountants of scorekeeping and having an accurate record of what has happened in the past and then taking that, taking a strategic role to have a, you know, forecast your cash flow.
Understand what your fundraising needs might be, whether it’s debt or equity in whatever form it might take. Having a clear strategy around the business, around pricing, around compensation, lots of different things that are strategic in nature is where the CFO plays. ⁓ And again, that usually can only be done if there’s a strong controller in place, a strong accounting team who is making sure you have really accurate historical numbers.
Jeff Mains (07:39)
I like that. Well, one of the things we talked about when we first talked was having financial systems and building them right the first time. I think we probably, anybody that’s built a company multiple times or multiple companies can really relate to that because I’ve done it wrong many times. We’ve not done it. So what do you mean by building financial systems right the first time and what are some of those mistakes?
Dan DeGolier (08:04)
Yeah, I think having a really good and clear chart of accounts so that you’re tracking the right things and the right buckets and you understand you really have clarity on your gross margins and your margins by your product lines. Understanding the categories of your spend are really important. So I think that’s the place to start would be your chart of accounts and making sure that the whole way that things are engineered and designed. And of course, that chart of accounts is in the way those financials are classified.
also should be seamless with how you’re forecasting. As you think about, you you have a lot of discretion when it comes to marketing spend per se, but you don’t necessarily have, ⁓ with your fixed costs, you don’t have a lot of discretion around what you can spend. So by putting it in those buckets, if you will, ⁓ from a historical standpoint and using that, same categorizations for your forecasts are important.
Jeff Mains (08:57)
Yeah. Any other big mistakes that you’ve seen, you know, walking in and you go, my gosh, we got to fix that immediately.
Dan DeGolier (09:04)
sure. You name it. ⁓ That’s a big part of it is how things are classified. I’m going to always harp on cash flow, right? think that a big mistake companies make is like, we’re profitable. Well, based upon your payment terms and how quickly you’re paying your vendors, things like that, you can still run out of cash even as a profitable company. So I think just ⁓ a unwavering focus on cash flows, both not
you know, historical but also forward looking cash flows, I think is one of the things that are most critical. And it’s a mistake that a lot of, especially first time founders, founders might make. ⁓ know, kind of touching on a question you alluded to earlier, I find that ⁓ people who tend to hire us ⁓ earlier, our founders are not first time founders, they’re second and third time founders where they realize that, you know, that their first time around, they decided to
you know, not focus on getting the books right and having accurate financial statements necessarily. it’s that second and third time founder realized, yeah, let’s just do this right to begin with. We don’t want to have to pay to them fix it later if we just go along with an approach that’s sort of haphazard and sloppy.
Jeff Mains (10:22)
Yeah, yeah, fixing it is painful and time consuming for sure.
Dan DeGolier (10:26)
Right, right, right.
Jeff Mains (10:28)
So I love that building it right the first time. mean, that’s something that somebody could take away from this episode. That’s it. Is get it right the first time. Don’t put it off. Don’t think that it’s not going to cost you later because it absolutely will.
Dan DeGolier (10:42)
100%.
Jeff Mains (10:43)
Yeah. So you mentioned cashflow and that is absolutely a break, you know, make or break kind of issue for any company, but especially SAS. When we think about, you know, what is our CAC payback time and things like that. What are some tips or frameworks for improving cashflow visibility and forecasting?
Dan DeGolier (11:01)
Well, I mean if you have if you’re in a market in which your customers are can pay you upfront for an annual contract rather than monthly I mean that certainly can affect your ability to Have better working capital and and be able to defer ⁓ When you need to raise your next round if you’re if you’re a a venture backed firm who is raising multiple rounds of capital
But really understand, understanding what those payment terms are and making sure that you’re following up. If you are, whether you’re billing annually or quarterly or monthly, that you’re collecting and following up and getting prepayments where you can, ⁓ just realize that cash is oxygen. And so you need to keep that flowing. ⁓ And then when it comes to cash outflows, ⁓ try to negotiate the best terms you can for your vendor payments.
Jeff Mains (11:55)
That makes a lot of sense. And I think that’s a really good thing is getting as much upfront as possible, but then also making sure that you’re forecasting how that’s being spent. A situation with a company that we were working with and they were getting a lot out front, but their CAC payback time was about eight months and they were growing really fast. And so burning through that cash and then, you know, they’re looking forward going, Hey, we’re not going to be able to pay our vendors and keep our system live.
in another three, four, five, six months unless we do something.
Dan DeGolier (12:29)
Yeah, you’ve got to have real clarity around that. need to understand, you know, make sure your investors understand that as well. If you’re ⁓ suddenly accelerating faster than you expected, ⁓ but you do have a longer payback period, then it’s important that you know where that capital is going to come from. If you need additional working capital, whether you’re going to try to borrow or have, you know, from your investors or others, where that money is going to come from and whether you’re going to…
need to accelerate your timing of your next race, the size of your next race.
Jeff Mains (13:01)
Just because we collect it all up front doesn’t mean we can spend it all up front.
Right. Especially if sales slows down at some point. That’s a lot of companies really got caught, think, in that just assuming that they were going to keep growing over the last couple of years. then sales started slowing. The sales cycle extended. Sales started slowing down and really ended up getting caught in some bad places.
Dan DeGolier (13:25)
absolutely
have to be prepared for a downside scenario as well. mean, it’s one thing you can have your forecast that appears that’s been vetted and you feel like it’s achievable based upon your pipeline and your road to market strategy and everything else. if something does unfortunately happen and sales happen slower, understand what your plan B is. How are you going to slow the hiring or are you going to have to cut?
⁓ costs, you know, what does that look like, ⁓ especially if you just feel like the market forces and the winds have changed against you.
Jeff Mains (14:02)
A of founders do focus on cashflow positivity and they think about that and some of them profitability. But there’s a big distinction between the two and why is it that both of those matter and should be tracked differently?
Dan DeGolier (14:16)
Yeah, I mean, I would say the cash flow is more important to track because you can be ⁓ profitable, like I mentioned earlier, and you can be profitable, ⁓ but still be cash flow negative based upon the gap. The gap financials will indicate what your gap profit is, but your cash flow is really what is going to provide your ability to continue as a going concern.
and be able to continue to reinvest in the company and everything else. So ⁓ they are different. I ⁓ won’t go into ⁓ too much of accounting speak here, but essentially your ⁓ gap is you’re recognizing costs when you incur them and recognizing revenue when it’s sold and when the SaaS services are delivered. But that doesn’t.
necessarily those time periods don’t always match up with when the cash is coming in the door or going out the door.
Jeff Mains (15:16)
Yeah. Yeah. So let’s talk a little bit about revenue recognition. I think that’s a really important topic and I’ve seen a lot of companies do it a lot of different ways and some really smart, some very conservative, some, you know, not compliant with anything I’ve ever seen before. What do you see out there in the marketplace and how should founders be thinking about revenue recognition?
Dan DeGolier (15:41)
At the end of day, the simplest way to think about it is you recognize the revenue when the services are being provided. So in a SaaS company, ⁓ it’s based upon the contract, the term of the revenue should ⁓ be recognized over the term of that license. ⁓ And if you’re selling additional seats or it’s based upon some level of usage, make sure you’re that and your revenue recognition should be tied to.
to the contract and how the usage and delivery of the services are provided.
Jeff Mains (16:13)
So if you’re selling something and you’re collecting it all up front, you’re recognizing it over time, not recognizing it all up front.
Dan DeGolier (16:19)
you’re deferring that revenue over the period it’s being delivered. If you have a services component to it, then that again comes back to the contract. You may need to amortize that implementation fee over the life of the contract as well. It depends on a number of factors there. And so I would, if you’re going to be audited, make sure that you have ⁓ somebody on your team or talk to your audit firm about how to appropriately recognize that because there are some intricacies there to be aware of.
Jeff Mains (16:48)
without a doubt. And it’s interesting you mentioned like services or implementation is it does matter.
Dan DeGolier (16:55)
And again, those are, are, those are, you have hard costs associated with that, right? have people costs of doing that and maybe some licenses, some third party licenses that you have involved there. So keep in mind that’s how that’s going to affect your working capital at the same time. You know, are you going to need to, does that require an additional upfront payment from your customer in order to continue to scale that?
Jeff Mains (17:19)
Yeah. What metrics should founders be tracking, particularly from a financial perspective? And let’s stick to say the three to $20 million range. What are the things that are most important?
Dan DeGolier (17:31)
I mean, it’s the typical ones that probably most people are aware of. It’s your MRR and your ARR and your CAC and your LTV. I really also am a big fan of the importance of net retention when you’re at that size. ⁓ I think it’s really critical to, I think an investor’s gonna care about that and you ⁓ as an executive team member ought to really be focused on net retention. And that of course is how much ⁓ your
current cohort is going to grow or shrink as a result of churn and upselling additional services within that cohort. there’s additional fees, additional add-ons. true, true.
Jeff Mains (18:14)
Yeah.
Ascent CFO emphasizes robust dashboards and real-time visibility into metrics. So what role do financial dashboards play in decision making and how do you guys see that and recommend founders be looking at that on an ongoing basis?
Dan DeGolier (18:31)
Yeah, great question. You know, there’s a reason it’s called a dashboard, right? It’s like driving a car. You you’ve got to keep an eye on not just how much gas you have in the tank, but whether your engine’s overheating. I mean, there’s a lot of things to know what’s going on. So if you’ve your – if you’ve established clear KPIs, which is the first step, what are your key KPIs for the given period, you know, the month, the quarter, the year, the three-year plan?
know what those KPIs are and then be tracking those. And the nicest way to be able to do that is to get a single screen of truth that gives you the current visibility as to whether you’re on track or off track. Things like your pipeline, your sales pipeline. you, you realize what has to be top of funnel in order to hit your goals for the quarter? Is that on track or not and have, you know, your…
your dashboard is your kind early warning system to show you if things are on track or if they’re off track.
Jeff Mains (19:35)
Is that something that you guys set up or is that something that the founders should do on their own or some combination?
Dan DeGolier (19:42)
We definitely, what we typically do is we will work with the founders and the executive team to identify those KPIs. Let’s really, every business is a little bit unique. What are the key drivers of your particular business? What’s really gonna, are gonna be the key performance indicators that are gonna be in advance of closing the books and recording the results. What are those getting?
to ⁓ look like and then once that’s developed then we can build out. We’ve got a team here that we will work with clients with to create those dashboards. We’ll use various tools, Power BI and others to create ⁓ a real-time dashboard so people will have that real-time visibility at all times.
Jeff Mains (20:28)
That’s good. Besides, you know, net retention, net revenue retention, net dollar retention, ⁓ what are some of the other ones ⁓ that are really critical to pay attention to? I MRR, ARR, mentioned those. Net dollar retention, for sure.
Dan DeGolier (20:47)
Even just pure churn is really important as well. ⁓ Understanding ⁓ if you’re growing like crazy and your ARR is increasing but you still have higher churn rates, you want look at that and figure out what’s going on because that’s going to be an important factor. ⁓ The grocery tension is also interesting. ⁓ Your CAC to LTV, of course, is an important one to track.
There’s a number of them that are important, but I still think net retention when you’re starting to scale is a super critical piece because that’s a tough hole to dig out of if you’re going negative there or flat.
Jeff Mains (21:30)
Yeah. Well, there’s a pretty significant shift in the, a couple of years ago and continued from growth at all costs to capital efficient growth. And it reminds me of old Warren Buffett quote, you know, only when the tide goes out, do you discover who’s been swimming naked. when growth is just going crazy and you can do no wrong, there are a of, a lot of mistakes that can slide by. And now that we’re in an era more of capital efficient growth.
What are some of the best practices and things that we should be thinking about going forward?
Dan DeGolier (22:03)
Capital efficiency, that’s the answer. It’s a matter of understanding what is your growth at all. We tend to go through cycles, right? I’ve been around long enough to see the cycles of growth at all costs versus make sure that you’re being very efficient with the capital that you have on hand. Fundraising is taking longer. There’s still a lot of capital on the sidelines, but things are taking longer.
know, best practices, I think, would be think hard about the people, you know, the hiring and what they’re adding to your team. I mean, as a, you know, a technology company, people, at the end of the day, people are the most critical components. So are you, do you have the right leadership with your customer success team to, you know, back to the churn issue? Are you spending your…
your marketing and sales dollars wisely so that you’re able to capture the ROI on those initiatives. Is the engineering team running as efficiently as possible? All those types of things I think are important. It’s kind of, you know, I don’t want to make it sound too much like common sense, it’s like, just understand the dollars you’re spending. they the right place to be spending them and creating, ⁓ moving towards your goals?
Jeff Mains (23:22)
Well, SaaS industry has historically prioritized growth over profitability. And why is now the right time? I think it’s probably always been the right time. But to really shift our mindset toward balancing profitability and growth.
Dan DeGolier (23:36)
Yeah, there’s a point in time. mean, there’s a, in the early stages, it really is about market share and disruption. You’re disrupting the way things have been done. ⁓ Growth is probably the right way to look at things in the early stages, but there’s a point in time when now that needs to pivot and ⁓ you’ve got the right account. Capital isn’t free forever. Capital doesn’t just keep flowing in forever. ⁓
Eventually, a lot of companies are to be looking for an exit, they’re going to IPO or whether they’re going to be acquired and with a biased strategic, where they can bring their technology into a larger company. ⁓ But there’s a point in time when ⁓ you’ve got to meet your maker, I guess, and flip that switch and start to be ⁓ cash flow neutral and cash flow positive.
and therefore profitable. Right. There’s timing differences, they’re,
Jeff Mains (24:38)
Yeah. Fundamentals actually do matter. ⁓
Dan DeGolier (24:42)
Fundamentals matter, 100%.
Jeff Mains (24:45)
100%. Amazing, who knew?
Dan DeGolier (24:47)
Yeah. ⁓
Jeff Mains (24:50)
But you’ve worked with companies scaling from startup to 100 million. What are key financial milestones that SAS leaders should focus on at each stage of that growth journey?
Dan DeGolier (25:01)
Wow, okay, that’s a big question. ⁓ is. Early on, it’s MVP and making sure that you’ve got a market, understanding what your market looks like. Then there’s the phase of scaling the company where you’re continuing to capture, continuing to grow and seeing growth in your ARR. ⁓ Then there’s that point when you become more capital efficient. ⁓
there’s ⁓ there are you know and a lot of this is dependent upon what your you know who whether you’re what the funding environment is like out there what the funding whether there’s ⁓ you know what your goals are from the perspective of ramping sales, ramping ⁓ you know what that exit strategy is there’s so many so many different inputs and outputs and every company is a little bit different but
But generally, it’s in the early stages, you’re proving you have something people want to buy, then you’re scaling it by going to off your market, whether you’re going after SMBs or enterprises or a little bit of everything. And then reaching a point of maturity where you need to start moving towards a cash flow neutral, cash flow positive situation.
Jeff Mains (26:22)
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Well, thinking about fractional CFOs, we definitely want to have great people. some of the best of the best are increasingly in favor of flexible work arrangements, where they’re not in one company, they’re in multiple, which is good for them, but it’s also good for the founders. How does your model attract top talent, and how do clients benefit from that approach?
Dan DeGolier (28:02)
Yeah, so the headline on our careers page is flexibility and variety. ⁓ And I realized that there’s a lot of people like myself who ⁓ might get bored just working for one company day in and day out. ⁓ the idea of somebody who’s been in the CFO chair before, they’re experienced CFO, they’ve raised capital, they’re strong with FP &A, they’re
really, really great at building models, they’re strategic in nature. ⁓ There’s a lot of ⁓ benefits from being able to work across different industries and across different companies and with different teams. ⁓ It can be really exciting. Now it’s not for everybody, right? Some people aren’t necessarily wired that way. And so that’s something we do when we’re recruiting for talent is to make sure people are really wired for ⁓
not just being good at what they do, but being great communicators and really good at extending expectations and being able to switch. If you’re working with three or four or five different companies, you’ve got to be able to be really good at time management and understand what it means to be able to switch from one mode to another as you’re supporting different executive teams.
Jeff Mains (29:18)
makes a lot of sense. Yeah. What are maybe some myths or misconceptions that people would have about, you know, fractional CFOs and how do you address those?
Dan DeGolier (29:27)
Hmm. or misperceptions? ⁓ That’s a tough one. I’m not sure how to answer that. ⁓
Jeff Mains (29:35)
Maybe a misconception is that if I have somebody that’s part-time or fractional, they’re not really going to understand my business well enough to give me the advice that I need because I’m super special.
Dan DeGolier (29:45)
Yeah,
sure. ⁓ I think that could be one word. And I think there probably are ⁓ some fractional CFOs out there who do struggle with that. I think with us, we do, ⁓ you know, it is important. Our best engagements is where we really do engage as part of the executive team, right? Each CFO is working with between, you know, three to five.
clients generally, a couple of those, maybe one or two of those might be the more significant ones as far as the number of hours you’re putting in. And so we want to go, and that’ll change over time, right? We might start with an engagement where a client is especially cost sensitive, they’re pretty early, we’re probably not going to put in quite as many hours on a weekly and monthly basis with them. But those companies who are really engaging deeply, we embed ourselves as part of that team. We’re in the board meetings, we’re in the executive offsite meetings, we’re
We’re deeply embedded as part of that team. We’re just doing that for a couple days a week rather than full time.
Jeff Mains (30:46)
Sure. That makes a lot of sense. I think it’s a really good model and you know, finance doesn’t change a lot from one company to another, especially if you’re, within an industry. And I love having the expertise that you’re able to take expertise that you gained at one organization or over time and be able to report that to another one. And because you’ve seen it so many times.
Dan DeGolier (31:10)
Very much so. And then also as the team of our size, we’re about 37, 38 people total right now. And we also leverage each other’s collective experience. So if we come across a particular challenge and somebody has a question about whether it’s integrating systems between one another, whether it’s some other kind of a technical ⁓ question to come across, we’re able to.
⁓ communicate that within a team and bring in other resources to help them solve problems that that teammates already seen before.
Jeff Mains (31:45)
You talked a little bit about mergers acquisitions and it could be sell side by side. When should companies be thinking about bringing in a full-time CFO or a fractional CFO in advance of those types of decisions?
Dan DeGolier (32:01)
Yeah, I think it’s really important to have an expert on your team who’s been through that before. Someone who’s been around the block before. There’s a lot of complexities when it comes to exiting a business. There’s a lot of things that can go ⁓ off the rails. Things probably will go off the rails at some point. And so you want to have somebody who’s going to be steadfast and will ⁓ help give things back on track. ⁓
without going into too much detail, There’s motivation for buyers to try to renegotiate and bring the price down. Sellers don’t wanna see that happen. anyway, there’s a lot of complexity around that and just having someone on the team who’s been through it multiple times is really critical, whether that’s a fractional CFO or whether that’s another type of consultant or a full-time CFO. M &A is a…
is a complex deal. also need to have a great attorney who’s been there, not probably a general practitioner, if you will, but more of somebody who’s done lots and lots of deals before. ⁓ Having a good deal team is really important, whether you’re using an investment bank or not. But having somebody on your team, fractional CFO or otherwise, I think is super critical.
Jeff Mains (33:21)
Absolutely. Yeah, it’s definitely not a job for the your bookkeeper and you know, you need this is the tax expert you need. It’s not the person that does your tax return. ⁓ It’s somebody of a deeper expertise in that attorneys that the deal with them and a there’s just so many ways, like you said, that things can can go wrong or things to look for. So, you you may feel really good in the deal and think, hey, this is great. And and then you find out, you know, the valuation is half what it should be.
There’s so many things that can go sideways.
Dan DeGolier (33:55)
Yeah, yeah, no, it’s there. There’s yeah and you know, if you’re going through it for the first time, you might might totally freak out. if you’re, if you’ve got some of the team who’s done it six times, they say, this is normal. This is going to happen and here’s how we’re going to get through it. And here’s, here’s the strategy on this. You know, it’s a, it’s a big, it’s kind of a chess match at times. So it’s good to have a chess master, I guess.
Jeff Mains (34:19)
That’s a really good analogy for what it is because it really is somebody that’s kind of coordinating all of those parts and working along with the tax expert, the attorneys, the investors, the integration teams, making sure that the market is right, the culture fits right. mean, there’s so much to think about whether you’re buying or selling.
Dan DeGolier (34:42)
Yep, 100%. ⁓ You hit the nail on the head with that.
Jeff Mains (34:47)
One of the biggest mistakes that I’ve seen is waiting until the end and it’s like, we’re ready to go to market now. We’re ready to raise. And now it’s time to bring somebody in. And at that point, there’s a little bit that can be done, but what really needs to happen is like 18 months, two years before all of that stuff needs to be happening. You know, getting up to that moment. Have you seen that as well?
Dan DeGolier (35:13)
Absolutely. There’s a lot of lot of prep work you want to know, you know, it’s have expectations of what the data room is going to look like have all those have all those pieces ready to go. So when it is time to go to market, you can you can populate your data room. You know, I touched on earlier, but having really crisp financials, accurate financials, cruel based follow gap, and then having a reliable forecast process so that you’re hitting your forecast numbers because you know, deals are going to take
you know, at least 90 days. So during that time, you’re to be closing the books three times. And if you say you’re going to, if you, if you’re forecasting revenue and profit numbers during those three months, and then you’re producing actuals, if you’re missing those numbers, you’re, you’re kind of screwed. ⁓ You know, you’ve got to be able to, so you have to have that discipline of forecasting accurately ⁓ well in advance of that. And, and so you can, you can hit those, you know, hit, hit or, or overachieve those numbers.
that you’ve shared with that that buyer. Really, really important. Yeah. And there’s
Jeff Mains (36:14)
think a lot of founders are… Go ahead.
Dan DeGolier (36:17)
I was gonna say, as you touched on, like, but it’s not a process where you just say, okay, I wanna sell, you know, we’re recording this conversation in January. You don’t wanna say, okay, I’m getting ready. We wanna sell in June. Like, no, you need to have minimum 18 months really to do it well and to get all of your pieces in order ⁓ so that you are ready to go to market with a.
the coherent story and strategy and how your team assembled. There’s a lot of, a lot of pieces that need to be in place in advance.
Jeff Mains (36:50)
Yeah. I like that story and strategy. Those are our two key components and they have to fit together. Yeah. think a lot of founders are pretty good at forecasting and maybe it’s just gut feel the next 30, 60 days, but when they get to 90 or 180 or even a year, things are really, really fuzzy out there. What are ways that we can, we can think about that or things that we can do to make it more clear.
Dan DeGolier (36:56)
100%.
As far as your forecasting goes. Yeah, I mean, experience helps ⁓ understanding, you know, the ⁓ having somebody who can really vet your pipeline. mean, a lot of it’s going to, you know, do you have do you have a reliable ⁓ forecast on your churn? You break down the revenue and multiple components. You’ve got your churn, your your net retention, how you’re growing the
Jeff Mains (37:18)
Yes.
Dan DeGolier (37:46)
your existing cohort of clients, what additional offerings you’re going to have, then how are you capturing your revenue? How reliable is that? And then you’re, of course, on your expense side of your income statement. You also want to make sure you understand your cards and your SG &A and whether you’re going to need to spend more to deliver more and what that looks like from every single
line item on your your PNL. So I think it’s, it’s just taking the time to understand and challenge and and support all of your assumptions. And then learn every month that every month you close the books, you realize, okay, what do we miss? were are we are we on track? Are we off track in different categories? Do is the marketing spend appropriate? Again, I’m coming back to that as being a highly discretionary ⁓ area where a lot of areas are less so.
Jeff Mains (38:44)
Right, right. Well, the founders that the do see acquisition as part of their exit strategy. What is the financial operational groundwork? They should be laying 18 months in advance to maximize valuation and success.
Dan DeGolier (38:57)
⁓ Clear metrics, clear KPIs, ⁓ accurate gap financials, and again, back to the forecasts, having really dialed in line item, accurate forecasts that ⁓ it’s like a, it’s a little bit like training for a marathon or something where you’re each, learning, you’re refining and improving day after day, week after week.
⁓ what you’re, things you’ve learned about, you know, your body if you’re training or your company if you’re getting ready for it. It’s just best practices to have to be super crisp on that.
Jeff Mains (39:40)
Excellent. Where can people learn more about you and about Ascent CFO solutions online?
Dan DeGolier (39:46)
Well,
we’re at ascentcfo.com, pretty easy to find. And then we’re pretty active on LinkedIn. We don’t really do much with other social media, but we try to be ⁓ great, put some new pieces out there on our LinkedIn. So just to search for Ascent CFO Solutions on LinkedIn. And we also have a newsletter, probably twice a quarter, we send out ⁓ some content that we hope is valuable.
We don’t send emails for email sake. We try to create things that are valuable. feel free to sign up for our newsletter on our website as well.
Jeff Mains (40:23)
outstanding. We’ll make sure and link all of that, including the newsletter subscription in the show notes.
Dan DeGolier (40:28)
Wonderful.
Jeff Mains (40:30)
Dan, that was a great conversation. Thanks for being on SASS Fuel.
Dan DeGolier (40:34)
Yeah, thanks for having me, Jeff. It was really a fun time. I appreciate it.
Jeff Mains (40:37)
Thanks again, Dan, for coming on the show and sharing your journey and insights. Such good stuff. You can learn more about Dan and Ascent CFO at ascentcfo.com. As always, all links, highlights, resources, and full show notes are available at sasfuel.com. And be sure to check us out on YouTube as well. Full video episodes, outtakes, shorts, reels, just training out there. Lots of stuff for you. And that’s at Champion Leadership on YouTube. Thought leaders share.
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Join us Thursday as Chris Ball, co-founder and managing partner at Hoxton Wealth, shares how he scaled his firm from $35 million to $2.1 billion under management. Discover key financial principles that drive long-term success and maybe a little bit of tax strategy as well. And on our founder episode next week, we’ll sit down with Casper Tornow, CEO and co-founder of Questionbase, to explore how AI-powered Slackbots are revolutionizing knowledge management.
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