OnlyCFO

Weekly newsletter on software/AI stuff from a finance perspective 👉

[OnlyCFO @OnlyCFO]

@rfradin @termsheet @Pelion_VP @arampell @a16z @darian314 @GradientVC @jeffatNvidia Congrats Russell!

[OnlyCFO @OnlyCFO]

@HenryLSchuck @ZoomInfo It’s crazy how fast our expectations are rising today.

Just because you blew away buyers in your demo 3 months ago doesn’t mean they are still impressed with your software

[OnlyCFO @OnlyCFO]

@marketplunger1 Guilty

[OnlyCFO @OnlyCFO]

While all of you are crying about the market crashing,

Today is a great day for me and my investing strategy

Glass half full

[OnlyCFO @OnlyCFO]

@jaminball Excellent breakdown

[OnlyCFO @OnlyCFO]

@BradJCo Yeah, that’s a good point

[OnlyCFO @OnlyCFO]

We are in the vibecoding fatigue era…

Everyone (especially non-engineer folks) were really excited to build stuff. For many that happened with the release of Cowork at the beginning of this year.

Seeing a lot of these vibecoders get tired.

Might be a good time to “circle back” and sell to those people :)

[OnlyCFO @OnlyCFO]

@briansowards I’d say it exists but there is a reset happening where some experience gets wiped from everyone. Not all but some

[OnlyCFO @OnlyCFO]

Do you have ten years of experience, or one year of experience repeated ten times?

Important career question to regularly ask yourself

[OnlyCFO @OnlyCFO]

CISO just became the sexist title in tech

Know several companies that had no plans on hiring one just a few weeks ago that now have them as a top priority.

Cybersecurity insurance is going up…

[OnlyCFO @OnlyCFO]

@enggirlfriend I’m here for it :)

[OnlyCFO @OnlyCFO]

“Since you're not doing this AI stuff”

☠️

[Ali Ghodsi @alighodsi]

I don't think we should fight. The two companies are complementary. Since you're not doing this AI stuff, I really think Snowflake should consider getting its AI tokens through Databricks. You can get both cheap OSS models as well as frontier (OAI/Ant/Gemini/Grok) models from our platform. It all goes through Unity Gateway which has Smart Routing, Budgets, and Access Control. You can even use Omnigent with any harness, including CoCo. Most of our customers used this to reduce token spend ~30% last few months while token count went up. Genie lets you then track, control, manage that spend, all your financials, marketing, etc. Quick POC?

[OnlyCFO @OnlyCFO]

@OdysseyStack We shouldn’t fight, but…you started it so….

[OnlyCFO @OnlyCFO]

@swolecedo 😂

[OnlyCFO @OnlyCFO]

If Anthropic can use a 2nd tier audit firm (Grant Thornton) through one year before a $2T IPO,

Then your software company that is <0.05% the valuation probably doesn't need to use the Big 4 yet...

[OnlyCFO @OnlyCFO]

@TheSaaSCFO Most just don’t care since they will do their on QoE anyways

But maybe slightly helpful if you know you want to be acquired at that stage.

[OnlyCFO @OnlyCFO]

I’m happy to see how much love this got. Maybe more will actually follow it….

Here are a few other thoughts on audits:

>Don’t do an audit at <$25M ARR. Consider after.

>Before audit, just send bank statements to the board

>Almost every series A/B docs require an audit. VCs will almost always waive/defer if you ask. Ask

>Big 4 often doesn’t equal better audit. But it does guarantee higher fees and more work from your team

>Big 4 is good and has their place. Like public companies, nearly public, and/or highly complex

>Small firms are often better for earlier stage companies. They are more willing to help (and obviously cheaper).

>It’s all about the team you get. Plenty of stupid people (or lack experience in your industry) at all firms.

>I am referring to 2nd or 3rd tier firms…not whatever metaverse pretend firm that FTX was using

>overpaying for a good head of finance is MUCH better money spent than overpaying on auditors

>Most of you will never IPO. Acquirers care very little if you used EY or a 2nd tier firm

>You can move to a 2nd tier firm if you are currently with Big 4 wit no real path to IPO. Quietly get a quote from a second tier and see if the price difference is worth it

[OnlyCFO @OnlyCFO]

If Anthropic can use a 2nd tier audit firm (Grant Thornton) through one year before a $2T IPO,

Then your software company that is &lt;0.05% the valuation probably doesn't need to use the Big 4 yet...

[OnlyCFO @OnlyCFO]

@BreezeCFO If inventory is material and revenue is still small than an audit (or limited audit) might be good even if you are small. Often lenders will require it if it’s material tho

But 2nd tier is fine

[OnlyCFO @OnlyCFO]

@Julian_Rowlands well said

[OnlyCFO @OnlyCFO]

@jasonlk but yeah, surprised so few do it today before they are audited...

[OnlyCFO @OnlyCFO]

@jasonlk it's an easy thing to do and a sign of trust. Even if the board never looks at it, they will trust the numbers a lot more knowing that the founders know they might

[OnlyCFO @OnlyCFO]

@BreakingSaaS Yeah, that’s a good place to start if the board insists on something early