“You can’t afford us.
But you can’t afford
not to afford us.”

Carole-Lynn Glass, COO

The situation.
The CEO of a great life science start-up tells me, “We’re working with *******. I’m paying a thousand bucks a month, but I’m not getting anything I need.”

She says, “I’m getting basic bookkeeping. I’m doing my own payroll, they don’t do anything on equity. I have to call them, they don’t call me.

“I don’t get my financial statements at the same time every month. I don’t even know if they’ve closed. I keep finding mistakes and I have to point them out.

“So I was talking to someone and they said to call you guys…”

It was a mess. They had the CEO working the Carta equity admin system. They had somebody they had to buy stock back from. They had no idea how to do it.

The CEO and her bookkeeper were doing things their own way. Even though the bookkeeper was no longer there, she had access to all the systems, including the bank.

You had to go through her in order to cut a check. It was crazy.

The dilemma.
I sent her an estimate for $3500 a month. She said, “Wow, we can’t afford that.”

I said, “I don’t think you can afford not to do it, because of all of the issues you’ve already listed.”

“You’re not going to be ready for the next stage. You have investors, you have a board to report to, you have employees. You’re going to be hiring more people, you need better control of your benefits.” So, we went back and forth. She kept asking, “Can you do it for less?” I said, “I can’t, because if I tell you I can, one of us is going to be unhappy. Either you’re going to be unhappy because I’m billing you more than I’m telling you. Or I’m gonna be unhappy because I’m providing service free of charge, and I can’t do that when I have other clients to take care of.” So I said, “I think it’s just better if you wait.”

The way out.
Then SVB happened. She called the next day and said, “We never want to be in this position again.”

“We’re gonna work with you guys, but anything you can push out, let’s push it out. Let’s talk about what we absolutely have to do now, and what we can do when we raise more money.”

So we explained, “Here’s what we’ve agreed to do, and here’s the estimate. But below it is the list of all the other things that we can do for you — equity administration, audit, and so on.”

And we started working with them.

They fell in love with their Engine Room team and they said, “OK, well you’re doing this, can you do this other thing? And now we need this…”

Suddenly it went from, “Don’t do any of this…” to, “Oh my goodness, I didn’t even know…”

So we added services as they got comfortable with what we were doing. And they just started going down the list saying, “OK, now add this. Now add this.”

It was a way to ease them into the appropriate level of support. It got them over the sticker shock after they’d been paying $1,000 a month for an inadequate level of service. And it got the business ready to really succeed.

Stylized image of young life science start-up CEO

The reality.
If you’ve raised $2 million, you have all the issues of a company that’s raised $30 million.

If you’ve issued equity, if you have convertible notes, if you have employees, or you have a collaboration, or a grant. If you’ve raised money, if you have a board, there’s a lot of highly detailed work you need to do.

Does your accounting support cover all your needs? Are they doing the equity admin right? Are they onboarding employees? Are they the liaison with the payroll service, and benefits?

There are a lot of legal aspects, too — proper accounting and paying of the employees, who’s an employee, who’s a consultant…

It’s a good idea to talk to someone who can do all of those things, in a way that makes it affordable, and have a road map that says when you should start doing those things.

The moral of the story.
Start-ups need an infrastructure that works, that carries the company forward.

If you ignore stuff, or do it wrong, at some point you’re going to have to fix it. And what you don’t want is to have to fix it when you need to raise money, or you’re trying to go public, or you’re trying to sell the company.

You don’t want the accounting work to be the piece that makes you lose your big opportunity. It happens a lot, and it’s painful to see.

When you work with us, you get value for spending more. Your start-up can lay a rock-solid foundation, and build on it, instead of being really frugal and having to clean everything up in a crisis. You don’t need to do all this stuff yourself. We can help you with it, you can focus on your science and your business can flourish.

Ready to start the conversation? This moment could become a major inflection point in the evolution of your business. To start building the sophisticated, scalable finance and accounting infrastructure that leads to life science success, email Carole-Lynn at [email protected] or Mike Rose at [email protected].