Run the Numbers CJ Gustafson

Andy Ivanovich, the CFO of The Knot, joins CJ to dissect the company’s business model. He sheds light on how The Knot, which functions like an operating system for weddings, has grown to expand its product suite and reach, and now touches two-thirds of adult Americans each year. Andy explains the five dimensions of the company’s transactions that make it so unique. He also sheds light on The Knot’s ICP (Ideal Customer Profile) and customer LTV (Lifetime Value), and how they optimize for a supplier's lifetime value through their subscription model. He sheds light on some M&A wisdom, explaining the Build, Buy, or Buddy framework for a roadmap expansion, and why “burning the lifeboats” is necessary for fully committing to change. Tuning in, you’ll hear about the CFO’s job of “truth-seeking”, why your team should be encouraged to challenge conventional wisdom, and how to manage a healthy level of friction amongst your peers.
If you're looking for an ERP head to NetSuite: https://netsuite.com/metrics and get a customized KPI checklist.
—
SPONSORS:
Mercury is the fintech ambitious companies use for banking and all their financial workflows. With a powerful bank account at the center of their operations, companies can make better financial decisions and ensure that every dollar spent aligns with company priorities. That's why over 100K startups choose Mercury to confidently run all their financial operations with the precision, control, and focus they need to operate at their best. Learn more at mercury.com.
Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group and Evolve Bank & Trust®; Members FDIC.
NetSuite provides financial software for all your business needs. More than 37,000 thousand companies have already upgraded to NetSuite, gaining visibility and control over their financials, inventory, HR, eCommerce, and more. If you're looking for an ERP platform ✅ NetSuite: https://netsuite.com/metrics and get a customized KPI checklist. 
Maxio is the only billing and financial operations platform that was purpose built for B2B SaaS. They're helping SaaS finance teams automate billing and revenue recognition, manage collections and payments, and put together investor grade reporting packages. 🚀 Request a demo at www.maxio.com/runthenumbers for 10% off your first year.
Leapfin is accounting automation software that automatically prepares and posts reliable journal entries. High-growth businesses like Reddit, Canva, and Seat Geek choose Leapfin to eliminate manual tasks, accelerate month-end close, and enable accounting leaders to provide faster insights to help their companies grow. To automatically standardize your revenue data with measurable business impact, check out leapfin.com today. 
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FOLLOW US ON X:
@cjgustafson222 (CJ)
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TIMESTAMPS:
(00:00) Preview and Intro
(02:26) Sponsor - Mercury | NetSuite
(05:17) The Knot’s Business Model
(14:06) The Five Dimensions of the Knot’s Transactions
(19:11) Sponsor - Maxio | Leapfin 
(21:25) High-Risk Transactions and Trust
(23:40) The Knot’s Customer LTV (Lifetime Value)
(27:54) The ICP (Ideal Customer Profile) of The Knot
(31:38) The Reach of the Company 
(34:01) The Impact of the Pandemic
(38:53) When Revenue is Recognised From a GAAP Perspective
(40:17) The Number One Customer Request
(43:02) The Role of “Truth Seeking” in Being a CFO
(44:48) The Build, Buy, or Buddy Framework 
(48:30) Encouraging Dissenting Opinions and Critical Reasoning
(52:01) Long-ass Lightning Round: The Biggest M&A Mistake
(55:49) The Knot’s Finance Software Stack
(56:31) Andy’s Craziest Expense Story


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In this episode, CJ interviews Guido Torrini, CFO of OneTrust and former CFO of Celonis, who has played a crucial role in shaping finance strategy and operations at two successful pre-IPO companies. Guido shares profound insights into managing his finance team more like an agile tech organization than a traditional planning function. He explains why he doesn’t believe in budgets, breaks down the V2MOM framework essential to his team’s success, and sheds light on how he ties company priorities back to the budgeting process. Additionally, Guido and CJ discuss the qualities that differentiate wartime and peacetime leaders. Guido also explains what he means when he says he wants his finance teams to make the news, not just report it, and shares wisdom on riding waves both professionally and as a company. 
If you're looking for an ERP head to NetSuite: https://netsuite.com/metrics and get a customized KPI checklist.
—
SPONSORS:
NetSuite provides financial software for all your business needs. More than 37,000 thousand companies have already upgraded to NetSuite, gaining visibility and control over their financials, inventory, HR, eCommerce, and more. If you're looking for an ERP platform ✅ NetSuite: https://netsuite.com/metrics and get a customized KPI checklist. 
Maxio is the only billing and financial operations platform that was purpose built for B2B SaaS. They're helping SaaS finance teams automate billing and revenue recognition, manage collections and payments, and put together investor grade reporting packages. 🚀 Request a demo at www.maxio.com/runthenumbers for 10% off your first year.
Leapfin is accounting automation software that automatically prepares and posts reliable journal entries. High-growth businesses like Reddit, Canva, and Seat Geek choose Leapfin to eliminate manual tasks, accelerate month-end close, and enable accounting leaders to provide faster insights to help their companies grow. To automatically standardize your revenue data with measurable business impact, check out leapfin.com today. 
Mercury is the fintech ambitious companies use for banking and all their financial workflows. With a powerful bank account at the center of their operations, companies can make better financial decisions and ensure that every dollar spent aligns with company priorities. That's why over 100K startups choose Mercury to confidently run all their financial operations with the precision, control, and focus they need to operate at their best. Learn more at mercury.com.
Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group and Evolve Bank & Trust®; Members FDIC.
—
FOLLOW US ON X:
@cjgustafson222 (CJ)
—
TIMESTAMPS:
(00:00) Preview and Intro
(02:38) Sponsor - NetSuite | Maxio
(05:10) Peacetime Versus Wartime Leaders
(13:11) Influencing Inputs Versus Reporting Outputs
(17:47) Leapfin | Mercury
(20:42) Guido’s Revenue Equation
(23:00) The V2MOM Framework for Capital Allocation
(27:34) Why Guido Doesn’t Believe in Budgets 
(30:08) How This Agile Planning Plays Out
(35:38) Sizing Up Controllable Versus Non-controllable Spends
(36:56) Forecasting Growth and Challenging Mindsets
(40:43) Riding Waves Professionally and as a Company
(43:36) The Impact of Geographical Location on Guido’s Career
(48:01) Long-ass Lightning Round: Mistakes Guido Has Learned From
(49:58) Guido’s Advice to His Younger Self
(51:05) OneTrust’s Finance Software Stack
(53:21) Craziest Expense Story


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In this, the first solo episode of Run the Numbers, our host CJ Gustafson gives a crash course in sales compensation. He explains how to go about designing sales rep comp plans, covering who’s involved in this process, getting the base to variable split right, on-target earnings ratios, how to baseline core achievement, the role of accelerators, what actually counts as a booking, and comp plan flaws, referencing Salesforce's early comp plans as a case study. He also delves into the art and science of SPIFs (Sales Performance Incentive Funds), explaining why SPIFs succeed or fail, the best times to run one, and how you should structure them. He finishes the episode talking about paying sales reps, commission rates and benchmarks for account executives, and what the total commission stack should look like after you factor in everybody.
If you're looking for an ERP head to NetSuite: https://netsuite.com/metrics and get a customized KPI checklist.
—
SPONSORS:
Maxio is the only billing and financial operations platform that was purpose built for B2B SaaS. They're helping SaaS finance teams automate billing and revenue recognition, manage collections and payments, and put together investor grade reporting packages. 🚀 Request a demo at www.maxio.com/runthenumbers for 10% off your first year.
Leapfin is accounting automation software that automatically prepares and posts reliable journal entries. High-growth businesses like Reddit, Canva, and Seat Geek choose Leapfin to eliminate manual tasks, accelerate month-end close, and enable accounting leaders to provide faster insights to help their companies grow. To automatically standardize your revenue data with measurable business impact, check out leapfin.com today. 
Mercury is the fintech ambitious companies use for banking and all their financial workflows. With a powerful bank account at the center of their operations, companies can make better financial decisions and ensure that every dollar spent aligns with company priorities. That's why over 100K startups choose Mercury to confidently run all their financial operations with the precision, control, and focus they need to operate at their best. Learn more at mercury.com.
Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group and Evolve Bank & Trust®; Members FDIC.
NetSuite provides financial software for all your business needs. More than 37,000 thousand companies have already upgraded to NetSuite, gaining visibility and control over their financials, inventory, HR, eCommerce, and more. If you're looking for an ERP platform ✅ NetSuite: https://netsuite.com/metrics and get a customized KPI checklist. 
—
FOLLOW US ON X:
@cjgustafson222 (CJ)
—
TIMESTAMPS:
(00:00) Preview and Intro
(01:44) Sponsor - Maxio | Leapfin
(03:58) Designing Sales Rep Comp Plans
(06:09) Getting the Split Right
(10:41) Baselining Core Achievement
(13:29) Sponsor - Mercury | NetSuite
(15:24) Accelerators
(18:05) Paying Sales Managers
(19:21) Case Study: Salesforce - Cash, Years, and ACV
(22:15) What Counts as a Booking
(23:15) Comp Plan Flaws
(25:31) An Introduction to SPIFs
(26:42) Why SPIFs Fail
(29:25) Where SPIFs Succeed
(30:23) Good Times to Do a SPIF
(33:37) SPIF Structures That You Can Copy
(35:28) Strategy Recap
(37:48) Paying Sales Reps
(40:44) The Total Commission Stack
(43:40) Factors That Can Push the Stack Higher
(45:15) Wrap


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Aneal Vallurupalli, CFO of Airbase, an AP automation, spend management, and procure-to-pay solution, joins CJ to discuss all things risk management. He explains the different categories of spend outside of payroll and the biggest pain points within them. Aneal does a deep dive into fraud and how to prevent it, explaining how Airbase's number one product is really trust. He covers the non-payment risks to your company, the need for stage and growth-appropriate risk, and the benefits of a risk roadmap for your company. Aneal also delves into value metrics and what makes a good one. As someone with experience in the people function, he provides a unique perspective on why every finance person should get some recruitment experience, before explaining the qualities that separate good CFOs from great ones, and the role of the CFO as a "chief alignment officer".
If you're looking for an ERP head to NetSuite: https://netsuite.com/metrics and get a customized KPI checklist.
—
SPONSORS:
Leapfin is accounting automation software that automatically prepares and posts reliable journal entries. High-growth businesses like Reddit, Canva, and Seat Geek choose Leapfin to eliminate manual tasks, accelerate month-end close, and enable accounting leaders to provide faster insights to help their companies grow. To automatically standardize your revenue data with measurable business impact, check out leapfin.com today. 
Mercury is the fintech ambitious companies use for banking and all their financial workflows. With a powerful bank account at the center of their operations, companies can make better financial decisions and ensure that every dollar spent aligns with company priorities. That's why over 100K startups choose Mercury to confidently run all their financial operations with the precision, control, and focus they need to operate at their best. Learn more at mercury.com.
Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group and Evolve Bank & Trust®; Members FDIC.
NetSuite provides financial software for all your business needs. More than 37,000 thousand companies have already upgraded to NetSuite, gaining visibility and control over their financials, inventory, HR, eCommerce, and more. If you're looking for an ERP platform ✅ NetSuite: https://netsuite.com/metrics and get a customized KPI checklist. 
Maxio is the only billing and financial operations platform that was purpose built for B2B SaaS. They're helping SaaS finance teams automate billing and revenue recognition, manage collections and payments, and put together investor grade reporting packages. 🚀 Request a demo at www.maxio.com/runthenumbers for 10% off your first year.
—
FOLLOW US ON X:
@cjgustafson222 (CJ)
—
TIMESTAMPS:
(00:00) Preview and Intro
(01:52) Sponsor - Leapfin | Mercury
(03:57) Managing the People Function as a CFO
(05:28) Parallels Between Sales Pipelines and Candidate Pipelines
(07:49) The Evolving Nuances of Hiring Globally 
(11:54) Different Categories of Spend Outside of Payroll
(13:20) The Biggest Pain Points in These Spend Categories
(17:22) Sponsor - NetSuite | Maxio
(19:50) Fraud Prevention at Airbase
(24:43) Risk Management and Standing Up a Risk Function
(28:00) Non-payment Risks
(30:20) The Need for Some Risk and a Risk Roadmap
(32:25) Value Metrics  
(35:32) Airbase's North Star Metric of “Spend Under Management” 
(38:53) Examples of Value Metrics for Other Companies
(44:03) Metrics Aneal Looks at Each Morning 
(45:59) The Qualities of a Great CFO
(48:54) The Long-ass Lightning Round: Aneal’s Mindset Shift
(50:55) Aneal's Finance Software Stack
(52:41) Craziest Expense Story


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In this episode, Ruslan Sergeyev, Managing Director of Hercules Capital gives CJ a masterclass in venture debt. He explains what venture debt is, its various types, and the potential benefits it can bring to your business. Ruslan sheds light on the current landscape and big players in venture dept. He provides insight on covenants, rates, warrants, and success fees in debt structure, and the difference between banks and funds. The discussion covers how much debt is appropriate for a capital stack and when you should refrain from raising venture debt altogether. Discover strategies for leveraging each banking activity as a chip to get the best deals with banks and learn what red flags to look out for in the process. 
If you're looking for an ERP, head to NetSuite: https://netsuite.com/metrics and get a customized KPI checklist.
—
SPONSORS:
Mercury is the fintech ambitious companies use for banking and all their financial workflows. With a powerful bank account at the center of their operations, companies can make better financial decisions and ensure that every dollar spent aligns with company priorities. That's why over 100K startups choose Mercury to confidently run all their financial operations with the precision, control, and focus they need to operate at their best. Learn more at mercury.com.
Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group and Evolve Bank & Trust®; Members FDIC.
NetSuite provides financial software for all your business needs. More than 37,000 thousand companies have already upgraded to NetSuite, gaining visibility and control over their financials, inventory, HR, eCommerce, and more. If you're looking for an ERP platform ✅ NetSuite: https://netsuite.com/metrics and get a customized KPI checklist. 
Maxio is the only billing and financial operations platform that was purpose built for B2B SaaS. They're helping SaaS finance teams automate billing and revenue recognition, manage collections and payments, and put together investor grade reporting packages. 🚀 Request a demo at www.maxio.com/runthenumbers for 10% off your first year.
Leapfin is accounting automation software that automatically prepares and posts reliable journal entries. High-growth businesses like Reddit, Canva, and Seat Geek choose Leapfin to eliminate manual tasks, accelerate month-end close, and enable accounting leaders to provide faster insights to help their companies grow. To automatically standardize your revenue data with measurable business impact, check out leapfin.com today.
—
FOLLOW US ON X:
@cjgustafson222 (CJ)
—
TIMESTAMPS:
(00:00) Preview and Intro
(02:36) Sponsor - Mercury | NetSuite
(05:13) Venture Debt: A Definition and Its Flavors
(08:07) Valuations Versus Distressed Sale Value for Venture Debt
(10:10) The Truth About Excess Cash Balances Held as Collateral Post-SVB Collapse
(14:28) The Percentage of Debt Deals Done in Conjunction With Equity Raises
(15:22) Typical Covenants Imposed on Startups
(16:38) Advice for CFOs Trying to Get the Best Terms or Covenants
(17:41) Covenants, Rates, and Warrants in Debt Structure
(20:00) Sponsor - Maxio | Leapfin
(23:19) When Not to Raise Venture Debt
(24:22) How Much Debt is Appropriate for a Capital Stack
(27:20) Ratios for Presenting the Business Case for Venture Debt 
(28:28) The Current Landscape and Big Players in Venture Debt
(33:01) Banks Versus Funds
(35:24) The Skews That Make the Most Money for the Bank
(36:25) Why Venture Debt is at the Top of Funnel for Banking Services 
(39:33) Whether or Not You Want to Be One of the Smallest Clients in the Bank's Portfolio
(41:31) Debt Versus Equity
(43:08) The Nature of the Relationship Between VCs and Venture Debt Players
(48:00) Using Each Banking Activity as a Chip to Get the Best Deals 
(50:05) Red Flags in the Venture Debt Process
(52:34) The Types of Deals Hercules Capital is Interested in


Get full access to Mostly metrics at www.mostlymetrics.co

Boris Wertz, the founding partner at Version One Ventures, a VC firm that invests in marketplaces and other startups, joins CJ to discuss the evolution and dynamics of marketplace models. Boris sheds light on his early years as a founder and operator at AbeBooks, and what he learned from selling the platform to Amazon during the dot-com boom. He explains the benefits of focusing on a niche instead of going too broad, how he solved the chicken and egg problem, and what it means to be a long-tail model operator. He and CJ discuss where we are today in the development life cycle of marketplaces and why having the mindshare of the buyer is more important than owning the underlying supply. Hear how the financial profiles of marketplace models differ from typical SaaS models, the importance of understanding where demand and supply match in what Boris refers to as a “hotspot”, and what metric is more important than the take rate and the average selling price. 
If you're looking for an ERP head to NetSuite: https://netsuite.com/metrics and get a customized KPI checklist.
—
SPONSORS:
NetSuite provides financial software for all your business needs. More than 37,000 thousand companies have already upgraded to NetSuite, gaining visibility and control over their financials, inventory, HR, eCommerce, and more. If you're looking for an ERP platform ✅ NetSuite: https://netsuite.com/metrics and get a customized KPI checklist. 
Maxio is the only billing and financial operations platform that was purpose built for B2B SaaS. They're helping SaaS finance teams automate billing and revenue recognition, manage collections and payments, and put together investor grade reporting packages. 🚀 Request a demo at www.maxio.com/runthenumbers for 10% off your first year.
Leapfin is accounting automation software that automatically prepares and posts reliable journal entries. High-growth businesses like Reddit, Canva, and Seat Geek choose Leapfin to eliminate manual tasks, accelerate month-end close, and enable accounting leaders to provide faster insights to help their companies grow. To automatically standardize your revenue data with measurable business impact, check out leapfin.com today. 
Mercury is the fintech ambitious companies use for banking and all their financial workflows. With a powerful bank account at the center of their operations, companies can make better financial decisions and ensure that every dollar spent aligns with company priorities. That's why over 100K startups choose Mercury to confidently run all their financial operations with the precision, control, and focus they need to operate at their best. Learn more at mercury.com.
Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group and Evolve Bank & Trust®; Members FDIC.
—
FOLLOW US ON X:
@cjgustafson222 (CJ)
@bwertz (Boris)
Version One Ventures’ Guide to Marketplaces https://versionone.vc/marketplaces-guide-ed3/ 
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TIMESTAMPS:(00:00) Preview and Intro
(02:33) Sponsor - NetSuite | Maxio
(06:55) Winning in a Niche and Not Going Too Broad
(09:32) AbeBooks and the Chicken and Egg Problem
(11:22) Data Standardization and Abebooks’ Competitive Moat
(12:37) Buying Your Own Inventory and Doing Things That Don't Scale
(15:01) What It Means to Operate a Long-tail Model 
(17:28) Sponsor - Leapfin | Mercury
(19:27) Having the Mindshare of the Buyer Versus Owning the Supply
(23:35) The Shift From Products to Services in Marketplaces
(29:30) Where We Are Today in the Development Life Cycle of Marketplaces
(31:59) The Main Catalyst Driving the New Wave of Marketplaces
(33:25) Understanding Product Market Fit and Liquidity Ratios
(37:33) Financial Profiles of Marketplace Models Versus Typical SaaS Models
(43:46) The Importance of the Take Rate Metric in Marketplaces
(46:30) Why Frequency of Transactions Trumps Take Rate and Average Selling Price
(49:51) Boris’s Hit Rate in Returns on Early-stage Venture Investi