Run the Numbers CJ Gustafson

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)
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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


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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

In this episode, CJ is joined by Angela Winegar, Head of Growth Strategy at Carta and recovering venture capitalist. Having had an unconventional career path, Angela’s experience in the worlds of both marketing and investing gives her a unique perspective on growth. She and CJ discuss the parallels between marketing and investing and Angela explains how marketing is really a form of capital allocation. She sheds light on what the return on investment should be for media budgets and why CFOs should seek to better understand the differences in outcomes and timelines behind individual campaigns. She covers the differences between brand, demand gen, and growth, and the value of each. She also provides insight into marketing metrics and attribution models before sharing entertaining anecdotes from her unusual career.
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)
@anggwin (Angela)
—
TIMESTAMPS:
(00:00) Preview and Intro
(02:28) Sponsor - Maxio | Leapfin
(04:58) Angela’s Unconventional Career Path 
(10:29) Marketing as a Form of Capital Allocation
(14:59) Expected Returns From Marketers Versus Investors
(15:44) Sponsor - Mercury | NetSuite
(17:56) What the Return on Investment Should Be on Your Media Budget
(19:50) Brand Versus Demand Gen Versus Growth
(27:35) When to Do Marketing Internally Versus Outsource 
(30:56) Marketing Metrics and Attribution Models
(35:55) Where Marketing Ops Should Sit Within an Org
(39:55) Working for Obama and Working in Government Versus Startups
(42:29) Angela on Meeting Michael Dell
(43:43) The Efficient Market Hypothesis: Right or Wrong?
(46:12) Insight Into Churn at Carta 
(49:05) Carta’s ICP of Lawyers



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Scott Haralson, CFO of Spirit Airlines, joins CJ in this episode to discuss the complexities of operating an airline business. He explains what it means to run an ultra-low-cost carrier model and what goes into calculating the operating costs per available seat mile, Spirit’s most important metric. He talks about the difficulty of forecasting for an airline, explaining the costs you may not think about, what goes into network planning, the challenges of hedging fuel prices, navigating capital intensive decisions such as buying airplanes, and doing all of the above through unpredictable economic cycles and volatility. He also sheds light on why Spirit’s ICP (Ideal Customer Profile) is leisure travelers over business travelers and the important role of dynamic pricing in the airline industry. 
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
(02:40) Sponsor - Leapfin | Mercury
(04:46) Unit Cost Production in an Ultra-low-cost Carrier Model
(08:02) The North Star Metric of Cost Per Available Seat Mile
(13:24) Spirit’s ICP of Leisure Travelers Over Business Travelers
(16:10) The Impact of Flight Utilization on Spirit’s Business Model
(19:42) Sponsor - NetSuite | Maxio 
(22:11) The Difficulty of Forecasting for an Airline 
(29:52) Flight Profitability and Network Planning
(31:21) The Operating Costs of Running an Airline
(37:06) Navigating Economic Cycles and Volatility in the Airline Industry 
(39:52) The Challenges of Hedging the Fuel Price
(44:33) Understanding Major Capital Allocation Decisions
(48:24) Navigating Dynamic Pricing  
(54:16) Scott’s Advice on Understanding What Really Matters
(55:33) Spirit Airlines’ Finance Software Stack
(57:54) Craziest Expense


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Silicon Valley veteran and early employee at Google, Facebook, and Quip, Molly Graham, joins CJ to discuss all things related to scaling startups, growing as a leader, and progressing in your career. Molly talks about her famous “Give Away Your Legos” talk and how this came about before she and CJ discuss the concept of “work grief” and how to get through it when you have to give up something that your identity is tied to. Having had a very non-linear career path and “stumbling sideways into things”, Molly explains the J-Curve versus staircase analogy for career progression and encourages especially those in finance roles to take big risks. From handling the grief of laying someone off to learning the skill of saying no, mastering the art of destruction as an important part of building a company, and knowing how to fire people not just hire them, Molly shares profound insights from her impressive career. 
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.
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)
@molly_g (Molly)
MOLLY’S SUBSTACK: “Lessons”
 
“‘Give Away Your Legos’ and Other Commandments for Scaling Startups” - Molly Graham:
https://review.firstround.com/give-away-your-legos-and-other-commandments-for-scaling-startups/ 
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TIMESTAMPS:
(00:00) Preview and Intro
(01:54) Sponsor - Maxio | Mercury
(04:15) What It Means to “Give Away Your Legos”
(07:59) The Concept of “Work Grief” and How to Get Through It
(12:30) Using the Worst-case Scenario as a Motivator
(15:41) Handling the Grief of Laying Someone Off
(17:28) Sponsor - Netsuite
(18:44) The J-curve Versus Staircase Analogy for Career Progression
(27:31) The Powerful Combo of Risky Paths and Network Building
(30:45) Why You Should Take a Risk if You’re in FP&A or Finance
(33:22) What It Was Like Working Directly for Chamath at Facebook
(34:19) Learning the Skill of Saying No 
(40:18) Why It’s Okay Not to Have a Career Path Mapped Out
(42:41) Destruction as an Important Part of Building a Company
(46:04) The Skill of Time Compression for Leaders
(49:23) The Importance of Knowing How to Fire People, Not Just Hire Them
(53:58) Glue Club and Who Can Benefit From It
(55:21) Finding Your Product Market Fit at Companies of Different Sizes
(59:38) Wrap


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In this episode, CJ is joined by Lanny Baker, the CFO of Eventbrite, and former CFO of Yelp, Monster.com, and ZipRealty. Lanny has been a part of some incredible business transformations or pivots at each of these companies and has some profound insights to share on the topic. First, he explains some of the differences between consumer-facing internet businesses versus SaaS or B2B. He sheds light on Eventbrite’s unique creator and consumer model, the virtuous cycle of network effects it benefits from, and how the company’s take rate is determined. Lanny also talks about the ways that internet platforms expand their TAM over time. This leads to a conversation on business transformations or pivots, the role of a CFO in them, whether to retain or replace people in such a situation, and how to handle investors. Tune in for all this and the hilarious story about a marketing stunt gone wrong.
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.
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
(02:25) Sponsor - NetSuite | Maxio 
(05:16) How to “Show Up for Life” in Business
(06:54) Consumer-facing Internet Businesses Versus SaaS or B2B
(11:03) First Principles in Building Your Operating Plan as a Finance Team
(13:13) The Benefits of Eventbrite’s Unique Creator and a Consumer Model
(17:28) The Most Important Metric for Eventbrite
(19:04) Sponsor - Mercury 
(21:34) The Factors That Determine Eventbrite’s Take Rate
(25:57) How Internet Companies Expand Their TAMs Over Time
(29:46) The Role of a CFO in a Business Transformation
(40:38) Replacing Versus Retaining People in a Business Transformation
(48:08) Handling Investors in a Business Transformation
(52:33) Long Ass-lightning Round: a Profound Lesson From Lanny’s Time at Monster
(55:26) The Hilarious Story About a Marketing Stunt Gone Wrong
(57:07) Lanny’s Parking-related Life Hack
(58:37) Eventbrite’s Finance Team’s Tech Tooling
(01:00:35) The Craziest Thing Someone Tried to Expense




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