Why successful founders should really understand cost of goods sold and how it can make or break your business.
Long before Honey was purchased by PayPal for $4 billion dollars, we reached out to Ryan, the founder, on Linkedin to see if they could use our service. Like most companies we work with, Honey had hired a mediocre bookkeeper who said that they had regularly worked with startups but in actuality was in over their head. In fact, Honey repeatedly said that they weren’t actively looking for accounting help, but deep down the founder knew they probably needed it.
Punch started working with Honey when they had 12 employees, and they were a very small SaaS company who was just starting to generate revenue. Punch worked with Honey for over 2 years until we helped transition them to their own in-house team and were being audited by Ernst & Young.
Punch worked hard with the founders and management team to truly understand their cost of goods sold and how to improve their gross margins. After all, SaaS companies need extremely healthy gross margins to flourish.
When Punch started working with Honey, we immediately implemented financial operations that could scale with them. In fact, Honey scaled extremely fast and we only changed systems after the company’s revenues exceeded $100MM.
From the onset, Punch helped Honey to create financial statements that helped tell their “story.” Growth in multiple markets, different revenue streams, and healthy margins were obvious from reading the financial statements.
When Honey started to grow, it was having a hard time finding the right investors and venture capitalists to support their vision. Punch helped Honey find their Series A investors that fueled their growth and assisted at every step of the way.
“Punch was the missing piece of our puzzle. The clear financial statements and CFO guidance really helped us in our early stage to maximize our revenue model and accelerate our growth.”