The CFO’s Perspective on Managing Through A Down Market - GGV Live Webinar

TL;DR

A panel of financial experts provide insights on managing expenses, navigating the current economic landscape, and making strategic decisions during the pandemic.

Transcript

hi everybody I'm Glenn Solomon and we are super excited to kick off our webinar which we're gonna focus on managing through this crazy time from a financial perspective and I'm really excited that we have some good friends of ggv on the line with us as speakers we have Bruce felt who is a sitting CFO of Domo which is a public company and has been a... Read More

Key Insights

• 🥺 Strategic expense cuts can lead to increased productivity and positive stock performance.
• ⌛ Renegotiating contracts and maintaining customer relationships are vital during uncertain times.
• ❓ Timing is crucial when considering acquisitions, depending on due diligence, valuations, and market conditions.
• 👨‍💼 Prioritizing vendor negotiation based on liability and business requirements helps manage fixed costs effectively.

Questions & Answers

Q: How should companies determine the magnitude of expense cuts during uncertain times?

It's crucial to evaluate the specific circumstances of each company and use external factors as a reference. The panelists recommend setting a cash burn commitment and adjusting expenses accordingly to preserve cash flow.

Q: What are the risks and benefits of acquisitions during the pandemic?

Acquisitions can be an opportunity, especially if combining forces with another company facing similar challenges. However, due diligence may be challenging, and valuations in the market are unpredictable.

Q: How can companies manage fixed costs, such as leases, during the crisis?

They can negotiate with landlords and vendors to defer or reduce payments, but it depends on the specific lease and counterparty. Prioritizing which vendors to negotiate with is essential based on liabilities and business needs.

Q: Is the Paycheck Protection Program (PPP) appropriate for startups and how does it compare to other financial options?

The eligibility and relevance of PPP for startups is subjective and should be evaluated by leadership teams and boards. It's important to have realistic expectations about the timing of cash flow and weigh the benefits of PPP against other available financial options.

Summary & Key Takeaways

• The panelists discuss the importance of considering expense cuts and the magnitude of those cuts based on the unique circumstances of each company.

• They advise utilizing external factors to guide decisions, such as previous economic downturns and market trends.

• The panelists emphasize the need for proactive communication with customers and renegotiation of contracts to maintain existing business and relationships.