Kurt Rathmann is the Founder & CEO @ ScaleFactor, the startup providing an automated bookkeeping solution at its core, bringing all of your company’s important financial information into one place. To date, Kurt has raised over $105m with ScaleFactor from the likes of Byron Deeter @ Bessemer, Coatue, Canaan Partners, Stripes Group and Firebrand to name a few. As Michael @ Coatue told me before the show, there is no way Kurt was not going to be the founder of a bookkeeping company given his background. Prior to ScaleFacotr, Kurt was the CFO of KNS Communications and a Senior Audit Professional @ KPMG. In Today’s Episode You Will Learn: 1.) How did Kurt make his way into the world of startups and come to found the gamechanger for bookkeeping in the form of ScaleFactor? Does Kurt believe that Founders do need to be mission-driven or can founding a company be a more analytical exercise? 2.) How did it come to be that Kurt raised 3 separate funding rounds and over $105m in just 13 months? How does Kurt feel about the saying, "when there is money on the table, take it"? Having had his B and C pre-empted, how does Kurt feel about the rise of pre-emptive rounds today? How did Kurt approach the mental challenge of transitioning from resource-starved to relative resource abundance? Was that tough to do? 3.) What is Kurt's biggest advice to founders when it comes to investor selection? What does Kurt believe are the 5 things that VCs can do to add value? Why does Kurt believe it is the responsibility of the founder to extract that value from the VC? What can founders do to really get the most out of their investors? What has Kurt found to be the biggest value from his cap table? Where do founders think VCs add value but they do not? 4.) What are some very unique and deliberate things that Kurt does to create an amazing culture at ScaleFactor? How does he advise on creating great energy in the office itself? How does Kurt think about retaining that core ethos with the expansion to multiple offices? What have been some of the biggest challenges in scaling communications internally? 5.) Does Kurt believe that being outside of a core tech hub severely limits his ability to hire the best talent? What do founders outside of these hubs need to very strategically do? How does being outside of a core hub also impact how Kurt thinks founders need to approach fundraising? What specifically can they do to increase their odds? Items Mentioned In Today’s Show: Kurt’s Fave Book: The Empowered Challenger Playbook: How Brands Can Change the Game, Steal Market Share, and Topple Giants As always you can follow Harry, The Twenty Minute VC and Kurt on Twitter here! Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.
Kurt Rathmann, founder of ScaleFactor in Austin, Texas, re-joined us for an update show on this episode of Life In Accounting, the Where Accountants Go podcast!
Still feels like a start-up
I asked this early on in the episode, because I honestly wasn’t sure if “start-up” was still an appropriate term. However, while they are already in their 6th year of operation, Kurt agrees that the term still very much applies. With their high-growth, focus on culture, and constant innovation, Kurt says that they definitely still have the start-up type of environment.
5x employee growth
When we originally interviewed Kurt, they had just hired their 40th employee, and that was only about 15 months ago. When we recorded this update though, they had a total of 230 team members including their interns! Plus, they now are officing in 3 locations with a shuttle that runs every 30 minutes between them in order to remove the barriers that exist due to not being all centrally located. And this is all while their new 52,000 square foot facility is being built. They truly have experienced explosive growth since our last interview.
Marge continues to grow up
One of the other highlights of this interview was that we discussed Marge in greater depth. Marge is ScaleFactor’s Artificial Intelligence Controller. She can handle basic tasks such as responding to requests for information like a tax ID number, but also can handle more involved calculations of items such as burn rate and income or expense questions. And if that isn’t enough to catch your attention, Kurt says their team views Marge as just starting kindergarten. She continues to learn more and more every day and they feel that they have only begun to touch the surface.
If you have any interest in technology in the accounting field, this update on the growth at ScaleFactor and the original episode with Kurt Rathmann will certainly be valuable for you.
Other episodes that may interest you include: Byron Patrick and Donny Shimamoto
To listen in to our interview with Kurt Rathmann, please click on the player below:
In this episode of Life In Accounting: The Where Accountants Go podcast, Kurt Rathmann, CPA and CEO / Founder of ScaleFactor shares with us how his business model, ideology, and management style has created an extremely successful, cutting-edge company that will double in size by next year.
Big Firms? Auditing? How Do They Benefit Future Entrepreneurs?
Kurt started his post-college (Go Longhorns!) career at KPMG. One of the biggest lessons that Kurt has carried away from working with a Big 4 firm was the value of learning how to interact and communicate with a wide variety of people and personalities. He also learned much from his time in auditing, because you get to see so many aspects of the business and thereby learn about overall operations.
Growing a Business
Businesses grow when you have a passion for what you are doing. Research your passion. Find the biggest challenge or problem surrounding your field and come up with solutions. Be the one who comes up with new ideas. And when presenting ideas to customers, remember that presentations are enhanced when you can use a story to illustrate how your solution will positively affect their situation.
Building the Team…
Interestingly, Kurt has found that remote employees don’t work well for ScaleFactor because the arrangement interferes with the synergy of their organization. ScaleFactor thrives in a shared workspace where the creativity and innovation can flow freely. He will be the first to tell you though that it may work for others, it just doesn’t work well for them.
Some additional advice Kurt shares is to make sure you discuss successes with your team, but discuss failures even more. Being able to openly discuss issues helps you to quickly learn from those mistakes and enables everyone to grow from the experience.
Who are ScaleFactor and Xero?
For more information on ScaleFactor, please visit them online at: https://scalefactor.com/
For more information on the Xero software that was discussed in the audio as well, please visit https://www.xero.com/us/
To listen in on this interview with Kurt Rathmann, please use the player below:
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