Today, ScaleFactor is excited to announce our $2.5M seed round with Next Coast Ventures, Techstars Ventures, Firebrand Ventures, Matchstick Ventures, Edison Factory and Flyover Capital. This is a very exciting milestone for our company and is pivotal in our quest to automate the painful accounting and finance functions that burden the 29M small business owners in the United States.
This funding will fuel product development to further automate bookkeeping, cash flow forecasting and operational activities, such as bill pay. We are giving control back to business owners by empowering them to streamline and manage their back office in a single place. What does that mean? We’re directing these funds towards building new, innovative product features, strengthening our existing automation and further enhancing our customer experience.
The Obsession Begins: Solving a Pain Point
My first vision of ScaleFactor preceded my efforts to actually start the company. In my former role as a CFO in Denver, CO, I was facing accounting problems that stemmed from operational inefficiencies that kept me up at night. I lacked time, and had an organization running on “old school” manual processes. It took so much focus to get reliable data, that there wasn’t much time to actually analyze it to make better business decisions. It seemed backwards, and I knew there was a better way.
I began a quest to simplify the complex accounting tasks and automate the tedious manual work. In short order, I became obsessed. Fast growing companies have infinite to-do lists and often end up using 10+ softwares to allow the company to function. Before long, the overwhelming amount of different software solutions simply impedes traction. I was searching for something to help me save time, understand what was currently happening and prioritize the most important tasks while the business operated along its normal day-to-day.
I envisioned a dashboard where I could look at all the metrics, understand where to focus attention and then go solve that particular operational problem. I was looking for something that would work on top of the business’s existing software stack and enhance the ability to get things done efficiently.
ScaleFactor started in January 2014 at my living room table in Austin, Texas. The company was cultivated from the painful reality of financial business operations.
We started out as a services company knowing that we needed to learn first. We quickly realized that we were striving to solve a much larger problem than a traditional service ever really could. With a fierce determination to create a better way for owners and operators to control and grow their business, we transitioned to building a product. While we’ve adjusted our strategy, our goal remains the same: we’re not simply building features, we’re solving the problems that I felt as a CFO, and even more so, the problems that millions of entrepreneurs feel every day.
Why Wait 30 Days?
ScaleFactor is changing the way businesses receive and use their financial data by building a business intelligence system that not only enables entrepreneurs to control their financial health, but also empowers them to strategically grow their business.
We believe a major obstacle businesses face is that financial information is stale by the time they receive and digest it. It begs the question, why wait 30+ days?
To solve for this problem, we first set out to automate bookkeeping with the goal of speeding up the entire information flow. Doing this, we save business operators time and enable our ability to deliver fresh, real time business insights on an intuitive platform and dashboard.
In April 2017, we released our first version of automated bookkeeping – this was a huge accomplishment for our team and company. Powered by machine learning, our platform completes bookkeeping tasks, giving them time to focus on other areas of the business.
Automated bookkeeping completes the tedious work involved in the process and removes the typical cycle time. We cut the time it takes to get financial insights from about 30 days down to one day.
We’re using part of this funding to enhance our automated bookkeeping feature to make it even more powerful for our customers.
Staying One Step Ahead
Running a successful business is all about staying one step ahead. How many times have you opened a monthly statement, after the fact, and thought “I spent what?!” or, “I should’ve waited to make that purchase”? We believe these realizations are largely a result of stale or unavailable data in a business.
Technology and innovation are stronger than ever before, finally giving business owners alternative solutions. Frankly, it’s no longer acceptable to rely on last month’s data to make today’s decisions.
We believe accounting and finance information should help guide a business, not showcase reactive measurements. Accountants that don’t offer proactive guidance on a consistent basis are missing a big opportunity to enable their clients for success. What are we doing about this? We’re making it easier than ever before to get and use your important financial data.
ScaleFactor makes it easy to see your business in near real time. Our intuitive dashboard shows your important performance metrics at-a-glance. Proactive alerts and notifications provide clear visibility and constant insights of operations. We’re really excited to accelerate features that give our customers the ability to delightfully and proactively guide near term daily actions.
From a broad sense, we want to give the business owner their headspace back. This could equate to time, focus or anything draining their energy because they are in a state of financial unknown. We want our customers to focus on growing their business through the talents that got them there in the first place…and that’s likely not bookkeeping, accounting and tax returns. For us, however, it’s what we know and we love it.
Complexity Slows Execution
Managing a company’s financial operations extends well beyond bookkeeping. That’s why we offer a suite of back office solutions, including bill pay, invoicing and compliance management (with more on the way). Bill pay and invoicing make it easy to pay bills fast and get paid faster. By managing these tasks alongside bookkeeping, users can see accurate cash and outstanding balances without having to wait for information. We are fast, consistent and reliable.
Our Bill Pay feature is speedy and I am very excited about it. We have tirelessly insisted on building tools that make it easy for our customers to see their cash flow. By focusing on core friction points of a company’s bill pay process, speed and ease of use, our tool can send a payment to a vendor today and they get it tomorrow – every time. We want the action of paying bills to be organized, simple and painless. After all, no one really enjoys paying bills so our goal is to remove as much stress as possible from the process.
ScaleFactor’s compliance calendar is also a feature born out of necessity from running our own business. The compliance calendar tracks and shows what is due and when – all year long. This includes important filings like federal, state and local tax returns as well as other administrative deadlines that are important. We give our customers a countdown of what is due and information on how to complete what is required quickly. Too busy? ScaleFactor can also complete the item as well.
We released the first versions of these features over the summer and we have new enhancements being released constantly.
Onward & Upward
Our vision is that ScaleFactor makes it possible for business owners, operators, executives and entrepreneurs to focus their energy and attention where they need to instead of where they have to, and ultimately, to enjoy running their business. Our mission is intentional and simple: ScaleFactor exists “to enable businesses to thrive by creating products and solutions that accelerate innovation and enrich lives.”
ScaleFactor is focused on fundamentally changing the way people digest and perform accounting and finance functions in their small business. We want to give business owners their time back, and arm them with necessary information about what is happening in their business right now. Our funding allows us to accelerate towards our mission of massive impact in the communities in which our customers operate. With the addition of new features like mobile development, and the creation of our Trusted Partnership Network, ScaleFactor is on a journey to be the business management solution that allows key decision makers to run their entire business in one place.
Our investors understand the importance of automating and streamlining business management tasks while disrupting the very way it has been done for years. We are grateful for their support, guidance and confidence in our ability to unlock that potential within our customers. We are excited to use this funding to continue to propel our product and become the go-to solution for business owners across the country.
Our customers are our partners and why we do what we do everyday. We continue to focus our direction based on the daily needs of our customers. We are excited to continue to create value for them and to enable their success. Without our customers, we would be nothing. We love and appreciate every opportunity we get to make their business lives easier with less uncertainty.
Lastly and certainly not least, I must thank our team. The ScaleFactor team is an incredible group of people. I truly believe, “Who you spend your time with is who you become” (yes, credit: Tony Robbins). I consider myself lucky to spend time every day with these people. Every member of our team crushes their craft and it’s truly inspiring. Iron sharpens iron, and this milestone is the result of everyone putting their heads together to challenge the current way things are done in an industry ripe for change.
Derek Felderhoff, Director of People
Thanks for taking the time to read this. If you’re interested in learning more about the product, schedule a demo. We’d love to give you a tour.
Onward and Upward,