Focus on Fundamentals in 2022

Venture capital firms spent 2021 deploying massive amounts of capital at earlier and earlier stages. The $643 billion in global venture investment marked a 92% increase over 2020, resulting in record valuations.

In the United States alone, startups raised $281 billion in venture funding in 2021, a 105% year-over-year increase, according to York IE Fuel.

Now, less than a month into 2022, we’re starting to see signs of change. The public markets have been trending down. You can’t spend more than a few minutes on Startup Twitter without reading a post about VCs taking a more cautious approach this year. And Axios wrote last week that we’re on the downslope of the startup valuation peak.

What does this mean for York IE and the companies we invest in?

Nothing.

We don’t begrudge startups for taking advantage of the huge pools of capital that have been available. But we believe in building strong companies that are capital efficient.

If a startup’s revenue doesn’t justify its valuation, that startup might not be in a position to use its funding effectively. And that means the founders sold more of their company than they needed to in order to accomplish their business goals.

The amount of money you raise is a vanity metric, and your valuation is nothing but a paper return until you exit. Make sure your fundamentals — revenue, customers and growth — justify your valuation now, because you don’t necessarily know when that moment is going to be.

At the end of the day, every company is going to be valued on its fundamentals, not what’s going on in the market.

How Do People See You?

When I was young, footloose and fancy-free, I once went on a blind date. In my opinion, the evening was going well. My dad jokes were on point and I had yet to spill anything on my shirt. Things were going so well that my date said, “You remind me of a movie star.”

Here we go, I thought. I sat back and waited for the ego boost to roll in.

Brad Pitt? Leo DiCaprio? A young George Clooney?

Mr. Bean,” she said.

My ego was shattered. If I had been smart I would have asked her why. But instead I just grunted and sped through dessert.

At the time I wasn’t aware of the importance of this information. You need to understand how you are perceived. This is at the heart of why a market-in approach is so crucial.

The truth will set you free. Are you truly Mr. Bean or, for another audience, are you actually Brad Pitt? Hopefully to my wife, I am the latter. But if not, then I will be the best damn Mr. Bean I can be — and at least I will know!

In the product extension of this analogy, doing this discovery means you won’t spend time selling to someone who sees you as something you are not. Figuring this out as quickly as possible will save you a lot of time and emotional investment.

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York IE Hires New Senior Accounting Analyst: Cassidy Huckins

Recently I joined the York IE team as their senior accounting analyst. In this role, I will be responsible for accounting operations, analysis and reporting. I will also serve as a practice specialist for the Financial Operations and Capital Strategy advisory services, working to support service delivery and customer engagement with our startups.

What interests me the most, and what pushed me to join the York IE team, is the opportunity for growth. My role isn’t your typical private accounting job. Yes, I will be internally entering invoices, creating financial reports and making sure our QuickBooks is in line with our budget, but I have also been given the opportunity to connect externally with clients. This is where my role in the Financial Operations and Capital Strategy services will come into play. I will be working with CFO Janelle Gorman, directly and assisting her with clients. We will be offering our knowledge in financial operations and giving them the best advice we can to get them to reach their goals.

My prior job came from public accounting, where I was constantly connecting with clients and offering both audit and tax services. I am excited to continue this connection with clients at York IE to push them in the right direction.

Working directly with Janelle has been incredible so far. She has explained to me the many opportunities available to me at York IE that will enhance my career. Janelle has been a great mentor so far and I am thrilled to be working with her!

York IE has already impressed me with how well they treat their employees and offer a flexible work/life balance. This is just the beginning for me at York IE, and I am looking forward to a great future ahead!

Heather Lavoie Joins York IE as Newest Advisor

(Manchester, N.H., Jan. 24) — York IE, a vertically integrated strategic growth and investment firm, announced today that Heather Lavoie is a new advisor focusing on digital health.

Lavoie was most recently president and CEO of healthcare analytics company Geneia, helping to drive alignment and collaboration among healthcare providers through technology, education, training, insights and clinical services. As an advisor, she will help York IE’s portfolio companies by leveraging her 30-plus years of experience in the healthcare industry.

Heather Lavoie
Heather Lavoie

“The future of health IT is now, and there has never been a better time for the healthcare industry to implement a digital front-door strategy, “ Lavoie said. “I know firsthand how healthcare leaders can tap into the power of data, AI and cloud-based digital platforms, and I look forward to helping York IE’s respective portfolio companies discover what is needed to bring this vision of digital transformation to market.”

The recent rise of healthcare technologies has brought into focus what it means to deliver medicine and digital care programs in a more efficient, customized way. More and more providers are looking for a greater holistic view of their patients’ health through better access to data, while patients are looking for more control over their medical needs.

“The technology is here to reshape and rethink how healthcare is delivered,” said Kyle York, CEO, York IE. “I’m excited for our portfolio companies aiming for digital healthcare to harness Heather Lavoie’s experience and think about long-term strategy in building scalable, profitable businesses.”

Previously, Lavoie was co-founder and vice president at Choicelinx, a healthcare IT company that Cigna acquired in 2005.

Lavoie joins other publicly listed York IE advisors, including:

  • Tom Daly, former senior vice president of infrastructure at Fastly and former co-founder and CTO of Dyn;
  • Mark Sunday, longtime Oracle CIO and enterprise technology expert;
  • Dr. Julie Gurner, executive performance expert and founder of executive performance coaching business Gurner Consulting;
  • Kara Banosian, CMO of Stavvy; and
  • Mike Arsenault, senior account executive at PromoteIQ;
  • in addition to more than 30 other investment partners and advisors.

Why I Joined York IE

Many people have asked me why I left the world’s biggest company, which prints cash and dominates in every vertical and industry it enters. Fair question. From a career standpoint, I had a once-in-a-lifetime opportunity at Amazon. I had a great job and worked with some amazingly talented people, and the paycheck wasn’t too shabby.

The answer is, I didn’t run from Amazon. I ran to York IE. To fully understand why, I should start from the beginning.

I joined Target in 2006 as an intern and spent 10 years there in HR (HR store leadership, campus recruiter, HR business partner, regional recruiting manager). I loved Target and am forever grateful to have learned from some of the best. Target truly understands the importance of the employee experience and nails leadership development. This opportunity set my foundation for what good HR looks like.

After 10 years, it was time for me to move — for personal reasons mostly, but I was also curious about what else was out there. Was there anything about HR or running a business that I didn’t know? Oh, how cute was sweet, innocent Brittany.

I decided to take a leap of faith and join a small, privately owned marketing agency in my native New Hampshire. I loved getting back into the Manchester community and building relationships and my network. Going from supporting a client group of over 5,000 employees to less than 100, I naively thought, how hard can this be? Insert foot into mouth.

I had little understanding or appreciation for small businesses and the level of hustle required to keep them afloat. This role was exactly what I needed to shift my mind from cushy, big corporate life. It isn’t that we didn’t work hard at Target, but there was a level of risk at a small business that just didn’t register with me.

I sunk my teeth into the things I had no prior experience in: payroll, benefits, state employment laws, etc. I focused on modernizing their HR functions (no more paper files!) and implementing more current practices, including a new applicant tracking system and HR information system, performance review processes, employee handbook, and an updated employment and culture brand. I directly advised the CEO and leadership team, first on talent decisions, and over time on business decisions. I became well-versed in the financials and found myself advising on improved sales and delivery processes, marketing initiatives and beyond.

I am no expert in these areas, but my perspective and opinion began to carry weight. I started to think about HR’s seat at the table. I was no longer viewed as the person who onboards and offboards employees, but as a valued and trusted member of the leadership team. Having had a taste for this small startup vibe, I wanted to explore something that was small but growing.

Enter PillPack, an emerging player in the healthcare and pharmacy startup world. As it turns out, networking and building relationships really does work. Thanks to friendships made with pharmacy leaders at Target who became PillPack executives, I was able to secure a role at an exciting time.

At the time, PillPack was a hyper-growth, venture capital-backed pharmacy with over 500 employees across seven states in a heavily regulated industry. The HR operation was in need of some TLC, which is not atypical for that stage and pace of growth. We did some amazing things in my first year, but the most important achievements weren’t “glamorous” or “cool.” Instead, we focused on the nitty gritty of compliance, regulatory and legal work.

For our size, there was a risk in not getting critical employment practices in check. After a thorough inspection into our current culture and HR practices, we quickly launched a handbook and updated policies and processes. I again found myself modernizing HR practices, tools and systems. We revamped our recruiting processes and onboarding to remain compliant with healthcare and pharmacy state and accreditor requirements. Performance appraisals were overhauled, and leadership was properly trained on performance management and coaching expectations.

All of this was timely, because 12 short months later, I sat across the table from the Amazon corporate development (acquisition) HR team, getting peppered about our I-9 process, independent contractors and compliance practices. (Note to hyper-growth startups looking to be acquired: HR compliance matters!)

Once acquired by Amazon, we had to start all over. PillPack was the first healthcare company integrated into the Amazon ecosystem. With that came complexity. Due to healthcare and privacy regulations, not all HR and IT practices could be centralized within Amazon’s tools and systems. We had to rebuild every single HR process from scratch, again. After three years of hard work and repeatedly explaining why pharmacy had to be different from how the rest of Amazon functions, I can proudly say our HR functions were officially integrated.

Now I want to go build again — and do it with the amazing York IE team and the exciting companies we invest in and support. Being a resource, advocate and thought partner for founders and leaders who sometimes need a strategy, and sometimes need a friendly ear, is where my passion lies. I am so excited to get started.

Call me crazy (don’t worry, I know I am), but this scrappy, fast-paced, hyper-growth hustle is my jam. I absolutely love helping leaders navigate the world of HR, talent and recruitment at every stage, in every industry.

Our current landscape is harder now than ever. New work styles and regulations are on the horizon, along with an aggressive labor market and rising compensation packages at every level. The great resignation is changing how we look at retention efforts, employee engagement and the cultures we have built, either on purpose or by accident. It can be daunting and overwhelming.

I say bring it on.

The Secret Sauce of Success

Here’s a dirty secret about successful tech startups: It isn’t all about the tech!

Of course, amazing technology plays a huge role, but the difference between good companies and great companies comes down to the people.

Building a company culture that can attract and retain the best talent is one of the most important differentiators you can create. In those early days of a company, hiring the right people is a force multiplier and can accelerate your progress.

For example, a first crucial hire for York IE was Kate Campbell, our vice president of advisory services. Hiring Kate was like hiring three regular people. Great people attract other great people. Kate’s first hire was our newly promoted advisory services director, Meaghan McGrath. Like Kate, Meaghan had the production of multiple people. So York IE hired two new people but got the output of five. That is how you crush goals!

Having seen firsthand how impactful talent can be on a company, I am thrilled that we launched our new Talent and Culture services last week, led by the amazing Brittany Flanagan. Brittany understands that startups don’t succeed because they fill job reqs. They succeed because they create an environment that brings out the best in people. If you can do that, you will create a special place to work, and that feeling will extend to your customers, partners, and industry.

If you’re interested in building not just generational products but also a legendary place to work, please hit us up! We want to help.

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What Is Financial Reporting and Why Is It Important?

Financial reporting is a method of measuring a company’s performance by putting together organized statements that inform stakeholders of its financial history, projections and overall financial health.

In this post, you’ll learn about the main types of financial statements for startups, why they’re so important to master and more.

Table of Contents

Why Is Financial Reporting Important?

In nearly every aspect of life, we use numbers and metrics to help us figure out how we’re performing. Sales teams track leads and conversions, content producers monitor page views and social audiences, and quarterbacks watch their touchdowns and interceptions.

As the quarterbacks of their companies, founders and CFOs need to make sure they’re keeping stakeholders informed of their financial operations.

Benefits of Financial Reporting

Financial reporting helps internal and external stakeholders stay updated on a company’s status so they can make informed decisions.

Think of the web of stakeholders you’re dealing with everyday: customers, employees, investors, banks and more. Each of these stakeholders is interested in different aspects of your financial status. Potential investors will want to analyze your numbers before making an investment. Your leadership team will want to understand the company’s financial position when planning out new hires for the year.

Everyone will be viewing the same information on your financial statements, but when you present financial analysis and reports, be sure to present the information in a way that’s most relevant to that specific stakeholder — like you would for a board of directors meeting or a leadership team call.

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Key Types of Financial Reports and Statements

Speaking of those statements, let’s take you back to Accounting 101. Every founder and CFO has to master three main financial reports:

Income Statement

The income statement reports financial results over a period of time, comparing revenue earned and expenses incurred.

It often tells stakeholders, “Here’s what we’ve earned and what we’ve spent growing the business over the past year.” Investors will be interested in revenue growth over time and how you’re spending capital. Trend analysis becomes particularly important in a startup, because often what you spend in a year is actually an investment for future earnings.

I always recommend that our clients track their income statement on an accrual basis, as opposed to a cash basis, if they plan on growing their business quickly (which they should!). An accrual basis provides a far more accurate view of the company’s health. Under that methodology, the income statement reflects revenue as it’s earned and expenses as they’re incurred, rather than when the cash trades hands.

For instance: If you pay in advance for a 12-month contracted service, the company would take that expense over 12-months, rather than a big one-time hit at the payment date.

The income statement is where to start the crucial process of financial modeling.

Balance Sheet

Rather than reporting financial position over a period of time, the balance sheet reports your company’s finances at a specific point in time. The income statement might read “for the year ending Dec. 31,” whereas the balance sheet shows a snapshot “on Dec. 31.”

The balance sheet shows your assets, liabilities and equity balances. It describes the resources your company has at its disposal and what it owes to others. Stakeholders will have an idea of your financial stability and if you have the resources to reach your growth projections.

Statement of Cash Flow

The statement of cash flow is a financial reporting document that communicates where your cash is coming from, where it’s going and the runway you have with your capital position.

Most startups are running lean balance sheets, so they need to know, quite simply, how much longer they have before they run out of money. A positive cash flow ensures you can make payroll, keep your platform running and know when you need to fundraise or seek out a startup loan for an injection of capital.

I recommend that early-stage companies utilize the direct method, which may be a simpler approach for less complex entities without complicated financing or investing cash flow activities. The direct approach lists cash inflows and outflows to form the statement.

If no stakeholders require a formal statement of cash flow, you could consider reporting an informal cash movement analysis, which can provide a simpler approach to cash burn and runway calculations, to support decision making.

Financial Reporting Tips

Understanding the three main financial statements is a great starting point. Here are three more quick tips to bolster your financial reporting strategy:

Take Time for Financial Modeling and Forecasting

You wouldn’t go on a road trip without a map or GPS, right? The same goes for your startup growth. Building and updating a sound financial model will help you plan for the future and communicate your growth goals to stakeholders.

Be Wary of Your Burn Rate

How long will your cash last? It’s a vital question for most startup founders and CFOs.

Gross burn rate shows how much cash is spent each period compared to your available capital. Net burn rate considers cash spent only in excess of cash received, which provides a more accurate picture of cash runway for companies that generate steady revenue, such as platform companies with subscription models.

Your cash runway indicates how long the company can operate at the current or projected burn rate before it runs out of resources. Be sure to source additional funding, whether equity or debt, while you have several months left on your cash runway to allow time to work through the process.

Analyze Ratios and Trends

Ratio and trend analyses are necessary for time-strapped founders who can’t always manage every finance down to the penny. Keep accurate data so that you can analyze ratios and financial trends to help you understand your company’s health now and over time.

Diligent financial reporting helps you analyze trends in the present and plan for the future.

Why I’m Supporting Boston Children’s Hospital

These past two years of hybrid work have reminded us that we’re more than just people working at companies. We’re human beings with even more important roles and responsibilities outside of the office. And we all want what’s best for our families.

Family has always been at the heart of everything I do. As I think about my own family situation, or that of any member of my team, I take great comfort in knowing we have such a tremendous resource in Boston Children’s Hospital nearby. That’s why I’m so happy to join the Boston Children’s Hospital Philanthropic Board of Advisors, a truly special group of hospital supporters and advocates.

Throughout my career, I’ve tried to pass down the lessons I’ve learned to the next generation — many of whom will become future entrepreneurs who just may change the world. That is why, over the years, I’ve worked closely with the Boys and Girls Club of Manchester, Stay Work Play New Hampshire, Rock On Foundation, The Joe Yukica New Hampshire Chapter of the National Football Foundation and my alma mater, Bentley University, to name some. A few years back, my wife Katie and I established the York Family Foundation for our philanthropic and charitable efforts, focused primarily on supporting kids.

In this new role, I am honored to be advocating for our most vulnerable young people. I want to lend my network and skills to help the great institution continue its work of helping children in need. This organization is something our entire startup and technology network can get behind.

The children of today are the entrepreneurs of tomorrow. They deserve health, happiness and knowledge. I will continue to work, as best as I can, to ensure as many kids as possible get access to those opportunities.

That is a future worth investing in.

Appreciating the True Treasure

In 1928, Henry Clay Folger, a man who created the largest private Shakespeare library in the world, retired after 47 years at Standard Oil. During that time, he rose to the highest levels of the executive suite and so it was no surprise that John D. Rockefeller himself would send him a note upon his retirement. What was surprising was the key point Rockefeller highlighted. As described in the wonderful book, The Millionaire And The Bard, Rockefeller wrote:

“These long and delightful business relations mean inexpressibly more than the gold and silver that came from their great prosperity.”

Rockefeller, whose fortune at the time was essentially the equivalent to $400 billion today, understood that the greatest treasure we receive are the people with whom we get to work.

As we kick off the new year and get fired up for all of the goals we have ahead of us in 2022, this is a great lesson to remember. The goal should be to enjoy the moment we’re in. The chance to come into work every day and collaborate alongside people you respect, with the opportunity to build something special… that is the goal. And we are living it.

So enjoy. Appreciate. And, no doubt, there will be great prosperity.

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York IE Launches New Services to Help Companies Attract and Retain Top Talent

Firm hires former PillPack and Amazon executive

(Manchester, N.H., Jan. 11) — York IE, a vertically integrated strategic growth and investment firm, today announced the launch of new advisory services to help companies attract and retain top talent, make their culture a strategic differentiator, and drive sustainable, profitable growth. The firm has hired former PillPack and Amazon executive Brittany Flanagan as vice president of talent to lead this effort.

“To attract and retain the best talent, you can’t be reactive. You need to have a comprehensive strategy that covers everything from your org chart to compensation plans and compliance,” said Kyle York, CEO, York IE. “A lot of companies, regardless of stage, don’t have that expertise. As a result, they’re losing their ability to compete in a competitive job market.”

The new advisory services will help companies attract and retain talent, build an authentic culture and implement workplace best practices. To do so, York IE will advise companies on a variety of issues, including:

  • Compensation planning and analysis
  • Benefits analysis
  • Training and onboarding
  • Workforce development and career pathing
  • Organizational structure and team architecture
  • Compliant employment practices
  • Employee lifecycle process development and implementation

York IE’s Talent and Culture services are available through hands-on engagements with the firm’s advisory services team and on-demand via its Fuel platform.

“This new offering is going to help companies access everything they need to transform into an employer of choice, and there is no better person to lead this practice than Brittany,” York said.

Meet Brittany Flanagan

In her new role, Flanagan will also be responsible for the strategy and execution of talent initiatives within York IE, including recruiting, training, diversity, equality and inclusion initiatives, compensation planning, benefits management and staff development.

Flanagan previously worked as a senior human resources manager at Amazon Pharmacy, which she joined through Amazon’s acquisition of PillPack, where she served as vice president, people operations. Prior to PillPack, Flanagan ran talent and culture at SilverTech. She started her career in human resources at Target.

“At the end of the day, companies are about people,” Flanagan said. “Attracting and retaining those people is the difference between having a good idea and a generational company. I’m thrilled to help startups build out these practices so they can grow and achieve their vision.”

York IE currently offers the below advisory services to help companies strategically grow, and the firm is always listening to the needs of entrepreneurs, investors and startup communities:

  • Market and Product
  • Financial Operations and Capital Strategy
  • Go-to-Market and Sales Scaling
  • Marketing and Communications

To learn more about York IE’s talent offering, visit york.ie/services.

ABOUT YORK IE

York IE is a vertically integrated strategic growth and investment firm helping reshape the way companies are built, scaled and monetized. Through Fuel, its SaaS platform, hands-on advisory services and selective early stage B2B SaaS investments, York IE supports ambitious entrepreneurs, operators and investors on their quest to scale startups and disrupt markets.

MEDIA CONTACT

Kate Campbell
VP, Advisory Services
kate@york.ie