Brazil has stood out as one of the main startup ecosystems in Latin America, with more than 13 thousand businesses registered in 2021, according to the Brazilian Association of Startups (ABStartups). Como fintechs, healthtechs and retailtechs have gained a lot of popularity in the country. In 2020 and 2021, they boosted the nation's leadership in receiving venture capital, with billions of dollars invested, according to the Latin American Private Equity & Venture Capital Association
With investments in full swing, it didn't take long for the mergers and acquisitions (M&A) market to become active in Brazil, with a growing number of operations involving startups. According to PwC Brazil, this sector has significantly increased the number of transactions in recent years, especially in the technology sector. Large M&A operations, how the acquisition of Linx by StoneCo for about R$ 6 billion in 2020, illustrate the exit potential for founders in Brazil. As the presence of foreign stakeholders in the country brings it closer to the internationalization of this ecosystem, it is necessary to understand the urgency of financial management practices aligned with investment standards
According toNatalia Baranov, M&A specialist, Tax Control and Management, Financial Planning and Analysisafinancial consultingcan act as a game changer for the success of a startup, especially in early stages. Many new businesses often face common challenges, that involve balancing sales operations, make decisions about new contributions and manage the flow of inflows and outflows of clients and collaborators. However, the role of the consultant is precisely to help them define long-term goals, establishing a clear path to achieve them efficiently and, overcoat, realism, explain
In addition to helping corporations survive, another mission of this type of service is to encourage them to thrive sustainably.When a founder seeks to solidify the brand's position and attract more significant capital, the first step is to find the ideal partner for strategic planning, resource management and preparation for fundraising, with the aim of ensuring that nothing affects the financial health of the business
Without the necessary support, C-level executives can easily lose the value and control of expectations and limitations of the startup. With financial management, on the other hand, consultants can use methods to establish a fair negotiation basis with investors, in addition to complying with the legal requirements demanded for each business. Finally, oriented on best practices, leaders can avoid penalties and ensure a transparent operation of investments, with the necessary tools to meet the expectations of both parties
With over 20 years of experience in the market, Natalia has already participated in company acquisitions that suffered more than R$ 1 million in losses due to lack of management, under the leadership of the former CEO. Therefore, she notes that many startups, focused only on growth, they neglect the importance of this control and discover critical points only after the negotiations, compromising the results that could be achieved with the expanded vision of consultancy and specialized reports, like the Income Statement (IS), the Balance Sheet and the Cash Flow
Startups often operate with limited resources. So, effective financial management ensures that every real is invested in a way that maximizes capital, prioritizing expenses that truly add value to the company. Another function also involves preparing the C-Levels for due diligence processes, helping them present finances in a transparent and appealing way to stakeholders, with brand valuation assessment and the preparation of compelling pitch decks. It is these details that ensure the growth of a startup that seeks not only profitable returns, but mainly a responsibility with resources, clients and investors, adds Baranov.
Financial consulting is the differentiator for startups looking to attract investments
