Not a huge surprise, but a recent BDO Seidman (an accounting firm) survey of 100 technology CFOs revealed a pretty dour view on technology companies’ prospects for 2009. While most early stage (seed and series A stage startups) investors’ companies probably don’t even have full time CFOs, the attitudes of larger technology companies’ CFOs are quite telling.
Some pretty obvious findings, including a prediction in a drop in revenues for 2009. Others, such as the aggressive steps already taken to reduce head count are a bit more shocking:
As a response to the financial crisis, almost two-thirds (61%) of CFOs state that their company has restructured operations, including reducing their workforce.
Wow! What does this mean for the technology startup entrepreneur? That there is talent out there! Engineers without jobs, and also technologists + sales people within large organizations not feeling great about their current position…
February 5th, 2009 at 8:25 pm
I think as CFOs we're paid to be professionally skeptical at all times good or bad. So, no surprise that the mood is dour now. As startups, our 1st and largest market is the U.S. And as one of the more cyclical industries, we are completely dependent on the recovery of that market. Discretionary spending of all kinds is being put on hold. Big, ambitious projects are on hold too.
If Microsoft, with > $20B cash and equivalents needs to downsize, chances are the rest of will be doing the same.
At Tungle, I am pleased that we just closed financing and had no fat to trim to begin with. Lean and mean all the way.
Finally, I do think there is more need than ever for startups to have finance expertise, through either advisors or part time CFOs that are experienced in the venture and startup Worlds.
February 5th, 2009 at 9:11 pm
Mark, every startup needs some financial help, and all of our companies that do not have a full time CFO or VP Finance use solid outsourced CFO teams to help them keep the wheels from coming off!