It’s crazy how the tiniest alterations can end up changing something entirely. One too many teaspoons of salt ruins a recipe. One misplaced letter in code and the whole computer program can fail.
For Rami Essaid, one mis-entered formula in Excel caused him to double-count the amount of money that his previous security start-up, Distil, had. That ultimately forced him to lay off a third of his staff, raise a down round, and spend a year recovering before he got back on his feet.
Distil was eventually acquired by Imperva in 2019. Soon afterward Essaid set out to begin his next startup, Finmark, this April with the mission of helping entrepreneurs like himself build strong and accurate financial models so they can avoid a setback like he had at Distil.
“If I had Finmark when I was running Distil,” Essaid said, “I don’t think we would’ve had that same stumble and we would have been in much better shape and been able to ride that momentum we were building.”
Finmark’s momentum reached a new peak yesterday with the closing of a $5M seed round led by Durham’s IDEA Fund Partners, along with Bessemer Venture Partners and Draper Associates.
The wheels for Finmark started turning just as everyone started working from home earlier this year, so while many Finmark team members live in Raleigh, Essaid has been in Arlington, Va. Although Essaid anticipates moving to Raleigh eventually, he plans to keep Finmark a remote-first company.
Working remotely hasn’t slowed down the team any. In less than six months, Finmark has already participated in the prestigious Y Combinator accelerator and enrolled hundreds of customers on its platform. Essaid said that being in Y Combinator gave them access to several potential customers, many of whom were selected to be beta testers starting in July.
That was more than enough for IDEA Fund—which was also the first investor in Distil—to get back in the Essaid-backing business. Essaid also serves as a part-time venture partner for IDEA Fund.
“I had an amazing relationship with them and I trusted them,” Essaid said. “So when I was starting Finmark, I went to them first and they were immediately in.”
Lister Delgado, Managing Partner for IDEA Fund, said he has known Essaid for more than a decade and trusts him to take Finmark to great heights.
“I have seen him in action and I think he is a great startup CEO,” Delgado said. “He is not only a great visionary CEO, but he is also charismatic and relentless. I know and trust this team and I am excited to be working with them.”
As a fund manager trying to understand his own portfolio and as someone who deals with startups, Delgado said he lives through the problem Finmark is tackling, and believes Finmark has a big opportunity to capture the market because there are no good solutions out there yet.
Instead of building financial models from scratch, Finmark takes out the guesswork and labor by using preset, tried-and-true algorithms.
Finmark’s customers—which are mostly software and subscription-based businesses right now— just have to enter their information and they can instantly see SaaS metrics such as customer churn rate, customer acquisition costs, retention rate and growth rate, as well as other key financial benchmarks such as runway, cash flow, optimal hiring plans, and fundraising goals.
Essaid didn’t want price to be a barrier for whether or not a startup decides to use Finmark. That’s why the initial price for startups is minimal, then increases as the company grows and relies more on Finmark as their financial planning becomes more complex.
“I think too many founders don’t keep an eye on their finances at an early stage, and we don’t want to have price be a reason that they don’t use us and that they don’t understand their finances,” Essaid said.
If you’re thinking to yourself, “haven’t other companies tried this before?” you’re right, but Essaid said none of them have achieved significant market traction yet or fully solved the problem. Case in point: everyone still uses Excel.
“The reason for that is most people who have tried to solve this problem are just trying to build a better Excel, whereas I’m trying to build a new way of doing it,” Essaid said. “Finmark is less about building a new version of Excel online, and more about building a simpler-to-use software, akin to TurboTax.”
Since September, Finmark has been slowly letting customers off of its waitlist. The Finmark team is observing and recording data on how current customers interact with the platform, and by the middle of next year, Essaid’s goal is to have that benchmark data completed.
Many of Finmark’s current customers are small and medium-sized venture-backed businesses (about $500M or under in revenue). By Q1 of next year, Essaid hopes to have the features suitable for more mature companies and startups at later stages of growth.
“Our goal is to support companies at every stage in the entire venture-backed ecosystem,” Essaid said.