nobody funds a shade of red... how to quantify your value for a cfo

on the show this week a founder described a meeting every enterprise seller has sat through.

a board gets handed a heat map. red, yellow, green. the risk people are proud of it. and someone at the table asks the only question that matters.

"you're giving me a heat map that shows me red, yellow, green. what does that mean? ... what does that mean to the bottom line?"

he started his risk firm in 2002. the patent on his method came through in 2010. the company is twenty four years old and raising its first outside round.

his example was simple. tell a board to invest a million dollars because a risk is red, and they nod and move on. tell them to invest a million on cyber or face a twenty million dollar hit next year, and the room goes quiet.

same risk. same million. one is a colour and the other is a number in their own ledger.

if you're wondering how to quantify your value proposition for a cfo, that's most of the answer. stop describing your value in your words. translate it into a line on their books.

he told a story about a division that had been losing money for ten years... a fifteen million dollar operating loss. they ran his method and found something awkward. the ceo's top five risks weren't even in the top thirty named by the leaders of its fifteen countries. the people at the top and the people running the business were worried about different things.

they retooled around the seven risks that carried real dollar figures. by his account, twelve months later the fifteen million loss was a fifteen million profit.

that's his claim, and i'll let him own it. but the shape of it is what matters for you.

because founders pitch in colours all the time. great traction. strong pipeline. huge market. customers love us. that's a heat map. red, yellow, green, with nothing a cfo can put in a spreadsheet.

and the people you most need are the ones who live in spreadsheets. he said his deals only move when he gets to the cfo, the chief risk officer or the head of legal. his sales cycle runs about four months. nobody in that chain buys a feeling.

investors are the same. they don't fund a shade of red. they fund a number they can defend to their partners on monday.

the part i respected most was his confession.

"i fell into a trap. of reacting to squeaky wheels. rather than looking for the hidden things within the engine of my company."

the man who built a career on quantifying hidden risk let the loudest problems run his own company. that isn't a knock on him. it's the most human thing in the world. the squeaky wheel always sounds like the biggest one.

so he's doing what he tells his clients to do. he named his markers in plain numbers. a million in new bookings by the end of the first quarter. a sales team going from two people to ten once the round closes. that's a founder speaking in the investor's ledger.

and he said one more line that stuck with me.

"we had to wait 20 years for our time. that's basically what it's been."

twenty years for the market to catch up to a method. long term, the founders who make it through that kind of wait are the ones who keep translating... their value, their risk, their progress... into the other person's numbers, again and again, until the world is ready.

if you want to see what your own story looks like through an investor's eyes before you walk in, get your deck torn down before someone across the table does it for you.

so look at your last pitch. how much of it was a colour... and how much was a number they could take to their own board?