Mike Gonnerman, Inc.  Financial Management for High Tech Companies
  


Mike’s monthly financial newsletter (“Ask Mike”) answered tough questions about how to manage corporate cash. A trusted advisor to technology CEOs and investors, Mike is well known for his pragmatic, candid solutions to liquidity and cash management problems. Below are the 275 questions he answers in his book "Ask Mike".

Boardroom Behavior

  • Do I really need a board of directors?
  • Should angel investors collect board fees?
  • Can the board ignore committee recommendations?
  • How do I know if my company is playing fair?
  • Am I just a rubber stamp?
  • How do I tell when accounting is "conservative"?
  • How should our board set the CEO's pay?
  • What's a fair cash payment for an advisory board?
  • Why isn't my board more strategic?
  • Why is the board bored?
  • Who does a board member represent?
  • Are payments in stock taxable?
  • How can I eliminate a useless board?
  • Is the board entitled to micro-manage?
  • Is it ok to have a weak audit committee?
  • How do I lure top-quality directors onto my board?
  • How do I break bad news?
  • How can I spot a successful CEO?
  • Am I entitled to time on the board's agenda?
  • Should the CEO keep asking for my help?
  • Is an advisory board member liable for damages?
  • Can I fire a disruptive director?
  • What can I do if the board is oblivious?
  • How can I meet customers?

Your Friendly (?) Banker

  • What will make my bank happy?
  • Why can't we find a banker who will stick around?
  • How can I negotiate a loan repayment?
  • What can I use for loan collateral?
  • Why does my personal credit matter?
  • Am I being overcharged on interest?
  • What happens when a partner goes bankrupt?
  • Why do we need equity on our balance sheet?
  • How can we clear checks faster?
  • Can I use growth funds to pay old bills?
  • What's "Hairball Lending"?

Living With Partners & Investors

  • Do I have to tell investors everything?
  • How can we get rid of an inactive partner?
  • Can I object to corporate donations?
  • What happens if we can't agree about priorities?
  • How can we attract small investors?
  • Should we discuss our cost of capital?
  • Should I pay commissions to a VC group?
  • What's wrong with royalty-based financing?
  • Debt or equity?
  • What if we can't afford first-class advisors?
  • How do I measure dilution?
  • How do investors feel about high-living managers?
  • Can my VCs force a premature sale?
  • Will a past bankruptcy matter in an IPO?
  • Who picks the investment banker?
  • Can a majority shareholder dilute everyone else?
  • Will new investors give me some cash?
  • How many VCs should we pitch?
  • Is it okay to raise money with a temporary COO?
  • Should we warn new investors about bad news?
  • How can I reduce the risk of nuisance suits?
  • Is it safe to sell stock with first-refusal rights?
  • How should a startup price its stock?
  • Is a two-year non-compete too long?
  • Do business plan awards mean anything?
  • Should I have a plan for failure?
  • How can I organize investor documents?
  • Should I pull the plug on non-responsive investors?

The Founder's Perspective

  • What's my equity worth?
  • Do investors want me to put my own money at risk?
  • How much founders’ stock do I deserve?
  • Did I forget something important?
  • Was I diluted or deluded?
  • Can I license my intangible assets to a new firm?
  • What questions are off limits to investors?
  • How can I hang onto full-vested employees?
  • What if a business school case is untrue?

Accountants & Other Odd Characters

  • How much time should it take to close my books?
  • What's better – a CPA or an MBA?
  • Are my controller's mistakes normal?
  • Can I refuse non-financial assignments?
  • Should I promote my controller?
  • What can we do about an inept volunteer CFO?
  • Why do I keep losing accountants?
  • Can I pay my CFO a commission?
  • Can we hire a cheaper audit firm?
  • How can I tone down my CFO's optimism?
  • Should my CFO talk to unhappy customers?
  • How can I kill useless reports?
  • What happens when my CFO is hospitalized?
  • Does motivation matter?
  • How can I get job security at a startup?
  • What talent should I look for in a would-be CFO?
  • Do I have to replace my CFO?
  • What's a SAS 70 review?
  • How can I replace my controller painlessly?
  • Should I take a personality test?
  • What if my auditor missed fraudulent payments?

When Money is Tight

  • Who gets paid first?
  • How do I make a nagging creditor stop calling?
  • Who should I save during a layoff?
  • Can we prevent a summer slump?
  • What financial disasters could wreck our business?
  • How can I protect myself from supply chain failures?
  • How secure is my health insurance?
  • What can I do about ugly rumors?
  • What's my liability on a company credit card?

Crunching The Numbers

  • What's my burn rate?
  • How much detail should we show investors?
  • How many sets of books should we keep?
  • How can I calculate ROI for insurance?
  • What's a credible way to figure ROI?
  • Should I shoot down a bogus ROI calculation?
  • Can I trust amortization schedules?
  • How do we test our accounting software?
  • How do I figure interest rates on leases?
  • Can we avoid a big inventory write down?
  • Do we have COGS costs for subscription services?
  • How can I prevent spreadsheet errors?
  • How do I handle the finances of a grant?
  • How do I handle paper losses on real estate?
  • How can we clean up non-standard financials?
  • Are we calculating "completion" correctly?
  • Are frequent flyer miles a tangible asset?
  • Who owns "loaned" inventory?
  • Are late fees and penalties deductible expenses?
  • What kind of 'overhead' can we charge?
  • Do I have to pro-rate maintenance agreements?
  • Should we reconcile our books to the last penny?

Payroll Perils

  • How should I deal with salary disparities?
  • How should we interpret salary survey data?
  • How does phantom stock work?
  • Should we give our part-timers a raise?
  • Do I have to pay severance pay?
  • Do I really owe the IRS money?
  • Should I offer a declining bonus?
  • How should we accrue vacation pay?
  • Should my developers pay out-of-state taxes?
  • How should we set partnership salaries?
  • Should we give options to rank-and-file staff?
  • How can I stop paying an annual bonus?
  • How should I pay my business development rep?
  • Oops. How do I fix incorrectly calculated bonuses?
  • Are we supposed to pay interns?
  • Why would anyone work for a sub-par salary?
  • How do I deal with a misguided bonus plan?
  • How can I get tax information from a freelancer?
  • Should I help an employee with a divorce problem?
  • How can I value phantom stock?
  • What do employee benefits really cost?
  • Should I run a credit check on veteran employees?
  • How should I deal with a payroll emergency?
  • What's a 'day's work'?
  • Should we bother with performance reviews?
  • How can I recapture excessive options?
  • Can we make exceptions to the employee handbook?

The Chain of Command

  • Who's my boss?
  • Should I respect the chain of command?
  • How can I delegate setting up a new business?
  • Who should sign checks?
  • How do I deal with a know-it-all boss?
  • Should I blow the whistle on a cheating boss?
  • What happens if my CEO is too injured to work?

Keeping An Eye On The Cash

  • What's the rule for keeping a cash reserve?
  • How do we manage fluctuating cash balances?
  • How aggressive should I be with invested cash?
  • What should we do with a windfall?
  • How can I prevent repayment of company debt?
  • Can I pay a spinoff company's bills?
  • Can I recover escalated travel costs?
  • Who should take the risk on exchange rates?
  • How do I verify a consultant's invoice?
  • Can I retrieve a misdirected payment?
  • Is it risky to work with a delisted public company?
  • Is my bookkeeping service trustworthy?
  • How can I rein in unbudgeted expenses?

Where the Money Comes From

  • What can I do about a slow-paying customer?
  • How do I know if customers are profitable?
  • Can a client refuse to pay a cost overrun?
  • Should I let a client run a tab?
  • How can I get paid for emergency support?
  • Should we 'lend' money to bid on a big deal?
  • How should we structure an OEM license?
  • How can we minimize contract changes?
  • Is it safe to give credit to a one-client customer?
  • How can I protect myself if a buyer defaults?
  • How can I audit a customer's royalty payments?
  • Who controls payment terms?
  • Why is my sales manager protecting deadbeats?
  • Can we write off a government-backed receivable?

The Care and Feeding of Sales Reps

  • Should I standardize my sales comp plan?
  • Can I recover a draw against commissions?
  • Is a commission override reasonable?
  • How should we handle commissions on refunds?
  • Is there a good incentive for selling services?
  • How about deals where customers can back out?
  • What's the hidden cost of extended payment terms?
  • What does 'a month's pay' mean?
  • How can I get my sales reps to work in the summer?
  • How do I calculate reasonable sales quotas?
  • How can we avoid discount demands?
  • How can I grow my aftermarket sales?
  • Why does it take so long for a sales rep to become productive?

Looking Backwards: Benchmarks and Metrics

  • What does a high payables ratio indicate?
  • Should I disclose my financials to D & B?
  • How should we set up our cost categories?
  • How do public companies report their G&A costs?
  • What are the right metrics for services?
  • How should I benchmark DSO on maintenance?
  • Can I use tax financials for internal reporting?
  • How should we allocate indirect overhead sots?
  • How can we quantify future stock option expenses?
  • What's the best format for expense projections?

Revenue Recognition & Money Mysteries

  • When should we recognize cash revenue?
  • What are my intangible assets worth?
  • What's the value of dusty inventory?
  • How do I book receivables billed in advance?
  • Should non-profits open their books?
  • Is a 'forgiven debt' taxable?
  • Is a gift of equity a taxable transaction?
  • Am I at risk from 'claw-back' rules?
  • Are credit card receipts part of my cash balance?
  • What does CAGR stand for?
  • Who gets the R&D tax credit?

Gazing Into The Crystal Ball  — Budgets & Forecasts

  • Do business plan forecasts mean anything?
  • How do I develop a financial forecast for investors?
  • How do we make our forecasts less random?
  • When should I update our plan?
  • What's the right model for calculating lifetime value?
  • How can I teach employees the value of money?
  • How do we budget based on revenue percentages?
  • How do we tell if our projects are really profitable?
  • Should we kill an out-of-control project?
  • Why am I losing money on fixed-price services?
  • Is it safe to sell fixed-price services contracts?
  • Should I create a fantasy budget?
  • Should my forecast include a balance sheet?
  • How do I make a forecast without data?
  • What issues should a forecasting model cover?
  • Can I buy insurance against surprise business risks?
  • How can I shorten our budget cycle?
  • Why is our business so volatile?
  • How do I create a worst case scenario?

Managing Expenses

  • Should I pay for parking tickets?
  • Should we pay consultants for their travel time?
  • Is there a way to deal with late expense reports?
  • Should I pay commissions to our purchasing agents?
  • How can we keep our office rent under control?
  • How do I explain the concept of profits?
  • What costs can I cut without controversy?
  • How do I find out what insurance I really need?
  • How should we figure a performance penalty?
  • Do we have to pay a long-delayed invoice?
  • What happens when a vendor's sales rep lies?
  • Why aren't we as efficient as an outsourcer?
  • Is there a way to get everyone to share tight times?
  • How do I self-insure?
  • How do we ramp up our staffing in a hurry?
  • How do we price stock we trade for services?

Graceful Exits

  • How do I optimize my company's value?
  • How do I avoid pre-sale gossip?
  • What's a zero-revenue company worth?
  • Do you recommend a sale of assets?
  • How do we value a customer list?
  • Is it ethical to leave a company that' being sold?
  • Will my salary dilute an acquirer's EPS?
  • Can I prevent a buyer from stealing my employees?
  • Can a seller solicit competing M&A bids?
  • How do I persuade a buyer to invest in growth?
  • What if my buyer is lazy about receivables?
  • How do we pay off missing shareholders?
  • Do buyers have to honor a seller's promises?
  • Do I have to hire an M&A specialist?
  • Can a buyer use my escrow to pay surprise claims?
  • What's a fair valuation formula?
  • Am I liable for taxes on a deal made with stock?
  • What happens if an acquired company goes broke?
  • Does anyone do background checks for M&A deals?
  • How do I show the asset value of a user group?
  • How do I close down my corporation?