Multipreneur vs bootstrapping vs raising venture

Levers to boost gross margins

Author

Michael Morgenstern
August 13, 2024

Happy Tuesday Brex community,

How long does it take to grow when you’re bootstrapped? The journey can be significantly longer compared to taking the route of seeking venture capital. According to Hampton's recent report, VC-backed companies typically reach $1M ARR in just 2.8 years, while bootstrapped companies take around 4.2 years. However, this faster growth often comes at the cost of lower gross profit margins.

Every founder needs to focus on boosting gross margins as a key growth lever. Companies with margins around 40% should aggressively adopt AI and automation to reach the 75%+ benchmark that defined the previous SaaS wave. Tech-enabled services, traditionally burdened by low margins, are now enhancing their financial profiles through AI-driven efficiencies—an essential trend to follow closely.

Balancing rapid growth with sustainable profitability is a must for long-term success. Check the Brex Marketplace for AI tools and discounts that can drive higher margins and future-proof your business. If you're building AI solutions that can help companies save money, send me what you're working on!

Growing together, Michael Morgenstern

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Rillet co-founders are Nicolas Kopp and Stelios Modes

Rillet is an automation-focused accounting platform for SaaS and usage companies with pains around revenue recognition and multi-entity consolidation. Rillet can automate 93% of all manual journal entries and invoicing workflows and provides key investor metrics instantly. See tech stack survey, happy customers and G2 reviews.

Ambassador's perspective: Building a new General Ledger from the ground up is notoriously hard, Rillet's cracked the code and built a fully featured, AI-native system used by over 70 companies and accounting firms to date. Their approach has the opportunity to change one of the largest software categories in the world (the ERP) and we're excited to see how they continue blending AI and accounting to make the zero day close a reality. After raising $13.5M led by First Round and Creandum, we are watching, cheering, and partnering closely!

Flourish is a global venture capital firm with purpose, investing in mission-driven fintech entrepreneurs and industry influencers working toward a fair financial system. With $850M in patient capital under management, the early-stage firm invests in companies across the U.S., Africa, Southeast Asia, India and Latin America.

Flourish's fintech portfolio includes Chime, Flutterwave, Unit, ShopUp, Kin, Neon, Fair Money, M2P, Qoala, and Alloy, among other high-growth companies. The firm also collaborates with ecosystem leaders to advance ongoing improvements in the financial system. 

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Don’t hesitate to reach out,🦾!