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A story of how Kordis’ fractional CFO team helped a fast-growing wellness brand clean up its finances, build investor trust, and raise $5M in seed funding.
A fast-growing wellness brand with locations in New York and Los Angeles had decided it was time to expand. Their vision was to bring its innovative approach to self-care to more cities across the U.S.
The problem was that their financials were a black hole. Their accounts had never been reconciled and they had no reliable data to build projections on. What they did have was a CRM full of “active” members that weren’t really active, because their payments weren’t actually being collected.
That’s when the business contacted Kordis. Our fractional CFOs not only transformed the mess into a credible investor story that helped them raise $5 million in seed funding, but they did it within weeks.
The wellness brand had grown fast. They had two locations, their business had traction, brand equity, and a loyal customer base. But the financial structure had never been taken care of in order to scale the operations.
The company’s QuickBooks was empty. They had no reconciled data, and their transactions weren’t categorized properly. Payroll, PPP loans, and basic accounting hygiene were overlooked. We found that even PPP loan forgiveness was recorded as revenue, artificially inflating topline numbers.
The company was relying on the CRM, MindBody, to track membership revenue but many members had expired or canceled cards, so the payments weren’t going through. Their CRM showed growth, but the bank account didn't. In short, the company was making decisions based on flawed numbers.
It wasn’t that the leadership team wasn’t capable. Many founders focus on brand, experience, and expansion and trust others to handle the financial side, and this happened to the wellness company.
It was when the COO began preparing for a major capital raise, that they realized that they needed major financial reconstruction.
We received the mission of establishing a trustworthy financial model which investors could believe in, even though historical records were incomplete.
They needed the model right away, so we didn’t have time to clean-up their books and solve previous errors, so we chose to focus on creating a reliable forecast through real unit economics.
Our fractional CFOs and the brand’s COO worked together during two busy weekends to develop a detailed financial model which presented the business operations at a precise level. The team developed detailed financial models for all services including memberships and IV drips and individual products by using occupancy rates, pricing models and seasonal patterns.
We established product line economics, margin projections, growth forecasts through a sequence of quantifiable drivers. Our team invested a lot of time into creating financial models in detail, and it was worth it.
During the model development process, we started fixing the brand's revenue collection system which was leaking cash. Their system, MindBody, kept listing members' status as active even when payments failed, so they had a lot of non-paying members.
Our fractional CFO team implemented three essential systems, with the COO, to solve the problem: credit card expiry alerts, automated notifications, and front-desk procedures to update payment methods and decline management.
The effect was immediate. Within weeks, the brand could finally see its real monthly recurring revenue (MRR). And that new revenue visibility transformed both investor confidence and internal decision-making.
With a reliable model, real data, and a clear understanding of the business operations, the brand was ready for funding.
The model was praised by the potential investors, including a family office managing capital for Jay-Z and other high-profile backers. This credibility enabled the brand to secure funding which would go towards opening their 3rd location.
Our team developed an investor-friendly story which emphasized three essential points:
1. The business achieved stable recurring revenue because members stayed loyal and the company maintained strong retention rates. After fixing payment collection issues, they also had a predictable cash flow.
2. The four-wall wellness business model produces high fixed costs yet generates substantial gross margins. The EBITDA profit from each new member acquisition and sales increase becomes almost entirely available for the business.
3. The model demonstrated both current business performance and the ability to duplicate financial results through new location expansion.
The investors found the presentation compelling. The wellness brand secured $5 million in seed funding to launch new markets. Imagine that we only had a single month of reconciled historicals when we first arrived!
After the raise, we didn’t stop. Our team maintained the work with the brand to rebuild their accounting records. We classified more than 8,000 transactions in QuickBooks, recorded PPP treatment and set a monthly close procedure to prevent having the same issues again.
In our engagement with the business, we helped them not only by raising money but also by building the structure to support their operation. The leadership team gained real-time access to performance data (from utilization to LTV metrics, from gross margin to cash burn) to make decisions based on accurate information.
We see stories like the wellness brand very often. Fast-growing companies, especially in service industries, build incredible brands long before they have their financial systems in place. But when the time comes to raise capital, they need to make sense of their numbers.
Our team delivered more than basic spreadsheet work. We provided financial translation; we turned a business story into friendly numerical data that investors could trust and easily access via our proprietary software platform.
Fundraising success depends on investors actually believing in the company. The wellness brand already had top-notch facilities, loyal members and strong product offerings. We gave them the financial credibility to back their performance.
The initial review of financial records made it seem impossible to secure funding. But, our team developed a financial model which attracted experienced investors to support business expansion through scalable growth.
That’s what our team of fractional CFOs do. At Kordis, we create clarity from what’s available, build discipline where there’s chaos, and turn the unknown into a story that raises real money.
