About This Episode

In this insightful discussion, Patric and Shub dive deep into the concept of working capital and its importance in construction tech businesses. They explore how understanding and optimizing yield on working capital can be a game-changer for companies, particularly in managed marketplaces, fintech, and outcome-as-a-service models within the AECS sector.

In This Episode

Working capital fundamentals: Understanding the technical definition and practical implications of working capital in construction tech businesses

Yield on working capital formula: Breaking down how to calculate and benchmark working capital efficiency across different business models

Real-world benchmarks from fintech and managed marketplace companies, with examples showing yields ranging from 25% to over 140%

The banking mindset: Why construction tech companies handling working capital need to think like financial institutions to optimize their operations

Timestamps

(00:00) - Introduction

(03:25) - Defining working capital and its components

(06:06) - Understanding yield on working capital

(15:58) - Benchmarking different business models

(27:36) - Case study of successful fintech company

(35:46) - Analysis of managed marketplaces

(44:00) - Advanced working capital strategies

(52:13) - Conclusion and wrap-up

Resources or Companies Mentioned

Floating Point: Investment firm focusing on technology companies becoming financial services businesses

Connect With Us

Practical Nerds Website: https://practicalnerds.com/

Subscribe to the Newsletter: https://www.linkedin.com/newsletters/practical-nerds-7180899738613882881/

Foundamental: https://www.foundamental.com/

Patric Hellermann: https://www.linkedin.com/in/aecvc/

Shub Bhattacharya: https://www.linkedin.com/in/shubhankar-bhattacharya-a1063a3/

#ConstructionTech #WorkingCapital #VentureCapital