Sector of demonstrated depth
Profitable AI-Native & Vertical Software
Profitable software companies need finance leadership that understands both the model and the math: AI-COGS, contribution margins, Rule-of-40 discipline, and the operator playbook that turns ARR growth into free cash flow. Catalyst pairs a senior CFO with AI-native finance operations since 2020 and three founded companies, two of them AI ventures, for $5M-$75M companies past the burn stage, where the question is no longer "can we raise?" but "are we compounding?"
Where it usually hurts
You’re probably here because…
Your AI-COGS (inference, vector storage, model serving) is eating 30-40% of gross margin and finance still treats it as a single black-box line item.
You're profitable but unit economics aren't being re-cut as new model versions ship — and the board pack still treats ARR as the only number that matters.
You need a CFO who can talk model economics with engineering, capital strategy with the board, and AI-OpEx with sponsor operating partners — not someone who learned the word "AI" in 2024.
How we engage inside this sector
The Catalyst playbook for Profitable AI-Native & Vertical Software
AI-cost economics + unit margins
Build the contribution-margin view that includes inference, vector storage, and model serving — then attack it. Catalyst has been running this analysis since before it had a name.
Rule-of-40 and free-cash-flow discipline
Quarterly Rule-of-40 walk, a working-capital model that distinguishes growth investment from operating drag, and sponsor-grade reporting that holds up at the board table and during an exit process.
Operator-CFO with embedded AI in the practice
Catalyst's own bookkeeping, FP&A, and reporting workflows run on AI — so the CFO advising you is using the same discipline they're recommending.
Outcomes you can expect
- AI-COGS tracked and managed as a first-class KPI
- Rule-of-40 discipline maintained as model + product investment scales
- A CFO who builds AI-driven finance, not just talks about it
Anti-commoditization
How to vet anyone you talk to in this sector
| Metric | Industry Red Flag | Catalyst CFO Advisors |
|---|---|---|
| Years in Finance Leadership | 5 - 10 years; often an ex junior or non-exec finance FTE | 25+ years across Wall Street, asset management, and CFO/COO seats since 1999 |
| AI & Automation Depth | "We use ChatGPT" — no track record building or running AI in production | AI in finance ops since 2020; venture work spans AI compliance, healthcare/telehealth, AI scheduling, and the AI/automation practice inside Catalyst |
| Founder-Operator Experience | Zero — first-time fractional, never sat in the exec seat | 12+ years running Catalyst plus CFO/finance leadership at venture-backed, PE-sponsored, and privately funded companies across multiple industries |
| Capital Raised & Deployed | Has only modeled or advised — never closed a round | >$25M secured for SMB clients; institutional Series A and strategic capital across multiple ventures |
| Wall Street Pedigree | No institutional or capital markets experience | Partner at a boutique institutional equity asset manager; helped grow firm AUM from $3B to $15B; sell-side equity research at global bank franchises |
| CFO + COO Scope | Lacks senior finance experience, little or no operational experience | Both functions; packaged as Part-Time CFO, Part-Time COO, Interim CFO, and Interim COO |
| Crisis Leadership | Has not led through a market collapse, bank failure, or cyber attack | Macro (since 1999): recessions, the GFC, COVID-era disruption, inflation/rate cycles, banking-system stress. Company-specific: cyber attacks, liquidity strain, and national payments-infrastructure outages |
| Time-to-Value | Weeks of "discovery" before producing anything useful | Two-week onramp; first operating model in days; close cycle reduced from 15 to <3 days at clients |
| One-Sided Commitment | Tries to lock into 6–12 month engagements | All CCA contracts are month-to-month — if we don't produce ROI, we don't get paid. |
Other sectors of demonstrated depth
Founder-Led Lower Middle Market
$5M-$75M owner-operated companies (sweet spot $15M-$45M) bridging from gut-feel to systems-driven decisions.
Explore the sectorSponsor-Backed Companies & Portfolios
Independent sponsors, search funds, family offices, and LMM PE platforms — interim, embedded, and add-on integration finance leadership.
Explore the sectorProfessional Services Firms
Agencies, consultancies, MSOs, and design firms where utilization and realization decide profit.
Explore the sectorWhat's the right next step for Profitable AI-Native & Vertical Software?
Start with a quick self-assessment, grab a practical resource, or book a call when you are ready to talk.
Or explore a lower-commitment path