Monday, January 27, 2020

Secrets Of The Startup CFO: How To Be A High-Growth Company’s First Finance Leader

Source: https://tinyurl.com/urhm4hp

Written by:  Jeff ThomsonSenior Contributor CFO Network - I write about CFO insights.

PlayVS, a platform for high school students competing in e-sports, was launched in January 2018 and Gabi Loeb has been CFO since January 2019. That makes him this startup’s first ever CFO, and in this interview, I ask Loeb crucial questions about the challenges of being an inaugural finance leader, from having to “wear many hats” in operations and human resources to ensuring continuous cash flow through skillful investor relations.


PlayVS CFO Gabi LoebPLAYVS

Jeff Thomson: The CFO of a startup typically covers more ground than the finance executive of a larger enterprise. Often the CFO is also the Chief Operating Officer (COO), in practice if not name. What are the challenges a finance professional faces when they must also manage the operations of a complex organization – especially one that is growing as widely and rapidly as PlayVS – and work closely as a conduit between the CEO and the rest of the organization?

Gabi Loeb: I think the biggest challenge for a CFO coming into a Chief “Everything Else” Officer role is the ability to wear different hats while maintaining the same overall focus on the company’s goals and mission. Generally, the CEO needs to focus on product, go-to-market, fundraising/investor relations and talent acquisition. I consider it my job as CFO to support those efforts in any way necessary and to help make the best decisions possible along the way. As such, the “conduit” between the CEO and the rest of the organization changes depending on the hat worn. I’ve found that the most effective way to manage this is to be clear about what hat I’m wearing in each situation and being true to that role. If we have clarity about overall company goals, then all the conversations and decisions I make with my finance, accounting, HR, legal or facilities’ hats on should all lead us closer to those goals.

Thomson: Does this divert from the traditional skills and training of a finance professional and require a new outlook? Loeb: It does divert from traditional finance training and skills, which I think has been incredibly beneficial to me for two reasons. First, for me to be effective outside the “traditional” role, it means needing to manage, collaborate and learn from amazing talent in key functional areas outside my areas of expertise. Second, understanding multiple perspectives on key issues has ultimately made me far more strategic, decisive and flexible – all of which are critical skills for leaders in a startup environment.

Thomson: PlayVS has grown from having 16 employees at the end of 2018 to 41 as of September 2019 and plans to have twice as many before the end of the year. As a startup expands and you become responsible for assembling its finance team, how do you put on your “HR hat” and act in a different capacity from the finance function that you were trained for? 

Loeb: For me, that part isn’t hard per se – it’s just keeping that balance of the perspectives that I mentioned earlier. Fundamentally, business success will come from the group of talent we employ, so acting in an HR capacity (vs. a strictly financial role) gives me a much broader perspective on how we’re making progress toward our company-wide goals. Furthermore, I see the role of a startup CFO to be creating the structure, processes, systems and culture for quick, decisive action and accountability from a financial perspective. The HR function should, ideally, be similar, but from a “people-first” point of view. As we scale, we’ll bring in HR leadership to take us to the next level.

Thomson: What skills do you look for in hiring finance staff? What competencies and qualities make for good finance professionals in a startup as opposed to a more traditional company?

Loeb: Hunger to succeed, self-sufficiency, pride in ownership, deep domain expertise and the ability and desire to wear lots of hats successfully make for good finance professionals. Finance professionals in a startup are often a hub for the information, processes and analysis for decision making. So, having an interest in business operations and the ability to take a broad – and flexible approach to those operations is an important trait. They should also have an ability to be collaborative within the team and across the organization to allow things to move quickly. I know most people don’t think finance and accounting professionals need to have a high EQ (emotional quotient, i.e. emotional intelligence), but the ability to interact with and empathize with other people can help the organization make smart decisions faster, so it’s an important trait from my perspective.

Thomson: PlayVS has raised $96 million from venture capitalists in just 15 months. As CFO, how do you approach financial planning, analysis and reporting when you must answer to so many investors with a direct, sizable stake in the company?

Loeb: Ultimately, we have to grow and we have to generate revenue and positive cash flow. Our investors have placed a lot of capital in our care and they want it to be deployed in a strategic way that creates value. We have a massive opportunity in front of us, but we’re still early in our journey. So right now the most important thing is providing regular, transparent updates to our investor group about where we are, what success we’re seeing and where we see challenges that they can help us overcome.

This article has been edited and condensed.

Friday, January 24, 2020

'Persuader,' 'strategist' roles to lead finance departments in 2020


Source: https://tinyurl.com/tp6agz6

Corporate finance departments are experiencing a "skills gap" predicted to grow in 2020, according to research from Gartner Finance. These competencies, grouped into five categories, can help finance teams thrive in 2020 and beyond.​

The survey, based on information gathered from more than 1,000 finance employees, helped Gartner sort these competencies into categories, which they call personas, to help CFOs and finance leaders understand their departments' strengths and weaknesses. These five personality types are: builder, doer, learner, persuader and strategist.


Some skills, such as those relating to functional expertise, are well-covered, and are less likely to be in high demand in the future, Gartner said. But skills relating to IT fulfillment and finance analytics are in increasing demand.

"Although it’s probably no surprise to most finance leaders that technical skills relating to data analytics, IT fulfillment and IT innovation are in short supply, it’s not time to be complacent," said Melanie O’Brien, vice president at Gartner Finance. "Finance leaders should review the competencies of their current teams to understand what personas they have and where they need to build capability for the future."

While the five personas Gartner describes may not apply to all finance departments, "they do provide a template for finance leaders to think about what types of people and skills they will need in the future, and compare that to what they have available now," O’Brien said. "This lays the groundwork for building the finance function of the future."

The more pronounced these skill gaps become, the harder the impact will be to mitigate, O'Brien said.

 


The five personas

Builder

Skilled in business navigation, cross-cultural awareness, social intelligence and virtual collaboration, with an understanding of the nuances that drive the engagement of different groups (e.g., millennials and Gen Z).

Doer

Cross-functional expertise and the ability to exercise good judgment while exhibiting grit and resilience. Can balance timeliness with good decision-making. Talented project managers, able to delegate effectively and balance multiple responsibilities.

Learner

Agile, adaptable and confident, with a propensity toward entrepreneurship by suggesting changes in the department and understanding the risks and probabilities of success.

Persuader

Fluent with multiple business functions,able to find meaningful insights from data analytics and KPIs. Understands evidence structuring and builds a comprehensive body of evidence when creating insights and solutions.

Strategist


Excels at business coordination, IT and vendor management. Easily connects finance’s multiyear plan to business objectives and can suggest useful system modifications. Can build mutually beneficial relationships with IT vendors and maintain the kind of finance IT know-how that allows for vendor contract negotiation based on cost-benefit analysis.

Wednesday, January 15, 2020

New Fundbox CFO a 'Swiss Army Knife' of expertise




Dive Brief:
  • B2B payments and credit network Fundbox named Marten Abrahamsen CFO, the company announced Tuesday. The company just completed $176 million in Series C funding.​
  • Abrahamsen is the newest addition to Fundbox’s executive team. He joins Leslie Olsen as chief marketing officer, Allison Wirth as chief compliance officer, and Todd Hamblet as chief legal officer and corporate secretary.
  • Abrahamsen “brings a whole new level of financial knowledge and industry expertise [to Fundbox],” founder and CEO Eyal Shinar said in a statement. The company helps clients access funds owed them. A 2019 study found $3.1 trillion in capital is owed to U.S. companies, but is locked up in accounts receivables “limbo,” according to Fundbox's press release. ​

Dive Insight:


Tim Donovan, head of corporate communications for Fundbox, told CFO Dive management had searched for two years for the right person for the CFO role before finding Abrahamsen.

"We see Marten as the Swiss army knife," Donovan said. ​"He has investing and financial experience and the rigor to invest in the right processes and procedures that would set our company up if and when we’re ready to go public.”

Donovan said the executive team at Fundbox wants CFOs and finance teams to understand that the world of B2B is changing, and the biggest inhibitor to growth is the status quo. Fundbox, he said, has put a lot of money into artificial intelligence and machine learning in order to accurately assess the risk, health and wellness of a business.


The company's approach is especially helpful to small businesses, Abrahamsen believes. “That might sound overly simplistic, but small businesses have a lot of challenges that big companies don’t,” he told CFO Dive. “They don’t have power over their customers. If you’re a Walmart, you can kind of dictate terms. Small business owners can’t.”

In practice, this means small businesses often have to wait to get paid. “If you run a small business, and are waiting for a $25,000 invoice, you may not get payroll until you get that invoice.” he said. “And sometimes it can be up in the air if you’ll even really get paid. Fundbox steps in the middle there, and gives these businesses more predictability and certainty.” 
 
Pathway to IPO
Abrahamsen says his long background as an investor can help Fundbox execute on its vision. Prior to joining the company, he served as a partner and growth equity investor at investment firm The Chernin Group. Before that, he was a senior investor at Coatue Management’s private company investment fund, leading growth investments and advising portfolio companies on strategy, financial planning, and fundraising, the release said. Abrahamsen began his career as an investment banker at Goldman Sachs.

He says his skills are in “looking at many different parts of the business, and asking, ‘Do I think this is a business that could one day be worth a lot of money?’ Also, in getting to know this business, I’ve worked with a lot of people in the finance function and across the organization, and I ask, ‘Are we building the right product, and do we have the right engineering efforts?’”

He also cites his “very deep [knowledge]” on what it takes for a company to go public, which he says is on Fundbox’s roadmap. “I can express through metrics what we’re doing, and how well we’re doing," he said. "Those are the unique aspects of my background."

He said Fundbox is “quite a dramatic shift, candidly,” from his previous jobs. “But that’s the exciting part.”

In earlier positions, he said, “I’ve worked closely with CFOs, have been on committees to hire CFOs, and have been the interim finance leader of companies from time to time. I’ve done it, partially, from many different angles, but never had the complete day to day responsibilities [of CFO], and that’s very exciting.”

Investors always look for the next deal, or opportunity, he said. “You spend a lot of time getting to know the business, but once you make the investment, it’s onto the next,” he explained. “Now this is like a complete deep dive. I’m in our Dallas office making our sales team now, and going to depths for this company I’ve never gone on before. I’m going from mile wide, inch deep, to extremely deep on a single business.”

As an investor, Abrahamsen advised businesses on [optimization], but doesn’t get deeply involved in a single business for a solid period of time. “That’s what’s so exciting to me about putting all my efforts, energy, thoughts and dreams into how I can help Fundbox succeed, as opposed to just investing when I help my portfolio companies succeed,” he said. “It’s a big mental shift in how I spend my time and brain capacity.”

Even so, he sees his giant portfolio history as an asset going forward. “As an investor, I have both the blessing and the curse [of having worked with] a thousand companies over the last decade, and seen so many things,” he said. “I’m now thinking about how [I] have to commit to a singular company. [I was] extremely picky on what I would give up an investing career to do, but that’s what I’ve found in Fundbox.

Saturday, December 28, 2019

The entrepreneur’s beginning-of-year checklist

Source: https://tinyurl.com/qsepm5m

Written by: Meredith Wood December 13, 2019


This article was originally published on Dec. 31, 2018, and was updated on Dec. 13, 2019.

As an entrepreneur, you always have a lot to do, and little time in which to do it. But the beginning of the year offers you a unique opportunity to stop, breathe and evaluate. Take advantage of this time to reflect and refocus your efforts.

Just like making a list of New Year’s resolutions, we’ve made a list of business owner responsibilities that you might choose to tackle as you head into the new calendar year.


Beginning-of-year checklist: 8 essential things to do

Make your way down this checklist of important tasks to do on behalf of your business:

Set realistic financial goals.
Explore affordable financing products.
Migrate your busywork to automated solutions.
Investigate remote work options.
Focus on ROI in marketing efforts.
Connect with a mentor.
Read up on industry trends.
Do a recap and forecast with your team.

Before you charge ahead into the new year doing business as usual, check off these eight essential but manageable tasks.

1. Set realistic financial goals

The idea of setting goals might seem trite — of course, you want to accomplish big things. But if you’re not the kind of entrepreneur who really puts the things you want to achieve down in writing, make this the year you’ll do it.

Setting goals isn’t just about saying, “It’d be cool to make a million dollars,” though.

Because you’re a business owner, many of the goals you’ll look to achieve will be financial. Depending on how long you’ve been in business, how successful you’ve been of late, and what you’re looking to achieve in the next year, your financial goals may vary.

The best way to set these goals is to look into well-established systems of team productivity and goal-setting that other companies use to achieve results. Examples include Intel’s OKRs (Objectives and Key Results), and SMART (specific, measurable, achievable, relevant and time-bound) frameworks.

With OKRs, for example, you might make a list of objectives and key results for each area of your organization. Sales, finance, marketing, human resources, business development, engineering, product development — every team that contributes to the bottom line should have a sense of what they’re looking to accomplish heading into the new year.

Additionally, look into different tools and project management processes to help you achieve these.

It’s not enough to just set goals — you have to move your organization toward implementing the infrastructure to support achieving them, too.

2. Explore affordable financing products


If you’re headed into the new year on a roll — holiday sales were strong, and the business performed well throughout much of the year prior — then you want to at least explore the business financing options available to you.

This might seem backward to some business owners. Business loans, lines of credit and other business financing options are for businesses that need money, right? Why would I take out a loan if business is booming?
The truth is, the best time to look for financing is when your business is doing well.


When the business is struggling and you need a loan to stay afloat, you’re much less likely to qualify for the high-quality loan products that businesses use to catapult to greater success, such as SBA loans or 0% introductory APR credit cards.

There’s no need to take out a loan if you don’t need one. If you see an opportunity for expansion or improvement on the horizon, however, the beginning of the year is a good time to look into what financing you could qualify for.

Related: GoDaddy and Kabbage partnership gives entrepreneurs easy access to capital

3. Migrate your busywork to automated solutions



Automated solutions are quickly changing the way we work day-to-day.

People now spend much less updating spreadsheets, filling out timesheets or logging correspondence with clients.

We now have software and tools that can do these things for us while we focus on getting real work done.

If you aren’t using automated software solutions for tasks like accounting, customer relationship management and time tracking, it’s time to start.

Take accounting software for example. Consider that at the beginning of a new year, you have to wrap up your financial statements: P&L, balance sheet, and cash flow statement among them. Your business accounting software can run these reports with ease, while sending all the necessary information to your bookkeeper to process, as well as to the IRS.

Meanwhile, instead of spending hours calculating everything by hand, you can review your documents and ask yourself these important questions about your business:
Over the past year, have you managed your cash flow well?
Did your investments pay off and create the ROI you expected?
Are you going to need to replace any equipment or hire new staff?
Based on your forecasting, will you generate enough revenues to cover anticipated expenses?

Let your software do the heavy lifting, so you can work smarter in the year to come. Here are some options to get you started.

4. Investigate remote work options

Remote work — whether it’s allowing your full-time employees to work from home, contracting remote freelancers to help you complete a project, or utilizing the gig economy to help your business reach new customers (via delivery services, for example) — will be one of the defining work trends of this generation.

For some businesses, it’s not possible to utilize remote work opportunities, such as if you own a brick-and-mortar retail store. But these businesses will be in the minority: According to Upwork, 73% of all departments will have remote workers by 2028.

  • How would hiring remote workers benefit your business?
  • Could you widen your talent search for the right candidate, even if they live in a different (and less expensive) market?
  • Could you spend less money on office space as you instead rent coworking space across different cities, scaling up or down as needed?
  • Could you make the right temporary hire instead of the wrong long-term hire?

Start researching how an investment in your remote workforce — the price of remote communication tools, collaborative platforms and more cloud storage — could be worth their weight and then some.

Related: Remote work apps to keep you productive, creative and connected on the move

5. Focus on ROI in marketing efforts
When deciding which marketing initiatives to focus on in the coming year, your primary concern should be what kind of return on investment you’ll get from each one.

Novice marketers tend to take a “let’s throw everything at the wall and see what sticks” approach when it comes to new campaigns. Social media, email, blogging, paid advertising on social platforms — sure, why not? Hey, I heard Pinterest is getting big again, let’s buy advertisements on there as well as on Facebook and Instagram. This is all about “building our brand” anyway, right?


Marketing almost always involves striking a balance between understanding that not every initiative is perfectly measurable (many consider word-of-mouth the most effective marketing strategy, and that’s impossible to measure with confidence) and making sure that some marketing channels demonstrate a real ROI before moving forward with them.
Looking for a better digital marketing solution? GoDaddy Websites + Marketing integrates beautiful websites with email, SEO, social media and other marketing tools to drive more eyeballs to your business.


Especially when facing a year as uncertain as 2020 — which may continue to be weighed down by trade tensions, or could experience a recession, as some are predicting —it’s important to focus on marketing initiatives that you can show will make a difference in your bottom line.

For many businesses, email marketing is one of the best channels in digital marketing, as you can use it to recapture abandoned shopping carts, remarket to new buyers, and cement your relationship with existing customers.

But every business is different, so understand who you’re trying to reach and why before you start pouring money into a marketing channel to try to appeal to them.

6. Connect with a mentor



No matter what stage of life or business ownership you’re in, a mentor is an invaluable resource.

Whether you’re a new or well-established entrepreneur, gaining insight from someone in your field or industry who has been in your shoes can help you navigate uncertainty with greater ease and less financial risk.

According to a report from Kabbage, entrepreneurs basically fall into two camps: people who have benefited from having a mentor, and people who wish they had benefited from having a mentor.
  • 92% of small businesses agreed that mentors had a direct impact on growth and the survival of their business.
  • Of all the respondents, 63% didn’t have a mentor — and 89% of those small business owners wished that they did.

Mentors offer business owners objective advice, tales of subjective experience, access to a larger network of people and resources and much more.

When starting off a new year, consider getting in touch with someone who can help guide you through the next year of your business — and hopefully beyond.


You can connect with a mentor via a number of well-known organizations, such as SCORE or MENTOR.

Related: Finding a mentor — where to look and what to look for


7. Examine industry trends

As a busy owner, it’s important to know how to react to changes in your industry or sector. But if you can be proactive — well, that’s much better.


Don’t begin the year without taking the pulse on what’s going on, both within your industry and in every other industry that has bearing on yours.

For instance, if you make and sell wool sweaters internationally, you shouldn’t just look at wholesale and retail clothing trends. You also want to look at the price of your raw materials, including wool and dye, and fuel for the ships and planes that carry your goods.

You might even want to keep an eye on the length of seasons — are people even wearing sweaters as often as they used to? Maybe you need to introduce a lighter-weight thread into your product line, or try to open up distribution domestically, based on what you find.

Either way, you’re making proactive decisions.

This has become an especially important step to take as China and the United States continue to engage in a trade war. Prices for your goods may fluctuate or skyrocket at a moment’s notice. See if you can find a more stable inventory source, or build up a backlog of useable inventory that can potentially last until tensions ease.

Related: How to make your product imports profitable

8. Do a recap and forecast with your team

Whether your team is you and your accountant or lawyer, or you’ve built a robust and growing workforce with managers and freelance contributors, take the time at the end of each year (and the beginning of a new one) to update everyone on where you are and where you’re going.

An all-hands meeting that reviews OKRs and/or SMART objectives, your finances, and your ROI on major projects from the year before will not only keep your team in the loop, but it will help them feel more personally connected to the success of the business.

Additionally, informing your team of what you’re looking to accomplish next year — new OKRs, sure, but also possible investments in remote work opportunities, migrating workflows onto new platforms, and plans for expansion — comes with big benefits.

It will help ease the transition in case of major changes, and will allow you to field questions and hear valuable feedback about what works or what could be improved.

That last part is important.

Take the time to talk to your employees and understand how they’re feeling about their roles and responsibilities.

If you don’t do quarterly or biannual check-ins or reviews, the beginning of the year is a great time to do an annual review.

No business owner is an island. Keep your team informed as to how you’re doing and what’s coming next, and you’ll get greater buy-in and enthusiasm than if you keep them in the dark until the day of changes arrives.
Plan for success

Of course, there are probably a million things you’d like to do to give your business a fresh coat of paint, so to speak, at the beginning of the year.

If you can focus on a few vital stats and make improvements, a little just might go a long way.

Start with this beginning-of-the-year checklist, and you might find that certain areas require a greater investment of your time and energy than you originally thought. Similarly, you might decide that you can alter or skip certain steps next year, since they weren’t as impactful as you hoped.

As long as you cover the basics and do your due diligence to make sure your business is thinking proactively about the future, you’ll be well ahead of the curve.

Image by: thr3 eyes on Unsplash