Monday, January 27, 2020

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


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.


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.

No comments:

Post a Comment