The High Performance CFO - everything you need to know
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Slides from my talk at Point Nine Capital's 2014 SaaS Founder event
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The High Performance CFO - everything you need to know
- 1. The High Performance CFO 2014 SaaS Founder Meetup - SFO
- 2. Agenda Intro Part 1: The Essentials Part 2: Advanced Topics Wrap up: Good vs. Great CFOs © StartupCFO Enterprises Inc.
- 3. introduction © StartupCFO Enterprises Inc. mark macleod CFO Advisor Investor
- 4. Part 1: The Essentials © StartupCFO Enterprises Inc.
- 5. What a CFO does… • Act as a right hand to the CEO • Capitalize the company and preserve financial strength • Monitor, measure and continually propose improvements to the performance of the company • Maintain a deep command of business fundamentals and financial performance, including comparison to relevant benchmarks • Maintain deep relationships with key external stakeholders (directors, investors, lenders, bankers, analysts, competitors, industry peers) © StartupCFO Enterprises Inc.
- 6. What do they look like? © StartupCFO Enterprises Inc.
- 7. CFO Role Evolution © StartupCFO Enterprises Inc.
- 8. When should you hire a CFO? © StartupCFO Enterprises Inc.
- 9. Where do you find them? Investors Your lawyer Other entrepreneurs Look for: Recent exits True startup people For part time: Avoid double part time © StartupCFO Enterprises Inc.
- 10. Part 2: Advanced Topics © StartupCFO Enterprises Inc.
- 11. SaaS Math © StartupCFO Enterprises Inc.
- 12. Financial Reporting Do: •Report in $000s •Compare to budget •Show month on month trends (numbers, graphs) •Report KPIs •Add management commentary •Ship in a timely manner Don’t: •Send your entire chart of accounts •Expect much reaction Audits: •Just go ‘big 4’ © StartupCFO Enterprises Inc.
- 13. Finance Org Design © StartupCFO Enterprises Inc. Blue functions are in place today. Others are coming
- 14. Runway Why do startups die? •No cash Implications: •Always have $ How much should you raise? •$ to get to the next value creating milestone with wiggle room Avoid: •Having to raise •Tiny seed rounds © StartupCFO Enterprises Inc.
- 15. CFOs & Marketing Old School New School Hard to measure. Easy to cut © StartupCFO Enterprises Inc. spend Directly tied to growth. Need to work together Today’s reality: •Data-driven marketing •Tons of measures. Short on insights •Finance needs to partner with marketing •Challenging concepts for finance. i.e. “lift”
- 16. CEO leverage •CEO has the toughest job in the building •Only CFO can come close to seeing what the CFO sees (360 view) •Best CFOs will provide leverage to the CEO to help scale & sanity © StartupCFO Enterprises Inc.
- 17. Titles: VP vs. CFOs Considerations: •Stage •Experience needed •Ambitions (public) © StartupCFO Enterprises Inc. VP, Finance CFO Focus Minding the ship (reporting, controls, budgeting) Fundraising, deals, growth Experience Senior finance leader but never been CFO Prior CFO experience or rock star who’s ready Differentiator Can go beyond finance Experience & networks for raising capital
- 18. Good vs. Great CFOs © StartupCFO Enterprises Inc. Good Great Funding the business Diligence readiness. Build great financial models & reporting Has the relationships & experience to find great investors Strategy Supports strategy through models, etc. Directly contributes to and sets strategy Deals Provides finance & legal support Actively sources, supports & closes key deals Execution Supports through reporting, etc. Raises the bar by helping all departments execute better Focus Excellent finance leadership Running the business
- 19. © StartupCFO Enterprises Inc. Questions?
- 20. thank you © StartupCFO Enterprises Inc. mark macleod @startupcfo startupcfo.ca
Editor's Notes
- Eye chart (1 of many) Walk through and expand. Right hand: CFO has 360 view CEO’s job include raising $, but naturally CFO plays a huge role in this. Best CFOs can drive this Core: Build, sell. Rest is support. Finance supports through info and insight Must know model cold Many stakeholders. Save time for CEOs. Leverage
- Walk through each You actually want all 3 If you have to pick: get a dealmaker to start. Add actg expertise through other means and/ or later Many ways to get advisor role
- Another eye chart Most real CFOs don’t know what to do with early stage Never appoint a co-founder as CFO Growth (~$10M rev) Going from survival to adding value. Laying the foundations Broad skill set and network needed Large: $100M run rate. Market/ segment leader More time out of the building Very different breed. Most early/ growth people don’t stay as CFO here
- Note: not recruiters. Best CFOs are plugged into the ecosystem.
- You don’t learn this in accounting school Must know SaaS math Must understand correlations, drivers and be able to talk shop with product and marketing folks Test extensively for this before hiring. Can’t forecast or control without deep understanding here
- Org design is something you spend more time on as you grow Here’s mine Blue = meat & potatoes CD is new Just hired RH in strategy Data is a new area. Applied analytics (inside/ outside) Future areas
- Startups raise < 1 yr of runway. Have to raise again before they have traction/ proof
- If you don’t spend you don’t grow You actually want to spend aggressively Theoretical spend limit margin of where CPA = LTV in a channel Many estimates. Need to be deeply familiar with this or you risk blowing your brains out Many high burn models (hubspot, Wix, Box). At some point you’re betting the lines will cross
- Personally, I’d start with VP F. Even if you think this person can grow. I started as Director, Finance. No CFO above me SaaS for SMB = public profile
- Great CFOs Help run the business. Only partially about finance Active adding of value, not just measuring of it