July 05, 2016
On Tuesday June 28th Latam Founders hosted a breakfast discussion on Finance as a Partner featuring the most influential CFO’s in the industry including Art O'Keefe, CFO, Movile, Ben Gleason, Co-Founder, Guiabolso, Fernando Cymrot, CFO, Canal da Peça S.A., Marco Camhaji, CFO, Redpoint eVentures and Juliana Mello, Partner, Talengy. It was a very informative and productive conversation, here are the key takeaways from last weeks’ discussion.
Role of the CFO
The role of the CFO has changed, in addition to handling the financial tracking and compliance as the CFO you are now called upon to facilitate change and collaboration within the organization. It is up to you to ask the right questions, provide insights that drive strategic value and take on a more business development role in more areas of the business in order to be better positioned to further M&A opportunities that fit well with the company’s capabilities and divestitures of products and services that don’t (Art).
Ben Gleason believes that the CFO should not just be looked at as the guy that ‘says no to everything’ and ‘slows everyone down’, you have to be an enabler. As the CFO it is your responsibility to always be on the frontline, being the partner who gives constructive suggestions, thinking forward going beyond the back office, predicting numbers not just creating them.
In order to do this, the CFO must have strong business bias; having a strategic vision when the company is in a growth stage and be able to look with a critical eye for what can be gained by cutting costs. If you look closely you will find at least 3-5% that you can cut. (Marco)
According to Fernando Cymrot there are 3 main functions the CFO must have:
- Capital, liquidity, cash is king, the CFO must be focused on cash flow, cash burn, run way and the next fundraising round.
- As the CFO it is crucial to have an open relationship with clear communication channels with your investors. This is an important part of your next funding round as your current investors can open doors to future investors which will further your business. In addition, it is important to build close relationships with your service providers, to be well served you need to be the largest client or the closest one, as a startup it is clear relationships are key; if your provider likes you they will be more focused on helping you.
- Once you have access of all of the company’s information you can to manipulate numbers and extract information to do marketing and growth analysis allowing you to sit down with your CEO / cofounders to show performance and benchmarking. From the moment you can change numbers into a variable strategy for decision making you can contribute to each area of your startup in a more effective way.
Culture is ultimately an aggregate of the number of different beliefs that are tacit in an organization. As the CFO it is up to you to provide the hard data that allows the leadership team to build the case for culture change. The CFO is specifically positioned to make clear in both hard and soft dollar terms the impact for change that can be implemented across an organization. Taking it a step further the CFO can help the organization imagine what it could do with the resources or funds freed up by making such changes that are not serving the company well or even hindering performance
Marco Camhaji emphasized that the individuals who hold C -level positions in their startup should be the catalyzer of corporate culture. In Redpoint’s portfolio companies Camhaji says they encourage effective participation, especially from the CFO who can help create future scenarios that will help spread the corporate culture most effectively. Managers have a lot of concern with the technical agility of things and much less concern with people, this is an error that can be fatal, it can really kill a company.
When it comes to fundraising in times of a crisis there are some things Camaji believes you should keep in mind. The market of fundraising is getting more complex both in Brazil and overseas, business models are receiving more and more pressure for an earlier monetization to prove the model and validate the business. In general, fundraising is a hard and complex process, and as the CFO it takes focus away from operations. Fundraising takes a lot of time away from your day to day operations to prepare decks, materials, meet with investors, and handle other complexities that go along with the process. With the crisis there is more risk, where before fundraising on average took around 4-5 months today the process will take much more time so it is important you plan accordingly.
Management is doing things right. Leadership is doing the right things.
We hope to see you our next breakfast discussion on Sales Management on August 3rd in Sao Paulo. This will be a lively, informative and interactive discussion to learn best practices that will drive sales success in your company. This event is designed for the CEO, Head of Business Development, Sales Director and Sales Managers. make sure you get your tickets today!