From financing to scaling: What really matters to CFOs in high-growth companies

00:00:00: But sometimes actually the best idea is really common when you're slightly removed and if your always in the analysis paralysis, then you are not taking that step back until business make us a whole

00:00:10: sense.

00:00:10: I always ask myself this question does it move the needle?

00:00:15: You got to be fast!

00:00:16: You've gotta have your data together.

00:00:18: What would be first resources?

00:00:20: from technical perspective or personality?

00:00:25: As a startup, you're somewhere between default alive and risking insolvency.

00:00:29: At some point You need to flip the switch once the numbers run differently.

00:00:35: Scaling a startup is about controlling inputs and outputs, currently it's changing.

00:00:39: We know software startups as high margin.

00:00:41: no extra cost to serve customers therefore ultimately scalable.

00:00:45: But now with the rise of AI token usage agents there are costs for every new customer that needs to be controlled.

00:00:52: On LinkedIn I saw founder gets one compared to restaurant business because you need to find perfect mix serving best food at best prices.

00:01:02: Today's episode is called Scaling Finance, because it is the crucial skill that differentiates a good company from great companies.

00:01:08: That s why SAP for startups and we brought on two exceptional finance experts who can help you understand what scaling.

00:01:17: Fabian Deurek is the former COO and CFO of Starmind, former SVP operations of WeFox sits on board of Make.com and is consulting many more scale-up businesses in finance.

00:01:28: Remo Gerbeck is the CFO for SkySale.

00:01:30: SkySales changing the face of global pharmaceutical supply chains through a combination of hybrid containers, tracking software and risk management service.

00:01:39: One of RIMO's key responsibilities was SkyCell's one hundred sixty million dollar series D which brings total funding to two hundred and twelve million dollars.

00:01:48: with these two experts we're now diving deeper into the modern role of CFOs forecasting in KPI alignment fundraising and people.

00:01:56: We know you are going enjoy this episode Two Swiss people in the middle of Switzerland, in Zug actually to be precise.

00:02:05: In English doing a podcast about finance.

00:02:09: what led you here?

00:02:11: I guess there's second thing that we have in common or that i know we are having common which is uh... we're both working in finance.

00:02:18: so today um yeah Looking forward to discuss with you how do see the role as a CFO and maybe give one or two tips of what have been through in your career within fast-growing environments.

00:02:33: Maybe before we start, tell me a little bit about your career?

00:02:37: What did it take for this position here at SkySol?

00:02:43: Yeah, no I'm very happy too and i think we both agreed for the people watching this.

00:02:48: We are just going to share experiences... ...I think none of it is per se the truth and there's always different interpretations.. ..I think we reserve everything!

00:02:57: And then I would say that also my experience throughout my career.... ....and don't think I have a sort-of classic CFO profile if you want.

00:03:06: I am actually funny enough as a physicist by background so I studied here in Switzerland and then did a PhD.

00:03:14: In England, in Oxford more like life sciences actually physics and life sciences ended up at McKinsey doing strategy.

00:03:23: that's also the very classic type of career move but it was always driven by being interested in lots different fields especially I think business is just as interesting science right?

00:03:37: There are so many permutations of the same thing.

00:03:40: But I would also say throughout my business career, I looked at various different roles as started off actually obviously in strategy and looking at fake finance financial institutions but one of them was a chocolate factory in England to optimize operations on that.

00:03:59: And i've always liked an interplay between strategy And I think that's maybe the red threads throughout their career to say like, you know on one hand we have strategy.

00:04:09: We have numbers but then how do actually get things in motion?

00:04:14: That ultimately move them needle and change around a business performance.

00:04:19: so from there continue after McKinsey went into the fastest growing or maybe afterwards not so fast-growing Groupon which was fascinating too at like thousands of people around the world.

00:04:32: We grew into hundreds and millions, actually billions in a like a thirteen billion IPO which was fascinating.

00:04:37: it was total zoo!

00:04:39: And probably also one experiences of like if you don't have systems in place.

00:04:45: And then, not many companies have the chance to grow into billions of transactions and cash flows in a period of four or five years.

00:04:55: but I think that was also one of the challenges very early on clear even though it doesn't link together with the finance system You end up running into trouble.

00:05:06: eventually You're getting more and more sand in the wheels.

00:05:11: And it also leads to ultimately an underperformance, as we've seen with this particular company.

00:05:16: then once you actually want to go into a listing... ...and things do come up but that thing's getting harder and harder to stay on their control.

00:05:24: so what was fascinating journey.

00:05:27: since then done lots of different other things run at taxi company competing against Uber in London get still around.

00:05:35: super fascinating that ultimately the right hailing on demand, market and maybe the most funny thing was flying taxis.

00:05:43: Flying a vertical take-off in landing aircraft in Germany with Lillium which is really different challenge as all of these had very different challenges.

00:05:52: one of course with the electric aircraft how to actually finance probably billion plus capital expenditure before you even see a first passenger flying in this machine and obviously certification.

00:06:07: And so there I ran different roles from the finance side, like we were ten people when i joined them they're like a thousand people.

00:06:15: then when i left and we had the IPO on the NASDAQ fascinating journey seeing all of these different stages um...and now off course two skies up right?

00:06:26: This is where are today A very different company and we can share a bit more in the second.

00:06:34: but here, we do medicine transports.

00:06:37: We actually produce hardware for medicines that travel around the world.

00:06:42: I could share with you about that.

00:06:43: But also coupled to this global visibility so it's tracking the goods from all over the world And then providing software systems for our pharma clients To monitor and intervene as well happens in Delhi or wherever their precious goods are that actually they know how to do things.

00:07:04: Totally different challenges.

00:07:05: and then here but always maybe you're linked probably financing companies, getting the strategic direction for future growth together.

00:07:16: So that's me in a very quick nutshell.

00:07:19: maybe what about you?

00:07:21: I understand your also having a varied journey to where we are today.

00:07:28: Yes, I do.

00:07:29: I think we have one thing in common and believe probably you're both curious.

00:07:33: so i was always curious also seen different business models, different challenges... ...and I believe in challenges that you learn the most!

00:07:42: I actually started hotel management where I learned that a client is the most important part of your life business, so to say.

00:07:51: And I would say that has actually been part of me since the very beginning and that's maybe a little bit unusual in finance who is often considered a backward looking function.

00:08:02: but then started my career out in a big four advising financial institutions on risk management and also did CPAs was more on classical road always under search of being more in the business.

00:08:20: So that's when I then also changed, I went into the business and started in corporates where I did emanate transactions as a freelancer and kind of stumbled to start-up and scale up industry because it was interesting here.

00:08:35: so you can really drive things forward and see topics outside finance at this point Sales related topics like building a sales operations organization or also getting involved in HR doing all the mistakes and scaling with people.

00:08:55: And I also found it that was difficult to be perceived as the CFO, and responsible for people.

00:09:02: so thats definitely something i wouldn't really get into that much at this point of time.

00:09:10: Yeah, I also was in a scale-up where we grew from about two hundred and something FTEs to fourteen hundred then back to a thousand via M&A but also by organic growth.

00:09:22: We went through some challenging phases as well.

00:09:25: today.

00:09:26: i'm definitely grateful for it!

00:09:28: I learned a lot.

00:09:29: Also how you actually tackle challenges not only being responsible for bringing the costs down.

00:09:36: For example, which is not always a funny topic because it always impacts people and also in bringing together different business models under one roof.

00:09:47: how do you actually ensure that deliver what has been promised in investor story?

00:09:53: And How Do You Adapt When The Market Environment Changes?

00:09:58: Yeah today I work with several Not Only One Companies Automate their financial functions because I believe you said it systems are key, but there's a lot to come with all the new developments.

00:10:12: You don't need to change everything from the inside out.

00:10:15: There is so much opportunity that you can realize With add-ons two systems or processes.

00:10:23: Yeah, that's what I do today so i'm looking forward to having this discussion.

00:10:27: It will be focused a little bit on growth because it is the environment we are both in and how you also generate efficiencies but never lose sight of what the CFO also is basically the gatekeepers or you can just...

00:10:44: So I am curious!

00:10:45: Do think having seen from your saying many different aspects for business does help now in your function, and when actually growing a company that you've seen from the sales side to the HR side.

00:11:00: You have seen various different functions.

00:11:02: so do think it is essential as well for the role of CFO?

00:11:08: I wouldn't say essential because many paths can lead to certain functions also with the CFO role.

00:11:15: but i would say this has definitely helped me from understanding, I mean in the end the financials are always a result of something.

00:11:24: And which levers do you have to turn?

00:11:27: To actually improve the results or get to the financial that you need to achieve this strategy?

00:11:32: so i think for that it has definitely been helpful and your also change maker.

00:11:39: in fast-scaling environments You must make sure move at certain pace And it's easier for me at least when I understand what does a marketing function do?

00:11:48: Or, What are the challenges of people?

00:11:51: functions or is really their core priority to actually implement an ERP.

00:11:58: The People Function implemented new systems but no one really thought about data transfer to the system.

00:12:05: Then you know...what are different roles and mindsets?

00:12:08: How do different rules look on certain aspects in business?

00:12:13: I would say it's helpful, but not a necessity.

00:12:16: How do you describe the role of CFO?

00:12:21: There are lots of different permutations as you said.

00:12:25: or maybe how would you describe your own role at CFO and what type of flavour do you bring to the table?

00:12:36: The CFO role is currently changing driven by automation AI, what they will bring in the future.

00:12:44: There's a lot of fuss and hype about it actually is able to do right now but I believe that's more than the future.

00:12:51: personally i see there CFO as strategic business partner.

00:12:55: In my opinion everything which is what I call finance operations daily business just has to run so It doesn't move the needle or in general for the business.

00:13:06: But it has to be accurate

00:13:07: unless you don't work

00:13:09: Exactly.

00:13:10: It has to be accurate and complete, so I see it more towards the strategic business partner because personally i've seen what you can actually influence... ...I'm sure that after this experience as well where would say did you have influenced the business outcome most in recent months?

00:13:28: Can you name an example

00:13:29: for me?

00:13:31: Yeah no look maybe slightly different answer is interesting.

00:13:37: It actually changes also very much with the stage of the company, right?

00:13:43: And I think that you know You can be right.

00:13:48: and in some of them most critical times when it's a do or die type of moment How do you actually finance to next ten million?

00:13:55: then kind like be that from existing investors in late-night negotiations Or convert so some venture debt Or very, very different when you're actually in a much larger organization than what we already have.

00:14:08: A rolling business and it's potentially more about making sure the cash flows ultimately add up on the swings of receivables.

00:14:21: don't get you out of into a very nasty situation.

00:14:25: As we've seen, my mother always said I should have taken the proper job and work for Credit Suisse but these kind challenges are in extremely large businesses as well as in startup environment.

00:14:39: that makes it so exciting when your coming to CFO or any sort-of sea level at an early stage Start up.

00:14:50: you typically work very closely with the founders on some of that.

00:14:54: The very basic stuff.

00:14:55: at the same time, we're building them to play in and then off course as the stages grow into more the scale ups into this is hundreds of millions type of funding and starting to see the automation start to be probably much more like building actually the rails that you can also do not just ten million or fifteen million but five hundred million in revenue.

00:15:20: That's two very different categories, I think smaller is still manageable with small teams potentially just, you know getting the job done right.

00:15:31: and then the latter starts to be like without automation.

00:15:34: You are going to lose track of some very key things And if you don't have that monitoring element... ...you might end up totally in the wrong place.

00:15:44: So yeah I think not sure you've seen or feel it as well.

00:15:49: No i agree more off the same.

00:15:52: so this scaling is different than too early stage.

00:15:54: I believe you can grow from one phase to the other, but you need to adapt and make sure that you have the right partners or coaches or mentors who help in areas where they may never be done.

00:16:12: It's different to outsource accounting because now there are two accountants instead of one when first face-of-groves tend to actually implement a fully fledged SIP.

00:16:26: I believe you're doing that right now, so we are always going.

00:16:30: Look i think good!

00:16:31: We were in an interesting phase because company has taken quite a long time ago like about ten years ago the strategic decision to build its own ERP system for our core business.

00:16:45: Our core business ultimately is... thousands of containers that are flying around the world, not transported by us.

00:16:53: But we're global truly global with fifty stations all over the world operating in pretty much any country because they go anywhere right?

00:17:02: We had a very specific problem for which couldn't even find an ERP system to necessarily mirror exactly those business processes.

00:17:11: and And so the decision at that time was very much to say, let's go with a simple finance ERP but actually have our core operational ERP done ourselves for those specific processes.

00:17:27: Our first journey now isn't why I'm maybe slightly less nervous than what you expect.

00:17:34: my answer is because we're transforming and moving on the financial reporting part from on the previous version that we have into SAP.

00:17:46: And then, the whole core of the operational working off-the-company actually remains independent right?

00:17:52: So so... The very worst thing I can say is like my team was working day and night trying to avoid it.

00:18:00: but there might be some challenges in the statements too.

00:18:04: come when they'll do some explaining.

00:18:06: But i think the core operations are not going on the shelves, from the transition.

00:18:14: And I think that's maybe kind of lucky.

00:18:17: but it also comes with its own challenges because you're having a multi-systems landscape and everybody does right?

00:18:24: So yeah... I

00:18:27: think there are pros and cons to everything.

00:18:30: The responsibility for us here in Backoffice functions is supporting business not trying the best or most sophisticated with any features.

00:18:44: SAP and for that I believe from own experience also large ERP implementations, key is design phase.

00:18:54: What do you actually want to achieve?

00:18:56: with that system.

00:18:57: That's also what I heard from you, You made a conscious decision.

00:19:00: this is in the SAP or finance systems and there are rest outside And i believe thats truly core and its actually case for all of your systems.

00:19:13: as a CFO you have to get into the Veeds.

00:19:15: it may be wrong word but you need To Get around IT.

00:19:22: What is supporting?

00:19:24: Where Is Which Data Sitting?

00:19:27: I think, especially in Brownfield which we call companies that are fastly growing but already have existing systems for example roll-ups or buy and build stories.

00:19:39: I see a lot.

00:19:40: it's not clear what is where?

00:19:43: Where has the customer information stored?

00:19:45: What actually financial information?

00:19:48: What operational information?

00:19:49: how do you bring together And I think that's a little bit, has become my core out of all... Yeah

00:19:56: you told me!

00:19:57: I get to sense your crack on.

00:20:01: What would you recommend the audience?

00:20:03: So obviously this is a tricky challenge because everybody have different starting point from where they go.

00:20:11: but if you had any guidance towards looking into future it will be yours advice.

00:20:20: I think in the future, if we want to look out into the future everything is going to be automated because it's not core.

00:20:30: Today there are a lot of money sometimes wasted on non-core functions and today they have different possibilities to have a multi-system IT landscape.

00:20:43: It's not such a challenge anymore as it was maybe years back, but my advice is actually take a step back and really look at your IT landscape also together with the CTO if you have one or may be someone external and define what is core data that needs to run business?

00:21:03: Where are they stored?

00:21:05: What systems do we have?

00:21:06: Is this system mainly for data storage or is it supporting core processes?

00:21:12: Or in the back office.

00:21:15: I see a lot that this isn't really defined.

00:21:18: and then different functions, finance IT marketing HR whatsoever.

00:21:23: they of course want to achieve their job And maybe finance optimizes for themselves.

00:21:31: When everyone optimizes but no one has an overarching overview how does it help us to achieve our numbers?

00:21:39: then I think it becomes difficult.

00:21:41: And its harder to correct in hindsight than do with correct from the beginning, but that's actually case of everything.

00:21:48: Toots about also setting right keep eyes on a beginning?

00:21:52: I would say so yes i think thats one major rules for CFO.

00:21:57: basically take strategy and transfer into numbers making sure how is measured people are incentivized.

00:22:10: and what comes to my mind here is also, how do you bring people together?

00:22:15: I guess we all have been in board meetings where the sales boss presents numbers that you as a CFO or like... Or I was at some point in time sweating blood saying thinking oh these are not really the numbers that I have.

00:22:30: Why could that be the case?

00:22:33: And How Do You See

00:22:34: That?,

00:22:34: How Important Is It That Your Operational Numbers From The Court systems, let's say Salesforce are really aligned with the financials?

00:22:43: or what is your perspective on this

00:22:46: topic to avoid

00:22:47: that.

00:22:48: The stakeholders get different numbers from people.

00:22:51: I think interesting question and then answering in two different parts right because i think under one hand there like yeah What do you see operationally?

00:22:58: And then what is ultimately translating into hard revenue numbers?

00:23:02: but another topic we should talk about is forecasting.

00:23:07: I can see you smile, right?

00:23:08: And the thing that's also very interesting is really... Look.

00:23:13: On operational data versus what i always find somewhat challenging when people are simply using any discrepancy as an excuse not to engage on.

00:23:26: potentially there is a challenge Because very often, especially when you look from a sort of finance lens.

00:23:35: There's set numbers that number is probably inherently makes sense must make sense rather than it shows the certain trajectory or certain insight.

00:23:43: and maybe there's a challenge.

00:23:45: but be that on margin side to beat out on volume site I always find not particularly Fruitful to just say look the numbers are wrong and therefore we can't engage even on the dialogue that there's potentially a challenge.

00:24:02: right by best they were operationally.

00:24:04: I see A slightly different number, right?

00:24:06: So I think this is number one.

00:24:08: Right

00:24:08: so you're saying it is Copic switches from The business performance today.

00:24:14: the quality

00:24:15: yeah Yeah That's what I don't know.

00:24:17: thinking he shouldn't use data quality as an excuse not actually think about what are the levers, not actually the drivers of the business performance that we all agree with.

00:24:27: If you grow up fantastically and phenomenally everybody's going to be happy when they clap so on right?

00:24:33: So this is one.

00:24:34: then I think two.

00:24:35: i can live at a certain level of ambiguity.

00:24:38: might especially in your high growth environment these systems which are still evolving changing as long The difference between why it dropped by five percent or about five point.

00:24:54: five percent depends on how big the number is.

00:24:55: right, but in a way like you still dropped rights and it's going into wrong direction versus like.

00:25:02: And as long as not one numbers that I get to it grew by twenty percent and then the other number says he drop a family that's an interesting one as well because they might be actually somebody just looking at volume and Ignoring margin right or actually focus focusing on like some people.

00:25:20: It's always funny that when people just look at the number of, let say social media followers so I thought yeah this is great but it doesn't translate into dollars and stuff But its a leading indicator as well.

00:25:34: So i think we shouldn't ignore leading indicators.

00:25:38: i can live in certain ambiguity between these various different inputs as long as we don't need an end up.

00:25:45: In this of a senseless discussion of like will be caught even discuss potentially what the financial numbers are saying to identify trends and then collect look at like.

00:25:55: where should you take corrective actions?

00:25:56: right?

00:25:57: because uh... It then actually leads to my question for you about forecasting, right?

00:26:03: Because we typically do all have the same challenge.

00:26:06: We use historical data to derive forecasts and it's just an inherently difficult and error-prone and never going be accurate type of process.

00:26:18: And so I'm curious... You're more in a sort P environment So there are different environments.

00:26:28: You probably have the public company environment, you probably have a P-environment.

00:26:32: The high growth environments all demand different growth curves and then different kind of like accuracy to forecast right?

00:26:41: How are you thinking about that?

00:26:44: I agree with what you said before.

00:26:45: i think you need to agree on What is the deviation That you can live?

00:26:51: How accurate do you want to be?

00:26:53: and I believe it's different if your in a distressed situation or things are really going well.

00:27:00: more growth and at the same margin, or if you want to increase the margins then you have go a bit more into details.

00:27:08: And it's different things that we look in those situations as well right?

00:27:12: Exactly yeah definitely!

00:27:13: In the

00:27:13: distress one is just cash at the end of today Right?

00:27:17: Or not just cash?

00:27:18: At the end day yes... You need something to earn capital to allocate it for innovation or progress Whether it's financial progress or other.

00:27:32: progress could also be that you invest everything in order to beat a leader in certain category, for example.

00:27:38: And this is by the way very hard too.

00:27:41: translate that into financial numbers right.

00:27:43: so let say your investing tens of millions dollars and two into new product right?

00:27:52: Etc.

00:27:52: This is actually something that might be asked company, I mean i've seen it with aviation right?

00:27:58: Until you have an airplane certified and then trans...

00:28:03: Or in the M&A environment!

00:28:05: It's

00:28:06: super difficult to time deals.

00:28:10: Personally see a little bit from two perspectives.

00:28:13: one is running business that I think if you understand the business and have a little bit of history, not in super high-gross environment.

00:28:23: You can forecast it as best at certain points in time.

00:28:28: And there I think KPI tree is really important.

00:28:31: What are your indicators?

00:28:34: Or what are your levels to influence in order achieve top line or margin That someone on the top might be set and isn't even realistic?

00:28:44: And then the other part is inorganic growth or everything which isn't so easily planable because it could be changing at any moment of time.

00:28:53: I think we have to be realistic, its never fully true.

00:28:57: It's best you can do a certain point and maybe something with age but sometimes i believe that more often than not All the effort that you put in I think sometimes analysis can be paralyzes and then translates also into the into the forecast because You have so many different scenarios And you don't really know which one to pick.

00:29:25: And the more you analyze, The more uncertain uh...you get.

00:29:28: Sometimes now i think it's better To actually say okay this is the baseline Which we know?

00:29:34: That We Don't Know!

00:29:36: If It fluctuates by x percent What do we need to do?

00:29:40: Or what does it mean for our cash.

00:29:42: And I think that's maybe, That is a better way to look at than try and forecast as accurately as possible because i've never seen it done... ...and another challenge in the forecasting is what you do top down which include the CFO.. ..and bottom up.

00:30:01: Challenge more!

00:30:02: No no you brought enough so.... This is an interesting point.

00:30:08: and then for those who don't get it, right?

00:30:10: How much he's actually top-down target setting versus bottom up sort of like potentially sandbagging slash creating some achievable targets vs more stretched targets.

00:30:25: I believe that you definitely need to bring people on board And you can do that in many different ways.

00:30:32: Either they can do the bottom-up forecast on their own, but this means it may not fit at all to what your idea is from top down or what you need to achieve and then there's a lot of convincing change management to do so... Or if you do with Top Down and then they manipulate the bottom up numbers to actually achieve the Top Down given target.

00:30:57: So I believe its probably somewhere.

00:31:01: For me forecasting goes together with business analytics because I think the better you are in understanding your business and analyzing how many leads to generate for X, Y amount of cash or margin.

00:31:18: If you know that it's easier to forecast so four departments get their own analytics.

00:31:28: maybe no team, but at least approach that they can find their own way in how to actually figure out what many leads are needed.

00:31:39: But I believe you have to give the KPIs and guidance from top-down not because you want to force them into something or you need to foster alignment And i think this is one of major rules As a CFO, not sure how you do it.

00:31:54: Do you have teams that do the analytics in your businesses?

00:31:58: Or

00:31:59: are

00:31:59: you controlling everything

00:32:02: from your Eiffel Tower or...?

00:32:03: I love my Eiffle Tower!

00:32:05: No no and i think its very important right... It's ownership as well.

00:32:09: And then I think in part it's and that's a tricky part, right?

00:32:13: Because ultimately the function also is very much there.

00:32:17: The linchpin to the outside world be that existing investors which are semi-outside but also future investors or the street.

00:32:27: for like the public... That's tough job!

00:32:32: For the public CFOs.

00:32:35: Ultimately as we were probably in similar stages, women are still raising capital.

00:32:42: right.

00:32:43: you're also making certain long term predictions and i think that needs to ultimately translate into a strategy because it's actually pointless to write down that you gonna grow ten x if we don't have like people do that.

00:32:57: I've seen many times insane prediction into the future without having clear product strategies that makes it not just dependent on one variable but actually multiple variables, right?

00:33:12: Because It's simply possible to say whether this is right or wrong.

00:33:16: Right But the point is can you achieve a ten Or five or ten or fifteen X versus just staying stagnant and actually not growing very much?

00:33:25: So I think there's kind of like... You need start somewhere as well

00:33:29: And you better displan from their functions or whoever From people who are responsible the less control you feel, you need to have.

00:33:39: True

00:33:39: and then it's about capital allocation as well right?

00:33:41: So so than... Then we actually think like where do you place the bets?

00:33:46: but they're bets at the end of today because that's such an inherent issue with business might be.

00:33:52: just don't know for certain.

00:33:53: that now come is a certain outcome.

00:33:56: And I see when he gets very interesting in translating into typically in the sort of preparation to investors, right?

00:34:08: And that is a very much top-down exercise where you often write based on deep knowledge of the system.

00:34:15: That's why I've found this.

00:34:16: very often are critical when actually setting up vision and believing like translating... That's what strategy piece comes into as well.

00:34:26: Translating it into executable work streams that you can then go off and do.

00:34:34: And it's about execution at delivery in order to, but as a very different situation... It is also very different when they grow from one hundred thousand to two million right?

00:34:46: Or growing from a million-to-a hundred million totally different scale of ten million or one hundred million.

00:34:57: very different things, right?

00:34:58: One you can sort of almost like fudge through manpower growing from ten million to a hundred million.

00:35:03: That's then the very-very difference.

00:35:05: for that You need to have a product and you need to be productized in there And that needs to start to develop life off its own.

00:35:13: But yeah.

00:35:13: So this is where I think that top down strategy setting at the bottom up team actually then translate.

00:35:19: getting people engaged on this journey starts to become very difficult, right?

00:35:24: Because yes these are crazy targets and people have to sort of understand why?

00:35:32: what makes this possible.

00:35:33: I think there's one thing in common which you have all the different growth stages Which is not really associated with the CFO role or that doesn't get enough credit.

00:35:44: It also creates alignment And I think that it's a people factor because you, yes.

00:35:52: You can say this is how we achieve our target but if its not backed up by the plan and behind the plan there are always peoples.

00:35:59: so i believe

00:36:00: thats

00:36:02: something which I don't think they all get enough credit for.

00:36:05: It also has super crucial capability to bring in stakeholders.

00:36:18: What would you say is key in A to get it over the line and B, could you elaborate a little bit which option?

00:36:26: Like are going to raise additional shares or are we gonna have credits.

00:36:33: And at what point of time do you think about those different options?

00:36:47: There's so many companies that actually have great financing discussions.

00:36:52: But the difference between having discussion, I think one thing is like especially in the VC environment their job to speak as many companies possible and pick winners.

00:37:03: which ones are strongest opportunities?

00:37:06: And i think thats maybe a piece of advice.

00:37:08: you cannot until term sheets but not even turn seats until you actually have the money in the bank.

00:37:14: it's just not

00:37:14: done right

00:37:16: and i think that this is my number one mantra is that they're actually done when its done right type of mentality means.

00:37:23: You really need to stay on top of this person, you should work on potentially still long term.

00:37:29: sheet number two and three.

00:37:31: And for because of terms sheet number one realize that the only term sheet actually deal might all of a sudden change in the last minute, all these things happen at the time right?

00:37:39: or did he even fail becausse?

00:37:41: all other sudden market start sputtering again.

00:37:44: this can't have happened.

00:37:45: it matter weeks night end insomthing else happens in a font and then all of us are.

00:37:50: they pull back and yeah And of course, right?

00:37:53: Some are the best ones.

00:37:54: We never renegade on a term sheet but there's lots different ways.

00:37:58: even if you say like... making the process or DDR, whatever stretched out and then make that thing go away on its own.

00:38:09: This is number one.

00:38:10: so you need to stay at top of this process which means... You've got be fast, organized, have your data together!

00:38:16: You actually have to respond to questions but not over-respond them and manage it and ultimately drive into a close right?

00:38:26: The best thing we can do not just have one fire in the iron, but monomone iron and a fire with multiples to make sure that you somewhat have diversified process.

00:38:39: And then types of capital really depends on type situation your seed or CSA company.

00:38:48: there's so many different options.

00:38:51: potentially doesn't make it easier.

00:38:53: Or founder preferences.

00:38:54: Or founder preference, and then you have to think about the dilution or so.

00:38:58: but look I think that some of the best founders i found is they actually are not worried about dilution right?

00:39:04: They're worried about actually their bigger company outcome.

00:39:08: And Of course it isn't important Right!

00:39:09: But I think its always a bit...and of course It matters to them personally The Dilution in all these things and to certain degree Also All the voting.

00:39:20: But if that is your number one first priority, then everything else gets actually very difficult to achieve.

00:39:26: And funds realize that as well and it can make things complicated right?

00:39:33: So I think you're better off driving especially for a good deal than doing the thing to get maximum valuation and then be potentially optimizing how much capital you take at which stage.

00:39:47: but also generally my experience You're better off taking a little bit more capital than potentially what you think.

00:39:54: Because it always gives that extra buffer, right?

00:39:57: If in the scale-up if your still at this stage where you have run way... ...you are actually better of having an extra six months which typically takes you then just only have whatever eighteen or twenty four months to do because unfortunately also one thing I've seen is getting a little expensive than what you think initially in your plan.

00:40:19: It really is, right?

00:40:20: Because he started having some capital and then they actually start bringing on people And the world isn't maybe as simple as one thinks In early stages like that.

00:40:32: You also have certain...

00:40:33: Things take longer

00:40:34: Yeah!

00:40:34: And certain inefficiencies That starts to creep in.

00:40:37: Then it should work very hard not having those.

00:40:41: Then there's a whole menu from And just pure primary equity to ultimately converts, also debt like these days.

00:40:50: Especially when you're getting a bit more advanced right?

00:40:52: So there's bunch of different ways and two or so have that funding for certain period but... You've got the plan!

00:40:58: Like we had very clear picture on how your are becoming cash flow positive in how they actually managing all of this is dead in particular.

00:41:10: You gotta think about it through And then, of course on the equity you need to also be smart about how do you think about valuation steps.

00:41:18: There are all these lots different permutations but I think that we have to get our job done because otherwise you can agonise and analyse analysis.

00:41:27: paralysis on fundraising is probably the worst thing And

00:41:32: you need to stay in control, which is not always as easy because all the investors have different viewpoints on your business.

00:41:39: Are you adjusting their business plan or not?

00:41:40: So I believe... Yeah!

00:41:42: You need go out with a goal and stand firm on it except there's an argument of changing.

00:41:49: that actually has foundation.

00:41:52: On day one we collected money.

00:41:54: everyone was happy already started looking for new resources so everybody starts hiring.

00:42:01: How do you deal with that face?

00:42:02: You know when the money is in the bank and everyone comes to this year for a. yeah We budgeted three additional people.

00:42:09: what I need?

00:42:09: actually?

00:42:10: six or five four, four.

00:42:11: I think they nearly lost.

00:42:12: right.

00:42:13: if This is your day one then kind of something fun.

00:42:15: They should have planned In a way that actually Day One nothing happens, right.

00:42:19: And then actually

00:42:20: because things change maybe it took a year Or six months.

00:42:24: no right and then may be sort like on day one Like maybe we're like slightly more relieved at.

00:42:29: You're not gonna have to do the really hard and ugly stuff next month.

00:42:34: It depends on close yard of wire, right?

00:42:36: But I think my general mantra would be like you should've been planning anyways that nothing... Like day one whether it's last months or this month so next month.. And then i think only know how much you managed raise.

00:42:48: So this is a luxury.

00:42:50: if you raise all the money that you wanted to raise, not everybody achieves it.

00:42:55: Then I think as your going through that process then its time really work with team and look at how do most effectively allocate capital.

00:43:10: It's a bit trickier when you're having very long-term investments, right?

00:43:13: So and then there.

00:43:15: You always need to sort of strike that balance between.

00:43:17: maybe they are certain investments so you can do very early on.

00:43:21: the risk afterwards timeline later on with more expensive parts needs to be delivered.

00:43:29: but generally speaking I think one day is really in the bank where nothing for say changes.

00:43:39: you're starting to get into the next stage of that execution.

00:43:43: And I think it should be still always like a revisiting of the plan, because maybe six months have passed and things have changed but people shouldn't be having... The job offers for you to sign on day one right?

00:43:59: I find that... Yeah

00:44:02: i have question which we didn't pre-discuss But I didn't

00:44:06: discuss any of this.

00:44:08: Yeah, but we did not touch upon it at all!

00:44:12: As a CFO in fast-changing environment you need to change because as described very well before... You know that you have to adapt.

00:44:19: things changed the money doesn't come on time and then the plan changes or the market is constantly changing so to say which can be very tiring, and then you have the resilience that you need.

00:44:34: Maybe sometimes also... You can close things on time or you can predict so well.

00:44:40: how do you deal with this personally?

00:44:43: What would say is a kind of condition like change in order to be more resilient than other environments where we go from quarter-to-quarter

00:44:55: I think if you are in the start-up environment, pretty much most of roles and that's from entry level roles to senior roles.

00:45:07: You need a willingness to engage on this process so it won't be linear.

00:45:16: I think corporate used to be maybe a little bit more like that, but i also believe um That corporate these days just moves from one restructure To the other and then i think this is unfortunately for most people in the work environment actually Nothing unusual right?

00:45:30: But we all need to deal with change pretty much All the time.

00:45:34: And so therefore Um, I would say this isn't per se that you work in a high-growth environment or whether on the big bank and things happen, I think they're there.

00:45:45: You need to probably still look at what gives you sort of like the inner gratitude and strength?

00:45:53: To say...you are still YOU!

00:45:56: And then this also needs some sort.

00:45:58: Like people always like to talk about balance, right?

00:46:00: But I think you do need to find just sort of these islands that are your island.

00:46:05: Right and for some people it's their family for others instead they're the exercise for other people in state desert or whatever that is.

00:46:14: And i have seen someone get really burned when giving up everything Right when they have not actually found and I have sort of any sort of counterpart anymore to that business cycle.

00:46:28: That obviously constantly changes, right?

00:46:31: So do you think it's important people maintain some kind of a core that gives them different strengths because for example In in some of the toughest times that I found.

00:46:43: That just walked up into the mountains is one of the beautiful things about Switzerland, right?

00:46:47: Yes Just look at the Giants and you know they're still gonna be here in a million years right?

00:46:51: so that puts everything a little bit into perspective, right?

00:46:54: Or if you don't have mountains.

00:46:56: You can look at the stars and then that actually gives you an even bigger perspective.

00:46:59: No when it's cloudy in London we don't see any stars as was always my challenge living in London.

00:47:04: but thats like many billions of years that they do universe maybe just tiny speckles in that I think just keeping sort-of sense or perspective in these things.

00:47:17: people moved on all this great founder stories Boston and billionaires again, whatever.

00:47:24: But I think it's true for everybody right?

00:47:26: We all need to get through these knobs and sounds.

00:47:28: What about you?

00:47:29: how do deal with this challenge in life?

00:47:33: In general?

00:47:34: i think im someone who likes change so i get bored very easily And like the environment because it requires curiosity and constant learning which i personally like.

00:47:44: but no i agree also need take time away to put things into perspective.

00:47:51: I think it's very easy, you get stuck in your daily routine.

00:47:55: but for me its important that and i stay grounded by also living a little bit apart not where my work is In an environment with nothing to do technology or even fast-paced, so I live in Lusson and a tourist town.

00:48:11: Also very small still have contacts to friends or family that are more outside.

00:48:17: That's definitely something that keeps me grounded And also believe having good team.

00:48:23: So i'm key believer really making sure you work with people.

00:48:27: You're kind of at low state.

00:48:30: It sounds like Don't want to sound spiritual, but I believe in.

00:48:35: you need to have good people around and i think i've invested a lot of time In finding them.

00:48:41: before it was more my own team.

00:48:42: But now It's also who do?

00:48:43: Do i wanna work for And with?

00:48:46: because i believe that has A lot To do With the balance and whether You can keep it or not no matter Whether you go in The mountains Or Have your sacred spaces.

00:48:57: and i Think it's Not so easy to find good people in a fast-changing environment, because also they are constantly changing.

00:49:05: And you have to offer something that they develop with you or want to develop.

00:49:10: so what would say our crucial resources?

00:49:14: That we need the team to actually succeed if your'e on a fast growth stage not at very beginning.

00:49:20: there it's probably more straight forward.

00:49:23: You can still outsource alot and need more generalist maybe But when you really start scaling, maybe have made a larger round.

00:49:32: What would be the first resources to hire?

00:49:35: Maybe from technical perspective and also personality perspective.

00:49:41: I think this depends on my... The more advanced things get, obviously the bigger numbers.

00:49:48: also you need to have a little bit of experience.

00:49:52: So I think that somebody who's never done sort-of like full year consolidation or multi group international consolidation and then yes You can learn them when things are still small because Also the margin of error is much smaller right?

00:50:08: And i think later on you need look for people.

00:50:10: Yes!

00:50:11: Who has done it?

00:50:12: automation and you have who has done like basically, how do I do this when it's ten times bigger without adding a hundred people outsourced in something.

00:50:26: This is the mindset right?

00:50:28: And then i think that the team needs to look at as whole.

00:50:32: I wouldn't just hire one specific type, but actually look at how things complement.

00:50:41: And of course people move on and they change as well.

00:50:44: so therefore that is also a little bit of constant change.

00:50:48: But i would always try to find for pretty much any role, right?

00:50:55: People that are actually able to do the next step up as well.

00:50:58: To have actually proven whether they've had experience or not is a different thing part of it.

00:51:03: this could be what you can give here and getting an experience when taking bit risk.

00:51:09: but looking at people who always pushed boundaries throughout their careers have that sort of hunger to grow, right?

00:51:17: Because it's the nature of a growth company.

00:51:23: And I think... Yeah!

00:51:26: To your point they can deal with this change.

00:51:30: It is sometimes tough when things don't change and you're done at ten o'clock at night then we still need do it again.

00:51:37: or actually you know, maybe come with an even better idea to kind of position something in some way right and then yes it's a lot of work.

00:51:45: And that's our church.

00:51:46: avoid these types things but they do happen.

00:51:49: I mean when they happened any the team too To deliver.

00:51:53: so that's Dennis is a given thing.

00:51:56: how are you thinking about team?

00:51:58: i think for core tasks within finance like knowing the numbers, forecasting and also supporting the investor story fundraising.

00:52:14: I would always have it in-house i would say And I will look for people who can develop into a new role but they've done certain part again because you don't believe that you can afford to have someone.

00:52:30: any of the aspects, so it's a bit like what you said.

00:52:35: and then for more functions that are not core.

00:52:39: Accounting is also always by your build question because when I have people who want to develop them or provide an opportunity in their career to grow sometimes they can't do everything involved yourself also, and then sometimes buy is a good solution because there are people out here that have done it one hundred times.

00:53:09: And they know how to navigate this fast growth environment.

00:53:12: so I think that's always the question I ask myself do i really need to have in house?

00:53:17: Is it process that im doing once per year or can maybe outsource this?

00:53:22: This really core Or someone else grow into it its half-half at first.

00:53:28: And then I think the laws, but also really important part are consultants.

00:53:33: In a fast-growing environment once in awhile you need consultant for system implementation or one time thing.

00:53:41: and there i tend to work with my personal network that is built over years always same people who make sure it's delivered what's supposed to be delivered in the time that we agreed, and you don't have a lot of time.

00:53:58: getting to know company is one thing but get into now.

00:54:00: The whole team then how your work together and I've made good experiences with that off working with the same people also if it isn't different environment or if they are grown on move somewhere by.

00:54:13: try to use my network as much as i can and am also generally interested in getting too no people in within the same environment because you never know when your cross.

00:54:23: And how did it end up being an environment that you're not familiar with, like a different country or how do they actually then deal with them?

00:54:33: Good question!

00:54:34: You start somewhere.

00:54:35: networks I think also play and important role Or someone always knows someone in that country.

00:54:46: You just

00:54:46: need to trust the person, they stand by their own name not recommend you somebody

00:54:54: That

00:54:54: doesn't deliver right?

00:54:55: So this is important bit.

00:54:58: so don't take any recommendation because somebody know's somebody.

00:55:01: but actually I think thats worth digging Into right in terms of like.

00:55:07: yeah, I

00:55:07: just knowing somebody but have you actually worked with them after delivered?

00:55:11: Like do they actually personally would he actually vouch for Them to actually deliver into the job in time and on cost and then our own quality And all of this of the metric.

00:55:21: That's maybe one thing.

00:55:22: that too To be aware off

00:55:25: Yeah and if it doesn't work, then also to say now we take the cut.

00:55:31: I mean its same.

00:55:31: in business not every initiative or everything you try works.

00:55:37: That is also something where I think, sometimes step back a little bit.

00:55:42: Is this setup really working for me?

00:55:43: or am i now involved in some things way too heavily?

00:55:47: because uh...I had resource topic with an outsourcing provider that didn't solve?

00:55:53: Because it wasn't my number one priority.

00:55:55: and then all of sudden the pain point becomes big enough.

00:56:00: so you solve it.

00:56:00: So saying no was definitely another thing to be able do.

00:56:05: So

00:56:07: how do we conclude?

00:56:08: Because I think, uh... We're supposed to talk about scaling finance and i would say we've alluded too many different aspects.

00:56:16: And it's a challenging ever-evolving sort of jigsaw puzzle that you are facing this.

00:56:24: Well what will be your conclusion on all right or ultimate advice for the audience?

00:56:35: Not sure whether they have an ultimate advice.

00:56:38: All I can say it's a really interesting role, especially in a faster changing environment.

00:56:45: and what is key to actually engage with the network of people who've done before?

00:56:52: That something that i'm constantly doing because there are alot things that never been done don't know anything about.

00:56:59: trying to find someone who has done Brings you forward brings the company forward.

00:57:07: so I would be keen.

00:57:09: What's your go-to source?

00:57:11: That's my go to source.

00:57:12: or Is there someone in our environment that you say hey, this is a person or a source could be a newsletter Or anything whatsoever.

00:57:20: did you listen too?

00:57:21: think it sits.

00:57:22: It's more like number of different contacts for four number different problems right and then i think its also.

00:57:29: No, I think the one thing i was actually going to say slightly different.

00:57:33: One should get advice from a broad range of things and you still need to draw your own conclusion that once again want to reflect on this earlier question about how do you manage personally with all these things?

00:57:48: And part what is also very important too take step back right now.

00:57:52: would Maybe one sort of advice also for better?

00:57:57: does junior people are more senior people and actually taking that step.

00:58:01: And then sometimes it's in the gym or something as you go for a hike and so on, but at least I never really stop thinking about.

00:58:08: So I just subconsciously unconsciously and so right?

00:58:11: But But sometimes actually the best idea is really common when you're slightly removed.

00:58:16: And if your only in there, always into analysis paralysis and you are not taking that step back like does this make us a whole sense right?

00:58:24: Yes I would to add i always ask myself the question Does it move the needle?

00:58:30: because its very easy to get hooked up into something which may not add or correct especially in finance.

00:58:36: You also of course environment.

00:58:38: these people want be accurate.

00:58:40: This is their role.

00:58:41: you want to be complete

00:58:42: but then I

00:58:43: always go home and say does this move the needle?

00:58:46: am i working on the right topics?

00:58:49: And, uh...I found a way that works for me.

00:58:51: so every Monday morning tell myself what are my priorities for the week and then every day in the morning.

00:58:58: I'm also someone that i'm engaged easily.

00:59:02: I like to explore things, I'd like to have things correct.

00:59:05: so everyday in a morning ask myself... What am I working on today?

00:59:09: Does it really move the

00:59:10: needle?".

00:59:13: Probably one of the major

00:59:15: and everybody should ask themselves that question, right?

00:59:17: Nobody should feel like well.

00:59:19: I'm just working on this piece of Accounting right there.

00:59:22: think then they're exactly in In all roles right to do less or a greater extent.

00:59:27: but i think Everybody can actually move into That direction.

00:59:30: And part Of that could be as simple as Like.

00:59:32: i've seen people getting totally stuck on it on A number Right and then they just kind of like that.

00:59:38: They don't actually see the number in it, but everybody should train themselves to take that step back seat into context right or those who build tax for them get stuck on the nitty-gritty deal.

00:59:50: you do need to take a step back.

00:59:51: I think thats ultimately what makes people take their next steps.

00:59:57: A macro perspective again does the whole story makes sense right to do the number?

01:00:04: numbers always tell a story as well.

01:00:05: Right.

01:00:06: what is this story that we're actually seeing?

01:00:09: What are they the insides of generating and then only comes from yes you need two hard work, he needs all of these things so that it's as correct if I can be like us as we discussed.

01:00:20: but You know, in the bigger picture and I think everybody that is specially in finance right you have a very privileged insight into.

01:00:28: Into to company works and then if your really curious right?

01:00:32: Then it's not just about this ebidades or that but actually why isn't there which?

01:00:37: which are the drivers of businesses where they're the margin drivers and so on?

01:00:42: i'm actually getting curious about these things especially small organizations maybe more easily possible than large organizations with them.

01:00:49: That's what would encourage people.

01:00:51: Keep that curiosity, take that bigger perspective and keep thinking about the real challenge.

01:00:56: And I like your perspective of are you moving a needle?

01:01:01: Data is important but even more important it's the context... ...the context of it..I totally agree to that!

01:01:09: Are we moving our

01:01:10: needle?!

01:01:11: And if you're not, why not?

01:01:13: So hopefully we move the needle tonight.

01:01:16: I hope so!

01:01:16: Given people some food for thought.

01:01:18: and always happy that people reach out.

01:01:23: but think about your businesses.

01:01:26: drive them forward.

01:01:27: It's exciting entrepreneurship.

01:01:29: it is super-exciting.

01:01:30: You need all sorts of different elements including the CFOs.

01:01:34: Hopefully The AICFO will come.

01:01:38: then we can finally just sip cocktails on a beach and then we're done.

01:01:44: I'm not sure about that, maybe than you are lonely because i think there someone needs to translate the numbers into this story.

01:01:54: but yeah we can see more cocktails... But We do it already today!

01:01:57: Because we only work on stuff that move the needle sometimes.

01:02:03: Thanks for listening in.

01:02:04: Thank You.

01:02:06: We hope you enjoyed this deep dive into scaling finance as an organization and going through the different matters of modern CFO, forecasting & aligning KPIs.

01:02:16: Managing fundraisers in capital structure as well.

01:02:18: finding a complementary team to build strong backbone for the finance org.

01:02:23: that holds everything together!

01:02:25: If have any comments to make feel free to send them to fabanatunicornbakery.de or comment on YouTube or Spotify.

01:02:31: we would be happy even deeper into these topics.

01:02:35: Thanks again to our friends from SAP for startups who helped us set up this episode and bring together Fabien and Remo, thank you.