CFO THOUGHT LEADER

Had the opportunity to work in the treasury department at American Express arrived 6 months earlier, there’s a chance that John Herman may never have landed in a CFO office.

“Treasury was an area that I was fascinated by,” remembers Herman, who—after having spent a decade at American Express—was given a “package” in 2009 when the financial crisis mercilessly bore down on the card services giant.

However, in April of 2010, Herman punted the Amex treasury opportunity in order to accept an FP&A position at Yodle, an online marketing company that was generating roughly $50 million in annual revenue.

“I decided that I wanted to work in an organization where I could make an impact, and I felt that it was time to take a risk in my career,” recalls Herman, who would report directly to Yodle’s CFO and for the next several months be “a department of one.”

“There was this opportunity to build out my team and take on new roles and learn really quickly,” recounts Herman.

Along the way, Yodle would make multiple acquisitions and grow to more than $200 million in annual sales before being acquired by Web.com in early 2016. Herman had steadily advanced upward and eventually into the CFO office, where he ultimately led the due diligence and oversaw the sale process for the Web.com sale.

“It ultimately came down to the fact that it was the right time to sell,” comments Herman, who within 6 months of the Yodle sale closing garnered his second CFO appointment at early-stage SaaS developer Movable Ink.

Six years later, Movable Ink has surpassed the $100 million mark in annual recurring revenue and was recently valued at $1.3 billion—joining a select class of marketing technology brands.

Asked whether he had ever contemplated becoming a CFO during the first half of his career, Herman replies, “I definitely didn’t grow up saying, ‘Someday, I want to be a CFO’—it’s really been a journeyman’s trip to where I have now arrived.”  –Jack Sweeney 

“At first, it was about building the relationship with the executive team so that they understood how important it was to understand how the company was performing on a daily basis,” explains Ante, who equates his task with shortening the distance between management and the company’s data.

“At the time, we were just piling a set of numbers and metrics into Excel spreadsheets daily and distributing them,” continues Ante, who upon his arrival was given the title of vice president of analytics.

“We didn’t know where all of the data was, and we didn’t know always what it meant,” reports Ante, who notes that sometimes one manager might be sharing certain data that contradicted numbers being disseminated by another.

For Paycor, the solution was to adopt a new data management framework, a process that began with first clarifying what the company wanted to know about its performance and then identifying which metrics would best reveal this information.

According to Ante, “You begin by asking, ‘What should this metric really show?’ And then you say, ‘Okay, now, where does this data come from? How do we access this data?’’”

Back in 2017, Ante recalls, most of Paycor’s data resided within a single SQL server.

“At every turn, this meant that somebody had to go in and figure out how to write SQL queries and pull the needed data together,” remembers Ante, who adds that the company subsequently upgraded its data infrastructure.  

“The most important thing is the ability to bring the data together into a place where people can access it and measure it and put the right level of governance around it,” comments Ante, who observes that as more managers have gained confidence in the data and grown to better understand the information being provided, they’ve also grown accustomed to monitoring the metrics daily.

Says Ante: “It can take a long time—it’s a cultural shift.” –Jack Sweeney 

It was in the late 1990s when public accountant, savvy networker and future CFO April Downing decided that it was time to leave Dallas.

“I had cultivated my network there really early—there was a group of friends from PwC whom I regularly attended a book club with, and later we would all go on to different tech firms,” remembers Downing.

However, unlike those of some of her tech-minded PwC colleagues, Downing’s future plans did not include Dallas or Silicon Valley.   

“It used to be that I had to say Austin, Texas—but everyone knows where Austin is now,” comments Downing, who accepted an assistant controller role at Motive Communications, an Austin tech firm—only to lose it upon her return from maternity leave.

“I thought that my life was going to be as an accountant, but they said: ‘You can be the finance person,’” recalls Downing, who credits the early job pivot with opening the door to a succession of senior finance roles that included the position of acting CFO.

In many ways, Downing’s Motive chapter exposes the historic connection between Austin’s high tech pioneers and its wide-body tech hub future, for it was at Motive that Downing first crossed paths with notable Austin investor and former Dell CFO Tom Meredith, who for a time served as chairman of Motive’s audit committee. It was also at Motive where she first connected with Kip McClanahan, whose firm Silverton Partners is credited with having helped to lead the next wave of Austin technology investment. Years later, McClanahan would help to recruit Downing to fill the CFO role at WP Engine.  

Comments Downing: “One of things that I’ve been trying to do lately is to foster connections with some of the people who are new to Austin in order to share our heritage that says, ‘We’re all here to do better together!’” –Jack Sweeney 

Back in early 2014, the management of Paydiant, a 4-year-old mobile payments start-up, believed that it was still several years away from engaging with acquisition-minded bankers.

Nevertheless, when PayPal came calling, the Paydiant team decided that they were worth a listen.       

“Even though it was still an early stage for us to be in to be thinking about exiting the business, it was just a super interesting opportunity,” remembers Melinda Smith, whose CFO resume today lists the 2015 sale of Paydiant to PayPal as her third early-stage exit.

“If you had asked me when we first got acquired whether I was likely to stay inside a big, publicly traded firm like PayPal for long, I would have said ‘No,’” continues Smith, whose postmerger career with PayPal lasted more than 5 years and opened doors for Smith in surprising ways.

“What we determined was that our team, with all of its early-stage experience, could be really helpful in-house,” remarks Smith, who notes that at the time PayPal had only recently begun operating as a public company. It was felt that “noise from the Street” could become a distraction for PayPal’s smaller businesses like Paydiant, she adds, as well as for their mobile payment unit Venmo, which had joined the family in 2013 as part of PayPal’s acquisition of Braintree.

“We ended combining the teams, and I got the opportunity to be CFO of Venmo,” comments Smith, who would serve as Venmo’s finance chief for the next 3 years. –Jack Sweeney

Steve and Jack discuss how successful financial planning teams are always looking to "get in deeper" and bring new insights to the surface. Featuring commentary and FP&A insights from Planning Aces: CFO Adriana Carpenter of Emburse, CFO Kent Kelley of Unanet and CFO Brandon Maultasch of Moloco.

Having grown accustomed to charting the careers of our finance leader guests from their early professional days up through their entry into the CFO office, we did not change course for Elaine Sun, an accomplished investment banker turned finance leader who last month stepped into her third successive finance chief position at Mammoth Biosciences of Brisbane, California.  

For Sun, the third time is undoubtedly the charm, for it would be difficult to imagine a more compelling start-up for a CFO of any pedigree to have joined than Mammoth, the celebrated unicorn cofounded by Jennifer Doudna, the University of California professor who shared the 2020 Nobel Prize in Chemistry for pioneering work on CRISPR-Cas9, a method of editing DNA.

No matter what the tenor of Mammoth’s future achievements may be, the intersection of Sun’s professional life with Doudna’s will likely come to dominate Sun’s professional narrative as the finance leader summons her past finance experience to build and scale a financial function capable of helping Mammoth to fully realize the commercial application of Doudna’s work.

Perhaps it should come as no surprise, then, when Sun floats a recommendation for The Code Breaker, the book written by Walter Isaacson that charts the path to Doudna’s scientific breakthrough. Still, her reference reminds us that another exciting chapter is currently being written—the one where science and finance meet. –Jack Sweeney

Elaine Sun: Mammoth Biosciences is based in the Bay Area—Brisbane, California. We were cofounded by Jennifer Doudna, Nobel laureate for her fundamental work in CRISPR gene editing. The other cofounders were Trevor Martin, Janice Chen, and Lucas Harrington.

It is a very exciting company. I could not be more thrilled to be partnering with them and coming on board as COO and CFO of the company.

Anyone who’s followed the biotech industry knows that there have been these different technologies that have enabled new therapies. CRISPR gene editing is this next frontier.

As someone who’s been in the life sciences industry for a long time and seen technology wax and wane, I think that this is very exciting in enabling therapeutics as well as, potentially, curative therapies.

On the diagnostic side, our vision is to leverage this CRISPR enzyme to be able to develop next-generation diagnostics with the accuracy of molecular diagnostics but in the palm of your hand at the point of care or even ultimately in the home.

This is an area that has captured the imagination of investors, and there’s been a lot of interest in this space. The early folks that have been advancing the field in CRISPR have been focused on CRISPR-Cas9. These tools or systems have certain applications that are ex vivo, or outside of the body.

We believe that our ultra-small CRISPR systems could better enable in vivo therapies. We’re also leveraging them for our diagnostic applications.

There is the potential to leverage CRISPR technology even in areas outside of diagnostics and therapeutics. The company has talked about potential locations for industrial or biomanufacturing or ag biotech applications.

One of the things that got me so excited about Mammoth was this commitment to advancing the field, to continuing to discover new CRISPR systems beyond CRISPR-Cas9. The intellectual property position that we have is extremely strong, and we have this multidimensionality to our business model, potentially with diagnostics, therapeutics, and more. 

Back in 2001, as the dotcom bubble imploded and the U.S. economy took a downward spiral, Anisha Sood, a recently hired consultant for Accenture, felt fortunate.

“There were rounds of layoffs happening and Accenture was trying to manage it well, but I got lucky because I was in healthcare,” explains Sood, who reports that other practice areas such as technology and media were not so fortunate.

Seven years later, just as Sood had finished logging her first 48 hours as an investment banker with Credit Suisse, Lehman Brothers collapsed—but once more, Sood felt fortunate.

“Here again, I could credit healthcare as being the stabilizing factor, although there were no deals happening, no IPOs or M&A, for about 12 months after I started,” recalls Sood, who in the years that followed would lead a variety of health sector transactions for the bank before moving back to hometown Seattle to begin a multichapter career as a venture investor in healthcare.  

“When I left Seattle in the ’90s, it was kind of a small town known for its alternative rock, and now I returned to find this bustling world of startups and spinoffs and large players that had made a reinvestment in healthcare and seeded this entrepreneurial biocommunity,” observes Sood, whose venture investing career chapter—unlike those that preceded it—appears to have opened unaccompanied by the peril of economic collapse.

There were other differences as well, for it was during Sood’s venture investing days that she first began to acquire the escalating desire to build things that over time fueled her ambitions to become a CFO.

Along the way, Sood says, she came to realize that most often it was finance that was first to expose whether or not a company was going to be successful. As she likes to put it: “Finance is the canary in the coal mine.”

According to Sood, the welfare of the bond between venture investors, boards, and entrepreneurial founders often depends on a single deliverable that is usually framed by more or less the same query: “Can you provide us with a unit economic model that shows us how profitable or sustainable your clients will be over time as you start to grow?”

It was just such a deliverable that later tripped up the management team of one of Sood’s portfolio companies.

“We realized over time that the company was not tracking toward its numbers—the incremental margin, the incremental sustainability, just wasn’t materializing, and it became clear that there was a flaw in the strategy and underlying business model for the company,” remembers Sood, who adds that the company was ultimately sold for far less than what had previously been projected by venture investors.

For Sood, the experience reveals why finance must always be the canary—and sound off with tough questions that are sometimes difficult to ask.

Says Sood: “How much do we need to pay attention to these numbers? When must we start to call it? If we let things play out, it may lead to an exit that no one wants to see.” –Jack Sweeney

Brett & Jack discuss why a 4-year degree isn’t quite the job requirement it used to be and how finance leaders are reworking their company’s talent equation. Featuring the commentary and insights of workplace champions CFO Brandon Maultasch of Moloco, CFO Steve Vintz of Tenable and CFO Kent Kelley of Unanet.

Will Johnson can still hear the question that momentarily muted a management dinner and prodded the gathering’s executive diners to thoughtfully dispatch an answer.   

“’If you weren’t in your current role, which one—held by a peer at this table—would you assume?,’” recalls Johnson, echoing the inquisitor’s words.

“There were some really surprising answers,” he continues, noting that the head of sales expressed a desire to lead HR.

Still, no answer was perhaps more surprising to Johnson than his own.  

“I actually did cite the CFO role,” comments Johnson, who even now—after having subsequently held three consecutive CFO positions—seems to be a bit surprised at his willingness to supply such an answer that evening.

At the time, Johnson was a senior corporate development executive—albeit with future CFO aspirations but until that night they had been left unspoken, at least in gatherings.

Johnson reports that there was a period in his career when he found it difficult to admit to himself and others that the CFO role was becoming accessible to him.

“Shame on me! I still had in my head an antiquated notion of what it took to become a CFO,” remarks Johnson, who credits a CFO mentor who entered the office from the more traditional CPA route with having dissuaded him of the notion that he too needed to be a CPA.

“The role’s orientation itself had really shifted to where you were spending as much time looking out the windshield as you were in the rearview mirror,” observes Johnson, who mentions that he’s speaking specifically of venture-backed and high-growth firms.   

If Johnson left the dinner with any doubts about having voiced his answer that evening, they likely vanished 6 months later when the company’s CEO, accompanied by a board member, approached him to be the company’s next CFO.  –Jack Sweeney

As we seek to highlight the milestones that mark the path to the CFO office, one of our favorite queries is to ask finance leaders to recall from their career-building years the first time they presented to their company’s board.    

For Adriana Carpenter, memories of that board gathering will forever call to mind ASC 606, the mazelike revenue standard that only a few years ago upended the placid temperament of many an accounting organization.   

“Make no mistake—this was really my first time, and I was delivering bad news,” recalls Adriana, who perhaps not unlike many of her CFO peers received her first “invitation” to address the board regarding a sticky issue, rather than to highlight the anatomy of a strategic win.

“A majority of our revenue came from on-premises software subscriptions, and 606 dramatically changed the timing of revenue for these types of subscriptions,” continues Carpenter, who for 8 years served as chief accounting officer for Ping Identity, a developer of identity security software.

For Ping, the timing issue meant that the company would be required to take a big cash hit on the eve of realizing its goal of selling shares to the public.

“606 distorted our revenue and EBITDA numbers, which really forced us to figure out how to explain to investors what was really happening in the business,” comments Carpenter, who entered the boardroom that day with a portfolio of accounting experience that any board worth its salt would have savored.

Carpenter had arrived at Ping 5 years earlier, just as the company had begun the tricky journey from being a perpetual revenue model to evolving into the subscription revenue mode.

“Within that first year at Ping, I led the complete overhaul of our quote to cash process, which included everything from revamping how we were selling our software to helping to implement additional software modules to enable the business to scale,” remarks Carpenter, whose tenure as Ping’s CAO involved navigating not only the differences between revenue models but also the differences between owners as Ping went from VC to private equity ownership.   

Then came 606’s timing issue and Carpenter’s invitation from the board. While milestones along the path to the CFO office frequently vary as far as time and place go, Carpenter’s arrival inside the CFO office at Emburse within 3 years of having received Ping’s boardroom invitation makes us think that perhaps timing is indeed everything. –Jack Sweeney