CFO THOUGHT LEADER

Back in 2014—when Guy Blanchard first entered the CFO office at AeroFarms—the indoor vertical farming company had roughly 20 employees and a commercial farm prototype under construction.

Seven years and four rounds of private funding later, AeroFarms has recently broken ground on its third commercial farm in Danville, Virginia, and a research farm in Abu Dhabi.

Meanwhile, this past March, Aerofarms demonstrated that its appetite for innovation extends beyond farming techniques when it announced a merger with Spring Valley Acquisition Corp., a SPAC that the company now expects to use as a vehicle to go public.

“Spring Valley prefers growth-stage companies that don’t have any technology risk and can just focus on the execution part of the equation,” says Blanchard, when asked how the talks with Spring Valley had first gained traction.

"They were a great match for us, and this allowed us to narrow the timeline and announce the merger in an accelerated way," explains Blanchard, who notes that the merger, once closed, will provide $357 million in gross proceeds and empower AeroFarms to execute a business plan that involves the opening of vertical farms across the country. –Jack Sweeney

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When marketing campaigns get old, they’re like polyester leisure suits that seem to fit okay but look awful, explains finance chief Darrell Cox of Vena Solutions, who credits finance with helping Vena to empty its closet.

Or, to put it another way, Cox credits finance with helping Vena to fail faster.

“The earlier you know that you should stop investing, the more successful you will be at failing efficiently and having your experiments be effective,” comments Cox, who says that such experiments are frequently conducted in collaboration with the sales team, as finance seeks to lengthen its lines of sight into the  sales funnel.

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“The further up you get in the funnel, in terms of being able to analyze where your sales leads are coming from and what your conversion rate is going to be, the more successful you can be when it comes to failing fast and knowing where you should be spending,” observes Cox.

Still, certain finance teams are better prepared than others to ascend the funnel. According to Cox, finance teams need to understand that they are not climbing the funnel in order to make business decisions but instead to influence them.   

“How do you influence and lead others without friction? You put yourself in their position and begin by assisting them,” explains Cox, who notes that the most effective finance people begin by understanding the roles of others.  

Says Cox: “If you can make their job easier and make them more successful, they will start coming to you.” –Jack Sweeney

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Featuring the Workplace Champions

CFO Arleen Paladino of Crum & Forster

CFO Guy Blanchard of Aerofarms

CFO Mike Rasic of Synapse

CFO Ross Tennenbaum of Avalara

Chances are that CFO Louie Reformina never expected to be in the rolling papers business.

Having advanced down a career track populated with different private equity firms, a stint at Goldman Sachs, and a Stanford Business School degree, Reformina could have landed inside any number of industries offering him multiple C-suite doors of entry.

However, not unlike the pick-and-shovel entrepreneurs who once outfitted troves of Gold Rush  prospectors, Reformina is confident that his arrival inside the CFO office at Turning Point Brands (NYSE:TPB) is well timed for an uptick in cannabis sales due to the industry’s quickly changing regulatory environment as well as public perception.   

In addition to cannabis, Turning Point, a marketer and distributor of “alternative smoking accessories,” is now seeking to satisfy its appetite for growth inside a number of product categories such as cigar wraps, hemp paper and paper cones.

“The majority of our profits now come from our Zig-Zag brand of rolling papers and wraps products—we have now put fixes in place to grow the business to where we can now take advantage of the tailwinds in cannabis,” says Reformina, who first joined Turning Point as vice president of business development in 2019.

“There’s the changing regulatory framework, and then there’s the changing consumer framework,” observes Reformina, who quotes recent research showing that 7 out of 10 Americans favor legalizing cannabis at the federal level.

“The perception 10 or 20 years ago was that cannabis was a drug,  whereas today there is a health and benefits  perception to cannabis, and this has been accelerated in part due to the pandemic,”  explains Reformina, who anticipates a domino effect in the wake of New York and Virginia joining the list of states where cannabis is already legal.

“States will just not want to lose the tax revenue that cannabis will be generating,” adds Reformina. –Jack Sweeney 

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Not unlike other finance leaders, Nitro CFO Ana Sirbu wants you to know that she’s a “prioritizer.” Both personally and professionally, Sirbu has created a list of objectives that never strays far from her mind’s eye.

Meanwhile, she undoubtedly keeps a second list—a listing of key results.  

“Effective key results are specific and time-bound, aggressive yet realistic,” wrote John Doerr, the Silicon Valley venture capitalist, in his ode to OKRs (Objectives and Key Results) Measure What Matters (Penguin Random House, 2018).  

Learning how items move from the first list to the second is one of our objectives in talking with Sirbu, a steely-eyed Silicon Valley CFO who’s known to bring a vice-like focus to key results.

By way of introduction, she names past affiliations (Google Capital, Silver Lake Partners) to expose her path to the CFO office of fintech BlueVine, which she joined in 2016 as a vice president of finance and capital markets.

“When I joined BlueVine, the company had just over 50 people, and when I left, we were at well over 400,” explains Sirbu, who says that over the same time, the fintech’s revenues grew by thirtyfold.

“One of my core areas of expertise is to lead finance from all its aspects through very rapid growth, and at Nitro my goal is to replicate this trajectory,” comments Sirbu, who tells us that her own insight into scaling companies benefited from her time at Google Capital (now Capital G), where from time to time she found herself seated beside some of Google’s top growth-minded leaders as her investment team met with the management of different companies “post-investment.”

“They would pair very senior Google executives with a company to speak about whatever area the company was in need of input on the most,” recalls Sirbu, who credits Google culture and its frenzied focus on OKRs with helping her to home in on growth companies as well as the unique role that CFOs now play when it comes to helping companies to scale.

“OKRs drive a lot of great focus throughout the organization when it comes to achieving objectives and being deliberate in terms of where I spend my time and where my team spends their time,” comments Sirbu, who helped spearhead the OKR adoption process at BlueVine as well as Nitro.

Says Sirbu: “Being deliberate is something that is very core to how I think in general. We want to make certain to get the important things right and not focus on things that are less impactful or less important.” – Jack Sweeney

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Looking back, Mike Rasic says that his entry into the world of tech start-ups got kicked off with a phone call that he almost didn’t answer.

“I have a strict policy that if I see a phone number popping up on my mobile that I don’t recognize, I just don’t pick up,” explains Rasic, who goes on to say that the voice on the other end belonged to a head hunter who subsequently gave him the scoop on a CFO position.

“It worked out,” reports Rasic, a former PwC partner who is currently the CFO of Synapse, a fintech start-up that can now be counted as Rasic’s fourth CFO tour of duty.

Asked what advice he wishes that someone had given him upon entering the CFO office for the first time, Rasic replies “timing matters,” before explaining further: “I joined a mortgage company as CFO at the onset of the mortgage crisis.”

Besides some of the more challenging lessons gleaned from the mortgage crisis, Rasic says that he exited the experience with two key takeaways that he has applied to every CFO role since.

“First,” he notes, “I went into the role thinking that my world was predominantly going to be finance. Don’t think that way! And make certain that the role is expanding as much as you think is necessary.”

Rasic’s second takeaway once more highlights finance’s broadening influence.

“Don’t underestimate the responsibility of the role. You are going to make decisions that impact peoples’ lives for good and bad,” explains the finance leader. - Jack Sweeney

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In 2008, as the subprime mortgage crisis began turning the Street’s brash dealmakers into a squeamish clan of risk-averse bankers, Tim Murphy, an associate at Credit Suisse, decided that it was time to try some slots. Lots of them.

“I took a gamble in the casino space—it was probably one of the best decisions that I have made in my career and one the best decisions that we have made as a family,” explains the finance leader, who accepted a director of finance position with Cadillac Jack, a fast-growing slot machine manufacturing company based in Georgia.  

At the time, Murphy’s wife (the couple had met at business school) was working for The Coca Cola Company in Atlanta, a factor that the finance executive says helped to hedge his career bet.

“I had opportunities to join investment banks in Atlanta and other large organizations, but we made a conscious decision that given the fact that she had a job at a very large and stable company, I could take a gamble with mine,” says Murphy.

Also influencing Murphy’s decision was the understanding that he would be reporting directly to the CEO, a former investment banker whom Murphy characterizes as a “hard charger.”

Besides helping Cadillac Jack to navigate gaming’s unique compliance highway, Murphy focused on finding ways to grow the business and make it more profitable.

“In about 3 years, we got to the point where we were comfortable with the business and began looking for an exit,” recalls Murphy, who began initiating discussions with potential buyers and lending partners.

Ultimately, Cadillac Jack was sold to Canadian gaming company Amaya for $167 million.

“It was just great experience for me in leading up to becoming a CFO,” says Murphy, who would join Amaya as director of corporate development, where for roughly a year he scouted out new purchases and divestitures for the publicly held firm before entering the CFO office of Atlanta-based REPAY, a publicly traded payment processing company.

“I joined REPAY in January 2014 just after the firm had taken in its first institutional private equity capital—prior to that, it had used really just family and friends’ capital,” continues Murphy, who over the past 7 years has helped the firm to unlock both private and public investment capital as it uncovered new avenues for growth.

Among REPAY’s transaction milestones was the sale of a controlling interest in the company to Corsair Capital in 2016 and a subsequent public offering executed via a SPAC business combination.

“Corsair was able to get a lot of liquidity at the closing of the business combination with the SPAC, and they have since fully exited the business at a much higher stock price than what it was when they entered,” notes Murphy, who adds that to date REPAY has leveraged its access to the public markets to help execute five acquisitions, helping the firm to expand into a number of new verticals.  –Jack Sweeney 

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When Rob Krolik agreed to join us for a CFO (emeritus) episode, we expected to hear about the successful business turnaround chapter that he added to his finance resume while CFO at Move.com. We also anticipated learning about his years at Yelp, where—back in 2011, as the firm’s new CFO—he was credited with helping to lead one of the year’s most successful IPOs.

While Krolik was only too happy to share a few thoughts regarding both of these chapters, he also reflected on a place in time about which we never expected to hear—namely, when a speech delivered by the outgoing president of his international youth group turned out to be plagiarized and in fact a word-for-word copy of an address given by another retiring president a number of years earlier.

“It was a very moving speech and I had put the guy up on a pedestal, so it taught me not to put anyone up there again,” explains Krolik, who notes that this experience from his teen years led him to enter the professional world with a self-mandate to treat people as individuals.

“It actually allowed me to treat people equally at the different jobs I’ve had. Whether it was a CEO or COO or the lowest-level accountant, they were going to be treated all the same,” he continues.

Still, Krolik’s egalitarian aspirations have not stifled his willingness to offer generous praise to past mentors and bosses alike, among whom is counted finance executive Robert Swan, the former CFO of eBay (and more recently Intel CEO), who is allotted perhaps the lion’s share of Krolik’s kudos.

“He was able to explain things in a way that made sense to everyone in the room and not just the tech people and not just the finance and accounting people,” recalls Krolik, who joined eBay after the firm acquired Shopping.com, where Krolik had served in his first CFO role.

Krolik would stay on at eBay as a vice president of finance for another 3 years before entering the CFO office at Move.com. –Jack Sweeney

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In the early 1980s, when Arleen Paladino joined Crum & Forster as a 21-year-old internal audit trainee, she was frequently sent to remote office locations to complete audits of financial statements the data from which were then transferred to keypunch cards and fed into a giant mainframe at the insurance company’s Morristown, New Jersey, headquarters

“While this might seem like a long time ago, we just decommissioned the mainframe last year,” says Paladino, who entered Crum & Forster’s CFO office in 2017 after serving as a senior vice president of the company’s internal audit function.

Having only recently bid farewell to mainframe technology, Crum & Forster is not likely counted among the industry’s tech savvy innovators. Still, evolution is arguably what Crum & Forster does best. The insurance company will celebrate its bicentennial next year.

“Understanding the systems and how the processes worked together really helped me to understand the business model,” continues Paladino, who would advance upward as she took on more management responsibilities, including helping to spearhead compliance initiatives such as SOX, which garnered the attention of company board members.

Meanwhile, as evident as Paladino’s maturing leadership qualities may have been, her focus on systems and processes at times arguably may have obscured what might be her 40-plus-year career’s greatest contribution to the company.

“When I started, I was the only female auditor in the department,” explains Paladino, who recalls engaging with very few woman executives during these early visits. Much later, at about midstream in her eventual career of more than four decades, Paladino found herself married, a mother of two under the age of 6—and struggling to achieve work/life balance.

“I had a CFO at the time who I did not think would want me to reduce my hours, so we had a very candid conversation and I explained my situation,” remembers Paladino, who ended up securing an hours reduction in her workweek and thus illuminated a path for others to follow.

Says Paladino: “Part of the draw for me has been to achieve this work/life balance and have a culture that supports it.” –Jack Sweeney

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Within 4 months of her 2019 arrival inside BDSI’s CFO office, Terry Coelho had spearheaded a product acquisition and managed a successful equity raise—two finance milestones that would produce generous sales tailwinds for the specialty pharmaceutical firm.  

BDSI would experience 100% net sales growth in 2019, followed by 40% net sales growth in 2020.  Such sales momentum recently led BDSI to issue a press release praising its “new commercial team” and at the same time announcing that Coelho’s CFO title would now include the designation “executive vice president.”

For Coelho, a seasoned finance executive who spent more than a decade serving in a variety of senior positions inside Novartis and Sealed Air Corp., the call to leadership at BDSI afforded her a wide berth from which deliver results that are now arguably visible to all.

Still, even this success chapter must compete for our attention when we hear about a promotion that she received from candy and pet food giant Mars Incorporated early in her career. At the time, when Coelho was in her early 30s she was asked by John Mars (currently chairman) to relocate to South America and build a plant to start up Mars’s confectionery business in Brazil.

“When the plant concept was coming about, John Mars said to me, ‘You can do this job,’ and I kind of looked at him and thought to myself, ‘Why not?,’” says Coelho, who had first gotten her FP&A acumen noticed inside the corporate planning function of  Mars’s McLean, Virginia, headquarters.

Years later, as she prepared to return to the U.S., the Brazilian team presented her with a photo of the former cow pasture that the Mars plant was then occupying. After a number of expansions, the factory and Brazilian business operations under Coelho’s leadership had grown to provide jobs to 200 people.    

“I don’t think that most companies would have given someone with my experience—at that point in my career—that kind of an opportunity. It has really shaped whom I’ve become. I have a breadth of experience from having run an entire business, and when you build it, you know it even better,” explains Coelho, who, after returning to the U.S., would hold a number of strategic finance positions, including CFO of Mars Direct, a newly formed direct-to-consumer business unit that would establish itself as one of the company’s future growth engines.  –Jack Sweeney

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