Last April, I gave a presentation to the employees at BrandYourself, where I serve on the Board of Directors. We were talking about creating a strong company culture, but I also wanted to give members of this growing online reputation management service a sense of what happens on a Board of Directors. I thought they might be curious about the kinds of business decisions that come into play when advising a startup for long-term growth and profitability.
One of the exciting things about talking with people who choose to work at startups over larger companies is how curious they are about all parts of the company. There’s a refreshing sense of transparency in the startup world, where it’s often all hands on deck. As such, I came away from meeting with BrandYourself employees impressed by the questions they had asked. What follows is a distillation of our discussion, with answers that I’ve been able to reflect on more in my continued role as a board member since then. I thought the resulting dialogue would be of interest to others in the startup world who may be looking to assemble a great Board of Directors or simply to consider entrepreneurship from another perspective.
1. How has your finance background been useful in assessing the viability of startups?
In addition to understanding the fundamentals of a company’s financial statements, it is critical to understand key metrics associated with SaaS (Software as a Service) companies. The key dimensions I focus on are the size of the market opportunity, the quality of the management team and investors, the quality of the product, and the metrics / unit economics. It’s ideal to have strong indicators across all of those dimensions.
2. Tell us about your role as CFO at HubSpot, where you supported the company’s rapid growth from a Finance and Systems perspective.
In the early days when I joined, HubSpot had 30 employees and was at a $1M revenue run rate. I was tasked with building out the accounting and finance team, along with managing the rest of G&A including HR, Legal, Facilities, etc. In addition a key responsibility was putting together the vision for accounting and finance systems that integrated with the company’s infrastructure. Hiring a great staff to help execute on the system’s vision was critical. Meeting all of the accounting requirements—like successfully completing the annual audit—was another big milestone along the way. By executing these plans with a lot of hard work, we were able to support the company’s growth to $100M in revenue and 700+ employees during my tenure.
3. How did you come to be on the board of reputation management start-up BrandYourself, and what has that experience been like?
I was introduced to a BrandYourself BOD member via a mutual colleague who was an investor in my company. BrandYourself was looking for an independent BOD member who had experience in supporting the rapid growth of a SaaS company and also has knowledge of the Marketing space.
4. Can you share an insider tip on turning a great idea into a successful business with a sustainable business model? Maybe something that you feel is not done enough in the world of startups?
An old adage that folks always cite but often times don’t execute is to hire people that are smarter than you. That is a huge focus of mine when building out teams to help support the rapid growth of software companies.
5. How do you see a CFO’s role in shaping the short and long-term success of a tech startup?
In addition to managing all of the blocking and tackling related to the accounting and finance teams, the CFO must also be skilled at being the liaison for all of G&A during the early years. The most critical way a CFO can help impact a company’s ability to scale is by focusing on supporting the Operational and Strategic decision making within the company. By being a strong business partner to the CEO and the rest of the management team, a CFO can really make an impact and help the company achieve those goals.
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