The Job of a CFO at a Scaling Company | Sarah Friar (CFO of Square) & Jason Child (CFO of Opendoor)

TL;DR

Two experienced CFOs discuss their roles in scaling companies, the importance of hiring a CFO, financial discipline, fundraising considerations, and the decision to go public.

Transcript

so we have two amazing CFOs here today who have partnered with their CEOs right from the growth stage and taken company's IPO so we have Sarah who is currently the CFO of square and prior to that was as we be of finance and strategy at Salesforce and started our early part of her career at Goldman Sachs we have Jason who is currently the CFO of ope... Read More

Key Insights

• 💼 The role of the CFO at Square evolved from handling basic finance and accounting to becoming a strategic partner with the CEO, focusing on company growth and founding new products.
• 👥 When hiring a CFO, it is important to look for someone who is not like you and can bring complementary skills and opinions to the table.
• 💰 It is recommended to hire a CFO earlier rather than later, preferably around a year before the company plans to go public.
• 📊 Implementing financial discipline involves choosing and tracking the right metrics that drive the business, and instilling a data-driven culture within the company.
• 🌐 In the case of Amazon, the CFO worked closely with the CEO to ensure unbiased and accurate presentation of metrics to avoid potential biases that might arise from wanting to please the CEO.
• 💼 When considering fundraise, it is important to have accurate forecasting in place to determine the optimal amount of cash the company should have in the bank.
• 📈 With regards to going public, companies should consider market conditions, preparedness for transparency, and the ability to withstand market volatility and scrutiny.
• 🔮 Forecasting accuracy can be achieved by understanding the drivers of the business, breaking down the forecasting process into key equations, and identifying and addressing areas of inaccuracy.

Questions & Answers

Q: When should companies consider hiring a CFO?

Companies should consider hiring a CFO when they need financial discipline, forecasting accuracy, and strategic partnership expertise. It is best to hire ahead of time and find individuals with complementary skills to the CEO.

Q: How can CEOs and CFOs build a strong partnership?

CEOs and CFOs should have a trusting and open relationship, be able to have honest and forthright conversations, and be aligned on vision and goals. Spending time together outside of work can also help build a strong partnership.

Q: What are the considerations for fundraising and going public?

Companies should have a minimum amount of cash on hand to ensure financial stability and should consider market conditions and investor demand when deciding when to fundraise. Going public should be considered when the company has accurate forecasting abilities and is ready to handle the demands and scrutiny of a public company.

Q: How can companies achieve accurate forecasting?

Accurate forecasting requires understanding the drivers of the business, breaking down the forecasting equation, and identifying areas of inaccuracy. Hiring individuals with engineering or financial backgrounds can help with accurate forecasting. Regularly monitoring and adjusting forecasts based on key variables and sensitivities is also important.

Summary & Key Takeaways

• Sarah, CFO of Square, joined the company when it was about three years old and had a team of 14 people. Her role evolved to focus on strategic partnerships and product development.

• Jason, CFO of Groupon, joined the company right after it turned down a $5.7 billion offer to sell to Google. He was responsible for selecting bankers and building a finance team to handle rapid growth.

• When to hire a CFO depends on the stage of the company and its need for financial discipline and forecasting accuracy. CFOs should be hired ahead of time and should have complementary skills to the CEO.

• Forecasting accuracy requires understanding the drivers of the business, breaking down the forecasting equation, and identifying areas of inaccuracy. Hiring individuals with engineering or financial backgrounds can help with accurate forecasting.