Unknown Speaker
This is create the next from Pro CFO partners, where every week we explore strategies and ideas for financial management and growth to help today's businesses but their financial picture in contact with

Chris Bintliff
Chris Bintliff. I'm here with Pat Correa copani. From pro CFO partners. And today, Pat, I wanted to ask you about startups. And in my experience a lot of startups, even if they're just starting their business, but especially if they've got an eye for fast growth, sometimes they they aren't giving the necessary thought to the role of the CFO. Maybe they've got some principles in play. And those are multi disciplinary and multi talented people. They often try to carry I think too much weight by themselves. I wonder if you agree with that, if you agree with that perspective.

Unknown Speaker
Yeah, I totally agree with that. And it's, it's primarily because they have don't usually have too many resources. And they may have a partner, one or two key people, but that's pretty much it and they And generally, they don't really know what it takes to run a business. Thank you. know their product, they know they have a vision for where they're going. But they don't understand how important it is to have a support structure in business to help them, you know, grow from where they are to where they where they see themselves in the future.

Chris Bintliff
And that's what's interesting is they start with a great idea, and maybe some finesse or some natural talent. But it's a rare person who can also understand how to manage the intricacies of business while also being a visionary like that. How How do you find that gets in the way of a startups ability to literally start up when they're not building the infrastructure around them to succeed from the get go?

Unknown Speaker
they very often an entrepreneur looks at what they're doing their idea whether it's for a service or a product, and they think that just by letting people know their idea, that they'll get everything that they need, and that's totally not the case. I mean, it's a rare exception when that happens. And to have, it's really very important to have someone like a CFO, within the framework of the business so that they can help guide them through all the different challenges that they're going to have. And unlike the old days, when a CFO was just considered the guy who might help them manage their cash or find some cash, a CFO does a lot more things these days. I mean, we're very multi dimensional, and I have lots of marketing experience and raising capital working with investment banks or venture capitalists or, or just doing whatever it takes, you know, I ran my own business for many years. So that was totally unrelated to anything financial, I was I actually owned the milk company of selling a new milk product, among other things. So I know what if I know what it's like to worry about your payroll for next week or things that ordinarily you wouldn't you wouldn't get involved in. So Have someone on your team that can support you, they can take away all the stress that goes along with the things that they don't really understand, at same time, put you in a position where you might be able to achieve the things that you want to achieve.

Chris Bintliff
Now, that's interesting. Tell me a little bit more about what I might ask a CFO to do, because part of my problem when I'm starting up, and my resources are so limited, as you point out, is that to be really thoughtful about the investments that I make, especially in the talent in in the people around me, and I think that there's a disconnect that obvious disconnect of investing in somebody else who's really great at that frees up your ability to do other things that you're really great at in the company, but all I'm thinking about is is this the right move. So what can help, like Can I Can you help me build a pitch deck? Can you help me find venture capital? Can you help me close and build relationships with VC if that's where I'm going? Or what are some of the other ways that I don't need to complicate my life anymore because this person So keep an eye out for

Unknown Speaker
me. Absolutely. And those are really important areas that you just mentioned. I mean, if a startup needs money in which one doesn't, they may not even know the steps of what it's going to take to get money, then they probably never heard of a pitch deck very, very often they haven't, you know, he's call it a presentation. But now it's a pitch deck. And essentially, that's what it is you're pitching your product. Now, that's their opportunity to shine. But as soon as someone is interested in what they're doing, they want to see the numbers and they want to see not not what how much you have in the bank. They want to see what your plans are, how are you going to get from where you are right now with this great idea? How are you going to get that to market? How are you going to make it successful? How How are you going to get other people interested in whether it's a customer or other money people, you know, what, what are your plans for the future? How are they going to make money at it is a lot of questions and you know, most If entrepreneurs don't realize the the hurdles are going to have to jump through to get to that point where they can have people invest in their company and risk their money, you know, with them. So the CFO Can, can really help them understand the landscape that they're going to be entering, and and lay out all the things that have to be done and help help produce them all. So that when, when if, for example, if I as a CPA, CFO, walk in with a guy who's got these great ideas, immediately, that guy has more credibility, because if they have questions, all those questions, I have all the answers. And hopefully he'll be able to express most of them. But if not, I'm there and I have the I created the plan helped him create the plan with his ideas. I've put a rationale behind the business. You know, why is this business important? Why is it going to make money? How is it going to make money? And how are you going to succeed as investors That just just the fact that I'm there can help that person get through all those hurdles with a lot greater ease than then if I wasn't there. And then then it's left to their, you know, discretion after that. And if you don't make the presentation properly, you're, you haven't got a chance.

Chris Bintliff
And not only the public facing stuff that you're describing, which is so valuable, but knowing that makes my business so much stronger. Like my, my own sort of, you know, use case for the business and my own business plan. And my own revenue model all becomes much stronger when I've answered some of the central questions that you're asking that might be outside of my area of even interest. And so even beyond the logistics of actually starting up, it sounds like that guidance just helps me build a more sound foundation for why this business exists and how it can succeed in the future. That's exactly right.

Unknown Speaker
And it clearly helps them to understand their own goals. Our own objectives in maybe some more quantitative way, and then they're used to thinking about it. But just having that those discussions helping prepare a business plan does exactly what you said, it gives them an understanding of where they're going and what they're doing. And you've got to feel a lot better about yourself and about your business. If you can see what the what the ultimate results could be on a piece of paper. And once you're once you understand that, if you didn't have enough confidence before, you certainly going to have it afterwards. And that's a really key item that a CFO can help bring to the table for for any startup already fast growing company for that matter. Because, you know, a company can start, they could be doing really well. And they're growing so quickly that they're destroying themselves. They know, they know, they can't keep up with the growth. They can't, they can't build fast enough. They can't. You know, they don't have the people in place to do the things that they need to do. So Again, where to where a CFO who is helping them prepare a plan can really help because they can anticipate many of the things that are going to happen and they, you know, they can have a plan in place to help them grow. Where Where are you going to get all the people you need? How many people do you need? All that stuff can be thought of beforehand? How much money is it going to take? You know, what, what about inventory? Where are you going to where you gonna put all this stuff, you know, etc. Understanding the competition is another area. Very often an entrepreneur, entrepreneur doesn't really think about, but they're out there and they're not going to be happy if you're succeeding. So you, so you better be prepared for that. And how do you do that easily understand what they're doing? And you understand how you're different from them, or you have a better product or what are your What are your competitive edges, all those things are all outlined and understood. You can do a lot of things you can number one real To express what you're doing to everyone, whether it's the public or the customer, or the, or the investors, whoever it is, and you can be prepared to change and, and adjust to a situation very quickly if you anticipate what could happen, you know, so and they don't have to have all that on their head. They're out there trying to just write sell their product or build their business. You have the CFO to worry about all of those things. You know, it's not we're not just an overhead position where we are really a dynamic, an integral part of any young startup. Well, any business but especially when you're at that formative

Unknown Speaker
stage, create the next is brought to you by pro CFO partners who believe every business deserves to work with an expert CFO to guide its success. Pro CFO partners, our expert financial officers network across industries, verticals, specializations and situations, fulfilling the role of a part time CFO with all time commitment procedures. Partners utilizes the innovative and exclusive FGC financial flywheel as a framework that creates momentum to drive your financial functions for sustainable success. Visit pro CFO partners comm to explore how we can implement a systematic and scalable financial system to help you achieve your goal. Pro CFL partners.com it's something that

Chris Bintliff
was in mind for me as you were sharing that was imagine how much more achievable and better organized your 135 whatever your goals are, even your long range exit strategy, when from the beginning, you have guidance from somebody who understands how to ask those questions, why the importance of those questions, how to get the answers to those questions. I think that that is really strong advice. Is there one or two things that you consistently see startups or fast growth, you know, young companies doing wrong?

Unknown Speaker
There are a few things I mean, very often a an entrepreneur. falls in love with their product. And that's great that they have it. They're passionate about it, except that it starts it's it makes them make very poor decisions if they're left, you know, unguided. For example, they think they have the greatest thing since sliced bread, and they want $3 million. And they were willing to give up, you know, 10% and they don't understand that on the day that they're asking for that $3 million. There's no tangible evidence that their company is worth anything. So for them to get any money at that point, without giving away everything is it is a success, you know, but but you have to make a case for it. You know, you have to understand that having a product is good. Even if it's a if it's a completely its intellectual property, so you have the exclusive rights to it even if that's the case. There are people that have much better distribution deals, the new and the ability to get something out there. 50 times faster than you ever could. So that's what you're dealing with, if somebody sees what you're doing and they want to make some version of it and get out there, you know, you're not going to have a chance if you're up against Google or Facebook or, or anybody in any large entity, so you can move you can an entrepreneur can generally move faster than them but they don't have the resources to carry it out. I mean, a classic example is and these are again to the to two big companies. You had a Sony producing a Betamax. And I can't remember who did the the other the American version. Maybe it was an RC I can't remember who did it. But whatever it was, they had a much better distribution arrangement, the United States and Sony. So here was a really it was kind of it really was a superior product, but they couldn't get it on the shelf. You know, at the same speed and level that that, let's say it was ours. RCA was able to do it. And so they never really captured this market. And those are two big entities fighting over imagine a startup trying to deal in that environment. It's very tough. Now you can not that you can't do it, but you have to understand what you need to get there. Like who do you need to align with before you enter that Mario? You know what, you know, it's great if you can have a big player behind you. You know, it helps it helps you get in faster, it helps you get in with, with more, let's call it panache or something. You get in there and you and you can make a splash and you can make something happen fast. Everybody wins. Everybody wins, even if you have to give away a little bit more to achieve that.

Chris Bintliff
fascinating stuff, Pat. I really appreciate the idea that we need a little more pragmatism because you're right entrepreneurs. It's like an extension of themselves when they start of business. And, you know, they burn all the candle ends and all the hours to try and create this thing. And it's helpful when someone can say, that's a great idea. Let's remove our emotions from it for a minute. And let's look at some of these things objectively and see where the opportunities are and where the opportunities are not. And where someone else has better bigger opportunities and what we can do about it so we can succeed and find our niche. And I really like the idea that a CFO can offer guidance in that. And if we get past that idea that all they did was sort of figure out money coming in money coming out. There's so much strategic advantage to having somebody who is great at those things at your side as they're starting to try to build and grow and launch something special.

Unknown Speaker
Yeah, that's exactly right. And they know, I think, as I said, people think of CFOs as accountants or bookkeepers or something, something in the financial end that they don't really get. And it's not the case at all. I mean, you know, I've been asleep CEO, a CEO, CFO, I worked for major corporations, I was the head of strategic planning for the retail banking division and Citibank. I've done all that stuff. I know what it takes. I know how to how to deal with bureaucracy, and don't kid yourself. Even if you're a startup, if you're out in that world, trying to raise money, you're in a bureaucracy. And you have to know the rules. And if you don't, you're not going to get you're not going to get there. You know, very, I mean, there's always an exception. But that's that that's what's normal, what's normal is, you're going to struggle and they want to see you struggle, if they're going to invest in you. And so, you have to show your passion, show how what you're doing and show that you understand what it's going to going to take to get you from where you are now to make me the investor happy. You know, and that's, that's really the bottom line. That's a big issue. Now, once you have once you have the money, and you're up and running, and as I said earlier, you you have to deal with the growth and the competition. You know, and and the investors wanting more or less or, you know, getting getting other people in or doing your second raise or whatever it takes, you have to be ready for all that you can't do it if you're spending all your time where you should on building your business, you need somebody to handle everything else. And that is the CFO more often than not. And that's the role I like to play. I like I'd love to take smaller companies and help them grow you know, and and get that and once they're growing, help them get through that fast growth period. Without without any Well, I can't see without any hiccups with few hiccups,

Chris Bintliff
far fewer ups, then, I mean, that passion enthusiasm is is infectious so much. Great advice. Pat, thanks so much for spending time with us today. And in talking through some of these issues that startups I think can really benefit and value from understanding better. The role of CFO can help them in success. Really appreciate it.

Unknown Speaker
Thank you for having me.

Unknown Speaker
Thanks for listening, and a special thanks to our subscribers. Consider becoming one today. Visit pro CFO partners calm and learn how we can help you build a framework for financial management and growth.