On September 24th, we hosted our first Abacus Fireside Chat (minus the fire!) for New York City finance professionals which featured Alan Federman, VP of Finance at ClassPass (since moved to Kitchensurfing as Head of Finance) as the guest speaker. For those who were unable to attend, we’ve put together a recap of Alan’s talk highlighting his thoughts on finance’s role at an early stage startup, including some video footage.
Alan Federman, Head of Finance at Kitchensurfing, has more than 25 years of experience, having held positions at The Ladders, Brunswick Group, HowAboutWe, and ClassPass just to name a few. He likes the early stage companies who are seeking help building out their finance and accounting infrastructure because he believes that finance has truly become a key pillar in a startup’s success.
Early stage isn’t for everyone
It’s no surprise that startup time is different than other company’s time. The evolution is fast and everything is continuously changing – the early stage finance person isn’t always the later stage hire. It’s important to be adaptable and flexible – you really have to love early stage startups in order to work at one.
Building your team
Alan shared that when he is building his team, he looks for non-traditional backgrounds, because this can help with perspective and operational business understanding. He’s always looking for curiosity and passion mixed in with the basic abilities and knowledge of credits, debits and numbers. Finding someone that understands the business drivers and the culture will be key to being successful.
When building a finance team at an early stage startup, Alan says to consider the risks of the company. If you are in fundraising mode, you’ll want to hire someone with great financial planning and analysis skills, and if you are looking to expand overseas, you’ll want someone with international accounting experience. But the important piece is to make sure they have crossover skills to the other areas, because at an early stage company, you end up being responsible for a wider range of tasks.
Finance and company culture
The drivers of a business and it’s culture impact more than just the employees, it also affects policies and controls. Finance at a startup is very different than a large organization – the ability to enforce rules is difficult and often not welcomed. It can be hard to overcome the disciplinary barrier and still manage to run the company finances.
Alan suggests using the company drivers to determine levels of oversight and implementing a policy of give and take. Using Abacus as an example for managing expenses – he tries to get employees paid back faster and in return, asks them to use common sense when making company purchases. He believes in empowering people to make the right choice because you aren’t always going to have the bandwidth to review everything.
Contributing to company strategy
Finance is continually evolving as companies become more complex with issues such as an increase in 1099 workers and sales tax for online companies. It has become a pillar of the business and becomes more valuable as more meaningful data is presented. Strategically, finance can contribute by making data driven choices, for example, the tax implications of expanding to a new country, or the return versus the cost of that move. However, the new challenge is the speed at which finance now needs to move in order to present this data.
Check out the video clip of Alan’s talk