Q&A: From Sellside Research to Strategy & Finance at Rapid Growth Start-up

To answer your first question, when the role began to drag, I did two main things. To give you context, where I worked had recently undertaken major M&A and by time I arrived, had owned the acquired business unit less than a year. Naturally, that prompted a ton of action to better integrate that unit and develop a better reporting and analytics.

A) Got more involved with developing and automating reporting using Business Intelligence (BI) tools - teamed up with a BI analyst and a data scientist to churn through daily operational KPI data, set up dashboards, and automated email reportsto give corporate more context into the Daily KPI reports we were skimming (but had no real feel for). Mechanically, this took me deep into understadning our transactional level KPI data, how that was stored (data warehousing), and analyzed, showing discrepancies vs GAAP. Operationally, we could understand how daily, weekly, monthly trends looked vs historical performance, instead of relying on the unit CFO (very long served) to dig into his memory and give us context. We had our own view, and naturally, could accelerate our decision making cycle because we short circuited the need to always ping the CFO for insight.

b) This was more thrust upon me, but budgeting for our finance team for the next fiscal year really illuminated how slow and crappy the process is, but how necessary it really is to make sure the org is sizing up its capabilities and performance. There are numerous iterative discussions, nuances to understand for each team, dealing with different types of leaders and styles - don't get me wrong, it was not analytically rich or stimulating in the moment. Instead, it stressed soft skills - expectations mgmt, feedback loops, and at the end, a clear / succinct presentation. I didn't do very well on my first try, but ultimately, was a tremendous learning experience that I would repeat again.

To answer your second question, I will give you what I think is rote FP&A - collecting financial inputs, rolling them up, budgeting against them, and then reporting out performance vs budget every month to a unit lead or CEO. It's mechanical and mind-numbing after the third or fourth time if that's all you do. *But did you reduce the time to crank that info and to report (i.e. improve process timing), and increase accuracy of reforecasts off that info? Are there better ways to budget or forecast that you're not considering? Are there pockets of costs that could be better optimized based on what you're seeing from a cost performance perspective? Did you flag finance underperformance early based on your insights and prevent a big whiff in the qtr? *

An even more dynamic FPA partner also gets involved with their business partners to understand their challenges within the framework of the company' financial constraints and goals. Helping them size up initiatives, resourcing, project phasing and the ultimate impact on your company's P&L all are great ways to not look just another FP&A reporting jockey. Happy to elaborate more.

Hi, yes I did receive equity in the company though as employee no. 70-80, it wasn't a crazy amount (as % of my base). Negotiations for equity is not my strong suit since I only had to do it once so far, but in my opinion, it largely depends on your seniority, your role's mission critical-ness, founders' attitude about relinquishing equity, and your own risk appetite for the ride with the start-up.

So in my case, I was coming in mid-level, not having a mission-critical role in that I wasn't coding the software nor was a key sales or customer-facing role, founders having a relatively stingy view of handing out equity, and not knowing as I do now about our business/products, I was OK with the opening offer of equity (~20% of base). Instead, I pushed for a higher base salary. In hindsight, with what I know now, I should have pushed for more equity in addition to the salary. Some start-ups will top up your equity every year in addition to salary raises with promotions, but ours is closer to 2 years.

To your 2nd question, I don't think about it as an industry play per se; philosophically, smart financially-oriented managers are necessary in any industry to help maximize performance and value for investors. The rub tends to be can every industry offer the dynamics of growth, intellectual stimulation, and financial reward that attract buyside types - probably not. I think the start-up world offers a lot of those dynamics, but unfortunately, buyside types tend to lack true functional skills (technical, sales, operational) that early start-ups really need, instead of doing just deep analysis. An interesting middle ground for such types that I've read about and know people who have done is the Search Fund route, which I will not dive into here but is industry-agnostic.

From a functional perspective, yes, I could do this job without an MBA; the MBA didn't teach me much in terms of of new things or skills, it helped me hone my finance and strategy analytical skill. More importantly, it gave me time to explore whether being on the buyside is truly for me, instead of something that I pined for constantly working on the sellside. Lastly, it gave me exposure to tech in a way that I would've never been able to gain as a merely an outside looking in; my school offered a ton of opportunities to hear fellow students, business leaders, and academics talk about the industry and the landscape.

And then there's the network / branding aspect of it. I fully understand that I did not become smarter because I got my MBA, but I do have a cohort of peers who are remarkably driven and ambitious who will provide me access and opportunities that most people won't see. This current job is a direct byproduct of someone in my MBA section, who I'm close to, alerting to this role and giving me the inside scoop and being an advocate for me with my current boss. The cost of it is not a joke, and from a pure ROI perspective, being less than five years out makes it hard for me to really evaluate whether it was "worth" it financially. However, I tell myself, partially to ease the financial pain, that I play for the long tail of my career in terms of this network and visibility into a world of high flyers and sophistication that being on the sellside didn't provide exposure into.

This is my purely my case: for FP&A, the industry that I covered and being familiar with the various operating models in our industry helped enormously, especially relationships between different stakeholders like suppliers and customers, helped me scale the learning curve. My boss, head of FP&A, didn't know the industry but he did know how to run an FP&A org so we were able to complement each other in that way. More broadly, having an understanding of the disconnect of GAAP financials from the cash flow generation of our business units also helped enormously; it helped me frame the story for a month or quarter for wall street. Being able to summarize and condense complex sequence of events and frame them in Powerpoint also went a long way in my organization since that's how most communication was done. Excel modeling not so much as I didn't handle our company model but I did have to know how to navigate it since I pulled data and other inputs to do various analyses.

For the start-up, it will ultimately on the need on the start-up, its maturity, and frankly, the sophistication of the founders or CFO. For me, being able to quickly get up to speed on a new industry, learn the important drivers of how business is conducted (i.e. big players, regulatory framework, consumer interactions, long term trends etc) helped me understand the industry vertical that we play in and become well versed in conversations with banking advisors we brought in 6 months into my job. On the modeling front, since I do own our long term company model, it helps enormously to be able to build and maintain a model that I have modified a lot as my understanding and ability to forecast business drivers of revenue and costs have improved. But more importantly, the ability to communicate with a senior audience in written form (slack/email) and in person, goes a long way toward building credibility with my leadership team. My willingness to work smart and to work hard and long (when needed) doesn't hurt either.

For MBA admissions, I think you're giving too much credit to how much admissions knows about Wall Street roles, especially those coming out of undergrad. Frankly, it's up to each person to sell their accomplishments because I can definitely see a case where a savvy ER person upselling the heck out of their 2 years whereas a less attuned IB analyst who worked really hard and cranked away but can't summarize for the lamen audience why their work mattered or had an impact. In most people's eyes, including my classmates (consultants, tech backgrounds, etc), they don't care about the distinction so long as you can wield an Excel model and read financial statements. For adcom, I'd assume they have a similar bias; your ability to be a financial whiz is circumscribed by your ability to sell yourself and your skills; being in IB or PE in of itself doesn't mean all that much.