From managing cash flow to capital raising right from the get-go, chartered accountants can bring expert knowledge to new companies trying to find their footing. For better or worse, many start-ups rely on cash injections from venture capitalists to fund their growth, so they need to be especially diligent about reporting what those investments achieve – and that’s where a CA can step in and really make a difference.
Certainly as CA ANZ’s CA Start-up Adviser Program, launched in late 2018 through CA Catalyst, has already shown, chartered accountants bring an ideal skill set to any start-up keen to manage its finances carefully – and ultimately build a sustainable business.
But what’s in it for a CA? The reality is, most start-ups won’t grow into unicorns. So what’s driving some of Australia's brightest CAs to leap into the unknown?
Avi Baum CA
Head of business development, Covered by SAGE, Atlanta, US
“Whatever industry you’re in, you must get the numbers right for direct revenue less your direct costs.”
Avi Baum CA learned early in his first job at PwC in Melbourne how a CA’s analytical mindset can help businesses understand the financial impact of every expense, whether that’s hiring someone new or investing in marketing or technology.
“Whatever industry you’re in, you must get the numbers right for direct revenue less your direct costs,” he explains.
“In the VC-backed world of start-ups it’s easy to get caught up in the mindset of ‘we’re a start-up so we’re obviously going to lose money at first’. But the sooner you work out those numbers the better to ensure your revenue model can sustain your business.”
Baum got a taste for start-ups as corporate adviser and CFO to beer start-up Collins St Brewing Co when he was at PwC. His corporate job took him to the US in May 2018, and in December 2018 he joined insurtech start-up Covered by SAGE.
Moving from advisory to being the person responsible for making and executing decisions was, he admits, “a switch in mentality”, though he now thrives on wearing multiple hats to manage funding, P&L, business strategy and hiring.
“I loved working as a management consultant and I’m glad I had the right skill set and opportunity to be brought across to the US by the firm,” he says.
“The Big Four firms give you great tools to be successful. But for me, working in a start-up is really what I want to be doing. Start-ups really stretch your skills.”
In April 2020, during the pandemic, Covered by SAGE secured US$6 million seed funding to expand the reach of its ‘plug-and-play’ insurance brokerage platform, which is marketed as giving insurance agents the flexibility to write insurance from anywhere.
“Fortunately, with our strict capital management process, we did not have to lay off any employees due to COVID, unlike many of our competitors,” reports Baum. “We’ve seen strong growth with insurance agents starting with SAGE, despite the economic turmoil.
“Adopting a crisis mentality early and acting swiftly was a valuable lesson for me and I suggest CAs critically analyse the impact of these scenarios on their businesses and develop actionable plans as soon as practical.”
Damien Singh CA
CFO at Canva, Sydney, Australia
“To achieve big returns you need to take big risks.”
Damien Singh CA is a kind of start-up pop star, at least among accountants. Like his musical peers who learned their craft at one of the big talent-development powerhouses, Singh launched his career with advisory firm Grant Thornton Australia in 2011, shortly followed by audit and analyst roles at the Australian Prudential Regulation Authority (APRA) and then PKF Australia.
Five years in, he joined a tech start-up that he’d helped go to an initial public offering (IPO), knowing he wanted to be more ‘risk aware than risk averse’.
“Often the risk appetite of some of the [large firms’] audit clients and APRA is extremely low, whereas it’s the complete opposite in a start-up,” explains Singh. “VCs invest in start-up companies because they expect to see big returns. And to achieve big returns you need to take big risks.”
Singh’s understanding of risk appetite has helped shape his leadership at graphic design software platform Canva, which he joined in 2016. He makes sure his accounting and finance team members are aware of risk as a critical part of the work, rather than defaulting to a risk averse position.
“As accountants we have sort of a bias and tendency towards risk aversion,” he says. “But it’s not representative of the risk appetite of the company you may be working for.”
Singh says Canva’s rise to a valuation of US$6 billion since it launched in 2013 is driven by scalability in every part of the business.
For his part, he’s upgraded Canva’s accounting systems so he has real-time visibility of financial performance and automated global digital sales processes. He applied his ‘Blueprint for Scale’ to expand his team to more than 40 people.
Singh’s strengths in capital raising helped Canva secure massive investments, though he’s more excited about deploying his Blueprint for Scale.
“After months of work, it’s a relief on the team and me that money is in the bank and we re-shift our focus to growing the business, deploying that cash in the business to fuel the growth that was the purpose we raised it for in the first place.”
Joyce Wong CA
Consulting CFO and founder of Ruby, Auckland, New Zealand
“The challenges CAs face in start-ups can be tough – but you will grow and become a better professional.”
Joyce Wong CA left a ‘safe’ job at Grant Thornton in Christchurch and relocated to Auckland a few years ago to really test her talents. She was pleasantly surprised to find being a finance manager at cloud services start-up The Instillery was also fun.
“It was a Monday afternoon and the place was roaring with laughter,” she recalls. “And I thought ‘no workplace I’ve been in before has this much fun on a Monday’.
“What I love about start-ups is you’re working with amazing people with a lot of energy. It’s infectious.
“But it’s not like you’re partying all the time. You have to execute every day and, as an accountant, you can make a big difference driving the business forward,” she says.
Wong enjoyed her first start-up experience so much she launched her own in October 2019. Ruby is a ‘meta’ start-up providing consulting CFO services to tech and consumer goods start-ups.
“CAs have the financial knowledge to help [start-up] owners understand their businesses, matching ambition with forecast models and budgets to manage growth better.
“The challenges CAs face in start-ups can be tough – but you will grow and become a better professional. Be scared, but do it anyway.”
Unlike working in a big corporate, where a CA might be just one cog in one department, start-ups need CAs to do a huge variety of work, Wong explains.
“You may be doing bookkeeping one day and high-level strategic planning the next. The accounting stuff is very useful, but there are also plenty of other challenges that are interesting from governance to commercial deals.”
Even during a downturn Wong saw an opportunity to raise NZ$3 million for a start-up client in the health industry, which is experiencing rapid growth.
“The increased interest in health and wellbeing post-COVID-19 is having a positive impact on my clients in the healthcare and nutrition sectors,” she says. “There is always opportunity; you just have to look for it.”
Phil Halbish CA
CFO at TRIBE, Melbourne, Australia
“Being a CFO at a fast-growing start-up… you get line of sight to every moving part of the business”
Phil Halbish CA’s career took him from KPMG to betting agency Tabcorp and then media company News Corp in less than a decade, though it seems driven more by entrepreneurial ambition than aspiration for promotion.
“I’ve had great jobs in huge operations, but the roles were quite narrow,” he explains.
Halbish found the “greater breadth of role” he was looking for at an employee wellbeing software-as-a-service start-up that quickly expanded under the Virgin Pulse brand. Within five years, it grew from 75 to 1700 employees, servicing thousands of businesses in 150 countries.
“The great thing about being a CFO at a fast-growing start-up is you get line of sight to every moving part of the business,” says Halbish.
“The rigorous way you’re trained to look at all parts of a business as you go through your CA accreditation is really put into play because a lot of the times you’re very much on the tools.”
Halbish says he had an amazing journey setting up financial structures to scale Virgin Pulse so it achieved annual revenue of US$100 million. But eventually it felt too big and US-centric.
“A lot of the fun stuff I’d really enjoyed while it was growing was carved off so when the opportunity to press play again came up at TRIBE, I took it,” he explains.
TRIBE is a self-serve marketplace connecting social media influencers and brands. It was founded by media presenter Jules Lund in 2013 while he was hosting multiple shows at Southern Cross Austereo. Lund went all in at TRIBE in 2017 and Halbish joined midway through 2019.
“Obviously bringing in a chartered accountant at the CFO level is a big investment for a start-up, though I think good financial governance can’t start too early,” notes Halbish.
Finance teams in start-ups may be lean, admits Halbish, though on the upside, he and the CAs he works with relish the extended scope of their roles. Interestingly, the pandemic accelerated several strategic growth plans.
“We’ve seen significant growth in ecommerce, along with growth in industry verticals aligned to activities relevant in a ‘stay at home’ environment,” he says.
“Managing the business through these times puts all your skills and knowledge to the test, and we feel our culture will come out of it stronger.
“The biggest buzz you get working in a start-up is directing everything you’ve learned into helping the business be as successful as possible – it makes going to work every day pretty easy.”
Raj Kuckreja CA and AJ Singh
Co-founders ezyCollect, Sydney, Australia
“We have clear objectives and values that guide our thinking around success, and there is still much more to learn.”
AJ Singh and Raj Kuckreja CA met at the University of Technology Sydney (UTS) while studying business and accounting respectively, then both took the well-trodden path to massive consultancy firm Accenture.
But soon after gaining his CA accreditation, Kuckreja decided he’d much rather build his own small practice than settle in for a cosy corporate career. Seventeen years on, Kuckreja Accounting and Taxation Services continues to serve 100 small business clients across a wide range of industries.
“The study you do as a CA helps you distil large amounts of information and then clearly communicate the numbers to your clients,” he says. “Having that financial lens helps you explain what’s going on in their businesses and why their strategy may or may not make sense.”
Though they face a variety of business challenges, those clients all need help managing cash flow. That common pain point is what motivated Kuckreja to co-found ezyCollect with his mate AJ Singh in 2013.
“Given my experience in working in for corporate sector, I didn’t see myself working in start-ups,” confesses Singh, who’d stayed longer at Accenture than Kuckreja.
He then worked in a few fast-growth businesses, including Sydney-based medical safety product manufacturer Medirite, which he ran with his father until the middle of 2012.
“Medirite grew tremendously fast and was on BRW’s Fast 100 list, but we almost went bankrupt because of cash flow. We took on debtor finance, which fundamentally is a band-aid to cash flow.
After we sold the business, I was doing my MBA when I caught up for a beer with Raj and we both realised: ‘There’s a real need here for small businesses that isn’t being met – SMEs need to respect customer relationships but how do you get paid on time?’”
ezyCollect uses cloud technologies to automate accounts receivable, helping SMEs collect payments from customers more quickly, explains Kuckreja.
“Managing cash flow is the number one critical health indicator for all businesses, particularly for SMEs during recent difficult times,” he says. “So we recently launched a tool that makes credit risk management easier when providing credit has never been riskier.”
“Despite being a very tough time, we’ve grown our revenue month-on-month since March,” adds Singh. “While we weathered the economic uncertainty of the pandemic, we definitely think there is more to come. We have clear objectives and values that guide our thinking around success, and there is still much more to learn. We’re constantly learning from the challenges we face.”
Shaye Thyer CA
Director of sales, MindBridge Ai, Adelaide, Australia
“My role is to make sure the ‘taking over the world’ mission is well-disciplined and financially sustainable.”
For 15 years, Shaye Thyer CA was generally happy with a career in the ‘safe zone’, working at corporate accounting and advisory firms such as Perks and BDO, while channelling her passion for public speaking and advocacy into side projects.
She’s mentored app start-ups on Xero’s Partner Advisory Council, was the CA ANZ Young Regional Advocate for SA in 2019, and is an Activator member of global women innovators network SheEO.
But what was she thinking when she left her role as director of BDODrive (the advisory giant’s business intelligence division) to join auditing tech start-up MindBridge Ai in March 2020?
“I’m a firm believer if you’re not scared, you don’t grow. Although I’ve done several challenging things over the past few years, I mostly made safe career decisions working in big corporates,” she says.
“I learned a lot in those companies, and I realised what’s really important to me is innovation. I felt I had a lot to offer a start-up, particularly around creating structure – and maybe how not to get suffocated with red tape and hierarchy.”
Soon after Thyer joined MindBridge Ai as director of sales, Australia and New Zealand, COVID struck, and everyone switched to working remotely. She embraced the challenge of creating her own onboarding plan and lined up “some really candid chats” about her role in improving the start-up’s financial discipline to reach its commercial KPIs.
“The structures for risk management and managing cash flow that CAs are familiar with are essential balances for the amazing creativity of start-up founders. My role is to make sure the ‘taking over the world’ mission is well-disciplined and financially sustainable.”
Thyer recommends CAs become good storytellers if they want to help start-ups adopt better financial behaviours. It’s no good speaking about debits, credits and ratios if the rest of the people in the business don’t understand what they’re meant to do to improve those numbers.
“Show the people in the business why things are happening, find which levers need pulling, and explore changes to the commercial model,” she says.
“Obviously, the fear factor is amplified during the pandemic. But with uncertainty comes opportunity: businesses that adopt new technologies to become more efficient and give them a broader contextual view of risk are the ones that will not only survive, they’ll thrive when the new normal comes.”
CA Catalyst is CA ANZ’s strategic program designed to help chartered accountants build capabilities, explore new markets, and provide greater value for themselves, their clients and communities.Explore opportunities with CA Catalyst