Demystifying the Role of the CFO in Growth Stage Companies: Rick Smith

If you would like to earn CPE credit for listening to the show, visit earmarkcpe.com/fpa.

earmarkcpe.com/fpa.

Download the app, take a short quiz, and get your CPE certificate. Finally, if

you enjoy listening to FPNA today, please go to your podcast platform of choice, click the subscribe button, and leave a rating and review of the show.

And now, on to the show >> from Data Reels. This is FPNA Today.

Welcome to FPNA Today. I'm your host, Glenn Hopper. Today on the show, we're

Glenn Hopper. Today on the show, we're joined by Rick Smith, a five-time CFO who's helped companies move from startup chaos to growth stage structure. He's

led finance teams in SAS, healthcare, and digital services, guided multiple acquisitions, and now works as a fractional CFO, helping founders prepare for what's next. Rick is also the author

of Demystifying the role of the CFO in venture and growth stage companies, a grounded look at how finance leaders manage complexity, risk, and rapid change when there's no playbook to

follow. His book is available on Amazon.

follow. His book is available on Amazon.

We'll talk about what he's learned across those roles, what separates strong FPNA from reactive reporting, and how finance leaders can create clarity when everything around them is moving

fast. Rake, welcome to the show.

fast. Rake, welcome to the show.

>> Thank you, Glenn. Thanks for having me.

I'm really excited to talk to you today because I feel like, you know, when we were talking before the show, I just I feel like we've been on very similar paths in more ways than one. So, I'm

looking forward to getting into into all of that. But, I guess for our audience,

of that. But, I guess for our audience, walk us through your your background and experience and maybe like what early roles shaped how you lead finance today.

>> You bet. My story is kind of funny. I

would say it's a little bit unusual, but I started off on the FPNA side with a massive retailer and I got to tell you that was super helpful because you had tons of data to work with and I was

always surrounded by really good modelers and you learn a lot about Excel and about modeling. When you're working with a group of really good Excel users, you really do learn a lot of stuff from

each other and you make each other better. But where my story gets kind of

better. But where my story gets kind of funny is on a bit of a lark, I interviewed to become the controller of a $60 million company that had multiple business units and they had some

international business units and I was not qualified for that job. They totally

should not have hired me. I had never done an accounting entry in an accounting system in my life, but they never really asked the right questions and I did get the job. Unfortunately for

me, they had just done uh poorly done a systems conversion and their books were a mess. But fortunately for me,

a mess. But fortunately for me, accounting is just rules-based math. And

I do love math and I'm a competitor and I don't like failure at all. So I poured my life into fixing that situation. And

fixing all of that accounting pretty much earned me a CPA in the school in school of life accounting. I like to say I actually liked being a controller and I think I was pretty good at it. But

after a while, I switched back to run FPNA for a while and then I became the CFO there despite their apparently questionable hiring and screening practice. I was there for 10 years and

practice. I was there for 10 years and we grew the business to 300 million in revenues and we sold it twice. So

netnet, it all worked out for them and it worked out for me too and I've been a CFO ever since. And I bring all this up because even though I'm an FPNA person at heart, doing hardcore accounting for

a long time was super helpful. It's

really hard to be a good CFO unless you truly understand how both the accounting and the FPNA sides work. And I tell everyone who wants to be a CFO to push to get roles in both finance and

accounting because it will make you a better CFO down the line. That being

said, like I can't envision a lot of people were better prepared for their first CFO job than I was because I'd been working at the same company for a long time and I knew the accounting side and I knew the FPNA side. But once I got

the job, I learned that there were so many things that I didn't know yet and I had to figure those things out. And so,

you know, I'll do an early plug for my book. That's kind of why I wrote it. And

book. That's kind of why I wrote it. And

so, across maybe like a 10ear span as a CFO, I just started to take notes about how I did things and what I learned. And

there are just so many weird things that pop up for CFOs that you have to learn on the job. And I really couldn't find a book like this anywhere. So, I wanted to create a road map for new CFOs or people who aspire to be a CFO. So that's why I

wrote the book Demystifying the Role of the CFO in venture and growth stage companies. And honestly, for a business

companies. And honestly, for a business book, it's actually a really fun read.

The writing's casual and I pepper it with crazy stories about stuff I encountered in my career. It's not a boring read at all. It's it's a fun read.

>> That's great. Yeah. And we'll definitely I definitely want to get into the book a little bit more later, too. thinking

about your career and I had I came straight through FPNA with you know in a lot of ways a customer of accounting because I like you I'd never made an an

accounting entry in my life and that took my first CFO role before I'd done any kind of accounting and if I didn't have a decent controller at that company I I don't know what what I would have

done but it was >> the I think the best way to learn is to have to clean up books to clean up chart of accounts and I spent so time in those early stage companies um that you know

if it's founderled or startup mode and you're just kind of and you don't have a full-time accounting person there. Those

early days when you're setting up the chart of accounts and and you know there's a it's always a mix of you know some gap sort of blended acrruel kind of thing and it's just a mess to kind of

unwind and get to true cash flow and all that. It is like you said it's trial by

that. It is like you said it's trial by fire when you uh are having to learn it while you're cleaning up and trying to build a a proper structure.

>> They had three I'm trying to remember they had probably three or four entities might have been more and uh they just done the system systems conversion and just so many things that nothing was reconciled. And so I just started

reconciled. And so I just started dumping all the data from their accounting system and literally going account by account and asking myself like well what are the ins and outs on this account and what should be in it?

what back like what justification do we have? Can I reconcile it every single

have? Can I reconcile it every single account? Uh just going one by one

account? Uh just going one by one through their chart of accounts. And

what's great is you learn then the chart of accounts and you learn you know all the little micro items that make up a business and how it runs. So it look it wasn't fun. I never left the building

wasn't fun. I never left the building but after about a year we had it all super tight. Everything was tied out. It

super tight. Everything was tied out. It

was great. We got through the audit. It

was fine.

>> Accounting is top of mind for me today.

I just left um an advisory board meeting for uh University of Memphis School of Accountancy. I'm on the I'm the only

Accountancy. I'm on the I'm the only non-account on the advisory board, so I always I immediately feel like the uh the odd duck when I go there. But I

wonder and actually there were a we were meeting with some instructors today and I was surprised there were several accounting instructors who did not have CPAs.

>> Yeah. Since you talk about, you know, sort of that what CFOs need to know when they come into the job, what would you advise if somebody was early career, maybe they

have maybe their background is finance, would you advise someone to get a CPA at this point? Um, if they were interested

this point? Um, if they were interested in being a CFO, it's a tough call. I

don't have a C I don't have a CPA and I think at some point um I probably could have taken the at least the audit side and done well. I I'm definitely light on

tax. I don't think you need it to be a

tax. I don't think you need it to be a CFO. I just think you need to have

CFO. I just think you need to have worked. I I think it helps if you have

worked. I I think it helps if you have done some sort of accounting related roles and understand just the inn ins and outs of how books get closed and how stuff flows through the accounting. I

know a lot of CFOs who are not CPAs and actually I know a lot of CFOs who did not come up through the accounting side but that being said I will say that they probably are doing that with larger companies and because I tend to

gravitate more towards late seed and series A companies there's always a major accounting component and there the accounting has usually been done very poorly going backwards at that point

when I signed up to to help them and so I could not do my job if I didn't have a solid accounting background. I would

four out of five situations I walk into the accounting is a mess and I don't do the accounting myself but I can go through it quickly figure out what's wrong and then I will help them somewhere find accounting resources to

get the books fixed and I I would not be successful at my job unless I'm quick about pouring through accounting and saying these are the 20 things that are wrong and we're going to have to find somebody to help us get all this stuff fixed.

>> Yeah. really early in my career and and for the maybe the first couple of uh CFO roles I had, I had sort of imposttor syndrome about not uh not having the the CPA behind me. But I did see a stat. I

think it was like last summer there were it was something like 51% of CFOs had an MBA versus and obviously you could have

MBA and a CPA but uh you know an MBA versus the CPA route and um I think that's and and you know the role is shifted and especially with where you're

focused I think there is >> you know I've heard the saying that um controllers today are what CFOs were 20 years ago. Yeah.

years ago. Yeah.

>> And um and in a startup a lot of times you have to be both um or not not you know maybe a little little more in a growth company you would um have a controller as well. But with your

background and with going through all that cleanup kind of early in your career and sort of understanding that stage did you know then that kind of this growth company is where you wanted to be? What were what were the key

to be? What were what were the key turning points that that pushed you in that direction? It really is funny

that direction? It really is funny because I I I went and got an MBA a long time ago. And when I was coming out of

time ago. And when I was coming out of business school, I said to myself, I want to be the CFO of smaller to mid-size companies. And part of it is I

mid-size companies. And part of it is I like working for businesses that are small enough that I can have a good feel for how everything works within the business, but also I appreciate like

doing what we do. The system side is such a pain. It's really hard like if you have to move from system A to system B. And so I love that at this size you

B. And so I love that at this size you can make systems changes and those changes take months not years. When

something is too large I just start to feel really uncomfortable about the fact that I don't know a lot of the aspects as to how things work. And I don't love when you go to plan a systems change that you're planning you know 12 to 24

months out versus 3 to 6 months out. So

my preference is always to work with companies that are sub 50 million in revenues I would say. And at this size, what I love is you can provide clarity into what's going on with the business and help everyone think three steps

ahead. And that can be a real difference

ahead. And that can be a real difference maker in terms of helping the business grow and scale and thoughtfully plan for the future. I'm always asking in

the future. I'm always asking in everything we're doing, how would we do something if we were three times our current size? And I try to implement

current size? And I try to implement systems and processes for that future state, not for the current state. If the

company can afford to invest in its finance and accounting infrastructure at that early of a stage, I really want to to build the company now that we'll need two to three years from now. It's that

building, right? I mean, it's different in that in that growth stage. You feel

like you're bringing something into existence um where you know large established company, it's kind of, >> you know, just hold the course and make incremental changes and and all that,

right? I so again when I started off

right? I so again when I started off doing FPNA for that large retailer every day I would come up with a new idea as to how to do stuff and every day somebody would look at me and they'd be

like yeah we just kind you kind of want you to do things how they were done before and and I that's when I literally said this is not the right fit for me. I

want to go to places where that creative side of me I can be more of a dreamer and an artist in terms of envisioning what do we need to to tell that story about what's going on within the

business versus just doing it how it was done before that just that didn't work for me at all and is that mindset is that the same thing that led you okay I

like growth stage companies but I also like to be in a bunch of you know the idea of going to the the fractional work um instead of just staying inside at company.

>> Yeah, a little bit. I mean, I have an attention span where I think I can do a lot of things at once and I enjoy it for me just intellectually, I enjoy working with a lot of companies at at the same

time. But I decided to shift into

time. But I decided to shift into fractional work because when I was CFO of some, you know, midsize uh growth equity firms when we would go to do

acquisitions, I was always really surprised at how many companies we bought weren't able in my opinion to maximize their sale value in the process because they showed up just looking

small timey in the process. They often

they had questionable accounting. They

had no real financial modeling. They

needed higher level CFO support and help, but you could tell they probably a couldn't afford a full-time highlevel CFO and b they they probably didn't have enough activity to occupy a full-time

CFO. So, all this started to really hit

CFO. So, all this started to really hit me like three, three and a half, four years ago, a little bit before fractional became a thing. And I reached out to a friend of mine, a good friend

who runs a VC firm, and I asked him, "Hey, if I were a fractional, could you basically spread me across a couple of companies in your portfolio, like maybe

three or four companies, do you do you have companies that could use my help?"

And he basically said, "I could use your help like yesterday." And so I quit a full-time CFO job and within 30 days, I already had several clients thanks to

thanks to him. And it worked out exactly as I had hoped. I mean, again, I I spread myself normally across three or four companies. And I help them get to

four companies. And I help them get to that next stage, that capital raise, that debt raise, or that sale that they're trying to get to. And I'm doing it as I've described already, making

sure the accounting is done to a certain standard, but really building out the FPNA, the modeling, and the story as we head into the process. and then kind of being a sherpa and helping them get through a process that maybe they

haven't gone through before. The good

part about what I do is a fractional too because I've been doing this now for three years across a lot of companies is I can move super fast. I have tons of pattern recognition. I'm very

pattern recognition. I'm very unemotional about anything I see, which means I can often give a CEO completely candid, unvarnished feedback about what

needs to be done for them to have a successful outcome. much more so than if

successful outcome. much more so than if I was the employee of that CEO and I'd be nervous about telling him, "Hey, your baby's kind of ugly and we got to do some we got to do some fix it work to to

dugify the baby." But the flip side is that I've learned as a fractional is I I can't get too deep in the company strategy. I can really help them build

strategy. I can really help them build out the operations and the finance and the accounting and that stuff. But the

strategy, I've got to leave that to their professionals who know their business and industry better than me and are doing it every single day since I'm only there, you know, at best a couple hours a day. I can't get too involved in

the strategy and I also can't get too involved in a lot of the microlevel day-to-day stuff. I've learned that that

day-to-day stuff. I've learned that that just doesn't work because I'm only there kind of here and there. Yeah. And that's

so hard to figure in the in those VC backed those growth stage where they've may have had someone whose title was head of finance but really they were kind of just an FPNA analyst probably or

it's somebody that had you know they were doing operations but oh you have an MBA so you can also handle the finance and it's that same thing you were talking about with company before where you know the chart of accounts nobody's really thinking about that they don't

have audit responsibilities so they're not you know the way everything's getting logged is uh you know, not where we as as finance and accounting professionals would love it. Um, but

it's interesting because when they a company's done, you know, there's so many out there now that have done big raises around AI or whatever and they're just they're they're charged with just spend spend spend to get to that

inflection point and nobody's really thinking about the financial strategy and the modeling. You don't have any historical data to go on. So it's a lot of conditional stuff that you know how

to get this hockey stick these things have to happen and you end up there is art and science to building those those startup models

but so when you come in I'm guessing they don't have I mean what is a typical uh you know finance there's pro there's not a finance accounting department right >> I become the FB I'm their first FBANA

department >> absolutely so usually they have accounting and probably the accounting has been done really poorly. And it's

hard, right? If you have bad accounting and you have bad data, it's hard to get going on the finance side in until you've at a minimum fix the accounting.

It's hard for me to move forward a lot of times until the accounting is fixed.

And that's a bummer for everybody. And

more than a few times now, I've been engaged by a company who says, "Hey, we want to go raise a series A round or series B round, and we're going to do it in the next three or four months." And

then I start looking through their accounting and I'm like, "No, we're not.

We've got to get the we can't go through around. Nobody's going to invest us in

around. Nobody's going to invest us in us right now until we get this information fixed." And then they will.

information fixed." And then they will.

So drag out your timeline a little bit.

And you know, again, I'll give them unvarnished opinion. And a lot of it's

unvarnished opinion. And a lot of it's you did this to yourself because you trusted a low paid bookkeeper or somebody who's a questionable accountant. You didn't focus on it at

accountant. You didn't focus on it at all. You weren't minding the store. And

all. You weren't minding the store. And

so that's what got us into this mess.

And unfortunately now we have to go back and fix it before we can move forward.

>> Yeah. I mean if you're doing a a seed round obviously you know you don't have any it's all Yeah. But once you start trying to get the larger investors and

and larger investments and you have to I you mentioned storytelling and I wonder you know if you're modeling out and and getting that story ready for investors you have to have clean financials around

it but I I would imagine in the modeling you start to kind of see the levers they need to hit. So don't you Yeah. Yeah.

So, don't you kind of find yourself while you're not saying here's the company's strategy. I bet you're given a

company's strategy. I bet you're given a lot of insight around look, you know, look at the correlation here, maybe something they didn't see. And yeah, I might have crappy accounting, but I'll start the modeling. And for me, at that

point, it's revenue modeling. So, let's

really figure out our revenue story. And

and I'll expand that actually. It's

gross margin modeling because that's what a lot of venture investors are focused on. They're focused on the

focused on. They're focused on the revenues, but they're also focused on the unit economics and the margin modeling. So yeah, we might not have all

modeling. So yeah, we might not have all of our accounting nailed down and we certainly might not have the world's best viewpoint into a lot of our operating expenses, but let's have a good revenue model and a revenue story

and then let's have a good margin model that logically flows and gets people to a point where they can look at it and say, "Okay, this is investable." Usually

where I'm coming in, it's either they're about to raise a series A or they have raised a series A and at some point they're going to want to get to a series B. And at that point, the hard part is

B. And at that point, the hard part is is that a lot of those investors are going to really dig through the financials and they might start demanding um audited financials. And so

a lot of times what I'll say is find bring me in and we will figure this out.

You just got to be patient. We'll get

you to audited. We'll either get you to audited financials or get you to financials that could be audited, but you might choose to not do an audit, which is actually something I often advise. We we'll get it to a high enough

advise. We we'll get it to a high enough standard, but we don't need to get it audited. This business is not that

audited. This business is not that complicated. There's no point to it. And

complicated. There's no point to it. And

so that's usually what I'll try to sell them on and then we'll march in that direction. I hate to keep going back to

direction. I hate to keep going back to the accounting, but it's again it's hard to build that story and know all of your metrics and your economics if at a base level your accounting is junk. So it to

me that is kind of table stakes. We've

got to fix that first before we can move forward.

>> Yeah. Um it's it's funny that you mentioned you know get them ready to be audited but unless required don't have them go through an audit. I found audits are expensive and if you want to just

completely take the wind out out of the sales of a founder, make them go through an audit.

>> Yeah.

>> And and and go through all that, you know, and obviously you as the as fractional CFO would be the point on it.

But going through all that can be if if you don't have to do it at that early stages.

>> Yeah. It's usually not the founders who want it. It's never the founders who

want it. It's never the founders who want it. They don't want to spend money

want it. They don't want to spend money on that stuff. It's always the uh the VC investors. And so I'll fight a couple of

investors. And so I'll fight a couple of battles on that topic. Battle one is is do we do we really need to go through the audit? Look, you can believe me, you

the audit? Look, you can believe me, you cannot believe me. I will tell you that the books are done to a certain standard. And I will tell you the five

standard. And I will tell you the five things we need to do to get you through an audit. But there's a lot of nonvalue

an audit. But there's a lot of nonvalue added stuff that is in between having good books and having auditable books.

You know, suddenly you have to book a lot of stuff like, you know, non-cash stuff like stock comp expenses, deferred taxes, things like that that don't do anything really for you. They don't move the needle at all. but you're suddenly

going to have to do that and you're going to have to have a bunch of memos drawn up and some of that stuff might be expensive. So, we can get the books to a

expensive. So, we can get the books to a really good standard, not go through an audit, and everybody still should feel pretty good about where we're at. So,

that's battle one. If I lose that battle, which I might, then it's okay, we'll go through an audit, but can we not use a really expensive big four firm? And I fight this battle all day

firm? And I fight this battle all day long because I've never had a buyer of a company say, "Well, we were going to value it X, but we're only going to pay 80% of X because you used a regional

firm instead of somebody else." It does help right now that all the this M&A is going on in the accounting world because suddenly there's a lot of big firms that are outside of the big four that are sitting there in number five, 6, 7, 8,

9, 10 who are great firms who will do just as good of work as a big four firm and they'll do it for less money. And so

I will usually fight that battle to get out of the big four. And really what you want to do with early stage companies is you want to try to find an audit firm that isn't doing public company audits because then there is a slightly

different standard. And so try to find

different standard. And so try to find those firms that are focused on, you know, rapidly growing venturebacked or growth equity companies that are private because it it will just be a little bit

easier for you. It'll cost a little bit less. And I often, especially these

less. And I often, especially these days, I win that battle. The reality is is when you go to sell a company or raise around well when you go to sell a company a lot of times they're not going to be focused on a stale audit that was

done six months ago they're going to bring in a firm to do a quality of earnings study a QV and they're going to focus on that. I love QVs. QVs are great because they're they're so much better

than an audit in terms of actually telling the story of the business, bringing in headcount data, HR data, maybe operational data, really breaking

down revenues into micro categories, like they really tell the story of a company. So, it's when I buy companies,

company. So, it's when I buy companies, I love a good QOV. And so when I take a fractional role and I'm working, you know, with them to get to a sale, a lot of times I kind of paint that picture of

let's focus less on an audit and let's focus more on getting to the accounting accounting to such a good standard that we'll go through a QV. We'll sail

through the QV from an audit quality standpoint, but really the buyer will rely on the QV to get a great feel for not only the quality of the accounting, but also the quality of the business.

>> Yeah. And I would always, you know, if if the buyer initially is saying audit and QOV, I would say how about compilation and QV and then maybe you like maybe you end up with just being

they're they're satisfied with a review that's uh you know not quite as expensive as an audit and >> yeah all that because if they're doing the QV anyway and normally they'll they'll have the the bigger firms come

in for the QV too. up in my experience.

So >> yeah, >> FPNA today is brought to you by Data Rails, the world's number one FPNA solution. Data Rails is the artificial

solution. Data Rails is the artificial intelligencepowered financial planning and analysis platform built for Excel users. That's right. You can stay in

users. That's right. You can stay in Excel, but instead of facing hell for every budget, month-end close, or forecast, you can enjoy a paradise of data consolidation, advanced

visualization, reporting, and AI capabilities, plus gamechanging insights, giving you instant answers and your story created in seconds. Find out

why more than 1500 companies use data rails to uncover their company's real story. Don't replace Excel, embrace

story. Don't replace Excel, embrace Excel. Learn more at data.com.

Excel. Learn more at data.com.

And I think of founders that I I worked with in my career, but you know, the the growth stage uh VC backed I always picture, you know, like the CEO of we work running around barefoot and and

being, you know, the the dreamer. And I

always thought of, you know, the CFO is or head of finance or whatever the title is in those early stage companies. You

do have to you're kind of the adult in the room. And it doesn't mean you're

the room. And it doesn't mean you're the, you know, the CF know or the naysayer of everything. But you do, you know, if you let a founder model it out, they're going to be a hockey stick to

infinity in 6 months and it's always 6 months down the road. But when you come in to a company or even I don't know, I guess there's a lot of sort of myths about what that must be like. I mean, it

seems like it would be very cool to be in a high energy thing, but are there some myths around that growth stage CFO job and how do they contrast to the reality? Yeah, it's funny. I love being

reality? Yeah, it's funny. I love being CFO often of ventureback companies because it feels very different than being CFO of growth equity stage company. The biggest myth at the growth

company. The biggest myth at the growth equity stage truly is how much latitude you will have in your role. So outsiders

probably think that because you have a C in your title and that C stands for chief that you can do whatever you want to get the job done. But it really depends on who the growth equity private

equity firm is that's backing you.

There's usually a list somewhere of what the CFO and the CEO of that portfolio company can decide on. That might sound surprising to a lot of people, but

usually that list exists. And you'd be surprised at how constraining sometimes those lists are. I will give you a great example. I was CFO of a 100red million

example. I was CFO of a 100red million in revenue growth equitybacked company and I had to ping the growth equity PE

firm five times minimum to get approval on a tiny lease that that company needed to renew. In my head I I seem to recall

to renew. In my head I I seem to recall that lease might have been like a thousand bucks a month. It might have been maybe a little bit more at most, but it was not like an expensive lease and I think I was trying to renew it for

like a year, you know? So, we're talking about like 12 grand on $100 million in revenues and I have to reach out to the PE firm five terms, five times to get approval for that lease. And honestly,

at some point, they started making me feel like I'm bothering them. And it's

like I I got to get this renewed, like it's about to expire. To me, the whole experience just felt really bureaucratic in what should not have been a a bureaucratic situation. And it really

bureaucratic situation. And it really sent in a weird way, it sent a message to me that maybe they don't trust their CFOs that much in that growth equity firm. And that's not awesome. It's not

firm. And that's not awesome. It's not

awesome at all. I want to feel like I'm being treated like an adult and like a, you know, a skilled CFO and they're making me feel like a middleman in a large company. You have to do the best

large company. You have to do the best you can to build that trusting relationship with the PE sponsors. And

sometimes it's easy and sometimes it is much easier said than done. And

sometimes that's the life you will have as a portfolio company CFO of a growth equity firm. So remove all visions of

equity firm. So remove all visions of glamour and you know you may find yourself feeling like a middleman kind of sending stuff over to them to get their approval and then pinging them a

few times and then maybe they'll eventually get back to you. And I was once I was CFO of a large public company uh sorry I was CFO of a division of a large public company and that's kind of how it felt you know and so and that's

not great. That's not what you envision

not great. That's not what you envision when you're CFO at this level. And that

is a reality I think that nobody talks about. It's also why I strongly prefer

about. It's also why I strongly prefer working with VC backed companies. They

appreciate you're there. They trust in you. They aren't questioning stuff like

you. They aren't questioning stuff like a tiny lease renewal and you know they're valuing you and they know that you're there to help. And so that's one of the reasons I've gravitated down

market versus maybe something that sounds more glamorous being a CFO of a much larger company. I would just prefer to be CFO something smaller and not have to deal with bureaucracy.

>> Yeah, that makes sense. It is funny having worked in both PE and VC backed space. The VC is just such a different

space. The VC is just such a different because I was early you know a in seed round even on a couple of the places where I was just you know early head of

finance kind of role but you VC is they're taking so many moonshots and they're they're kind of gambling on the management team. So they do they tend to

management team. So they do they tend to trust the >> the team more because you don't have the numbers whereas PE is trying to squeeze out every nickel of the numbers to

maximize the value there. And I guess I don't know. I mean I as as much as that

don't know. I mean I as as much as that could drive you crazy and with the weird you know spending and and sort of bureaucratic stuff you have to go through I did find that actually for

both of them early in my career in my career as a CFO made me a better because you know when you're at the that small a company it's not like you have much of a team. So it actually made me a much

team. So it actually made me a much better modeler and and it made me lean way more into statistics and even machine learning in that you know a decade ago when uh it was first out and

and we you know doing web businesses where we you had a lot more data it it was almost like a finishing school for the MBA in finance degree I guess but uh not always the most fun I guess. Yeah,

>> going through that, especially the bureaucracy, you know, the modeling and in the requirements they had on the analysis side, it's like, okay, I get it. That that makes sense. And it

it. That that makes sense. And it

actually that helps you if you're getting that sort of steady pressure from the PE firm, that helps you in M&A, right? I mean, because you due diligence

right? I mean, because you due diligence is like, oh, we've already got that.

We've done that. And when you have the financials cleaned up and you've practiced the storytelling and kind of know where everything's buried. It's

funny the way you just described it because a lot of times I describe it very similarly. I'll say the VCs are

very similarly. I'll say the VCs are investing in your business because they believe in the idea and the management team. But a lot of times when the pri

team. But a lot of times when the pri growth equity guys show up, they believe in the idea, but they're questioning the management team a lot.

>> Yep.

>> I don't mind the questioning. In doing

so, they're making sure that you know the business and you know the ins and outs and the micro areas of your business. I don't love the bureaucracy.

business. I don't love the bureaucracy.

like I don't have a lot of time either and I have a lot of stuff to accomplish and if I have to go back to you three or four times for something then you're not helping in this process. You're hurting

in the process and if it's something small and immaterial it makes me feel like you don't trust me and again then I start asking why am I here? What am I doing here?

>> Yep. Makes complete sense. When you come into a new company is there know you've done this a lot. I feel like there's got to be a playbook like you know what you're going to get, but what's the what's the most common finance problem

you find and how do you diagnose it early on and and what is what does that look like? It's so unfortunate at the

look like? It's so unfortunate at the level I deal with, but because I'm usually, you know, late seed or or early a unfortunately probably four out of five new clients of mine have

significant accounting corrections that need to be done. I hate to keep going back to the accounting, but it's the world I live in. And it's such a bummer to me because doing quality accounting when you're small is not hard. I mean,

there's just not that much there. And a

lot of these companies, as you said earlier, in the seed and maybe series A stages, they're keeping their books more on a cash basis or a selectively acrruel basis. I want to coin the the word kind

basis. I want to coin the the word kind of cruel because it's kind of cruel, but they they often are. And then some of them outsource their accounting, which

has some pluses, but it has a lot of minuses. Especially once you get to a

minuses. Especially once you get to a series A or series B, you're probably going to have to bring that inhouse. Um,

and when you go to do a series B round or take on venture debt or sell, the company's going to be required to do audit quality books. And from what I've seen, the third party like outsourced accounting firms probably aren't going

to be able to get you there. And so, at some point, you do have to bring it a in-house and and build that out. An

outsider might hear everything I'm saying and look at and say, "Well, you should automate this and automate that."

And I don't disagree with that at all, but it's hard to automate until your current situation is fixed and everything's tied out. It's really hard to move forward with anything until you get the books to a certain level of

quality. A firsttime audit for a company

quality. A firsttime audit for a company who is starting with super questionable books, it's a heavy lift. Fixing all

this is nonvalue added. It takes up a lot of time. It's a distraction. It

costs a lot of money. So, you know, kids at home, if you're listening, do accounting right from the start. It's

not that hard and it's going to pay off in the long run. You got to figure out who are some competent people or competent third parties to help you with this. But don't just focus on the

this. But don't just focus on the business itself. You've got to focus on

business itself. You've got to focus on building out a little bit of a back office that has some level of quality to it. So, I'll go straight to dork

it. So, I'll go straight to dork territory to answer your question. With

all of my clients, the first thing I do is I ask them for monthly trial balances going back a few years, a current payroll register listing out all of the employees, the titles, the departments,

and their comp. And then any operational metrics you have, and I will quickly build out uh three-statement financials.

I will comb through the payroll register to better understand who is doing what.

And when you're doing all this stuff and you're going through the trial balances in an accounting system line by line, you can learn a lot about the underpinnings of a business and how it

works. And you can also tell if the data

works. And you can also tell if the data is architected in a helpful or unhelpful way for driving insights and if the quality of the accounting is any good.

It's pretty easy to go through trial balances and start to say, "Hey, why does that balance sheet item never change? You know, that's not good.

change? You know, that's not good.

Something's wrong there. Nobody's paying

attention to that."

All of this to me is super valuable because if the data isn't architected well, it you're going to have to fix that going forward so you can gain insights from the accounting data. And

if the quality of books is poor, you know, you're probably going to have to ask yourself some questions about the staff and if you need to do some upgrading there. Then if you layer into

upgrading there. Then if you layer into the accounting data and the payroll system data, whatever available operational data they have, you can learn a lot about a business very

quickly. And so often when I start to do

quickly. And so often when I start to do this, and this is like with my clients, this is like week one and week two, this will probably become the beginning of the financial model that I'll build for

the business that we will use to manage everything off of on a go forward basis.

And as a fractional who works with a lot of clients, I've gotten crazy speedy at doing all this. And I can usually bang it out in a couple of days. And by the time I've completed all this work, I

will have a really good feel for how the business operates and really the details of the business. I enjoy doing it. I

It's I know I'm straight into dork territory. I love building out three

territory. I love building out three statement financials for companies. I

don't know why, but it's something I've really enjoyed.

>> Yeah. especially when it involves that sort of, you know, pretty much forensic accounting where you have to you're just taking that trial balance and putting everything work. I don't care. I don't

everything work. I don't care. I don't

know where you were booking this. We're

going to clean this up and book it. And

then >> yeah, >> I fully relate to that concept of you can't automate chaos, you know? So, you

have to get all that in order. And I

always think of it when you come in growth stage or or early stage business where you've got to look at the the people and the processes and the technology and the data and look at how

everything flows and kind of where those silos are where those bottlenecks are.

What are they even tracking now? What

you know where do you have different sources of truth and everything? And

then once you get that full lay of the land to your point, you might have, you know, maybe it's great person in a role that is doing some stupid process for

invoicing or for AR collections or whatever that it's like what you spend six days a month doing uh doing this and looking at all that and then but to your point that you have to start with that

three-statement model that is this is our descriptive analytics of this is where the company is. Now we have a clear picture of that. Now we can figure out how to move forward.

>> And usually when I walk in the door, if I can see that they're keeping books in a small timey way, they're probably not automating anything.

>> And so there there there probably is a lot of um efficiencies that could be gained there. But also the level, you

gained there. But also the level, you know, when you automate stuff a lot of times the level of accuracy goes up too.

And so that's that's helpful.

>> Yeah. Are there I mean when you come in too there's got to be you pick up signals like is maybe that model needs a rebuild or the data stack needs an upgrade or you know that the yeah

>> something in the way that they were reporting. I mean how do you manage all

reporting. I mean how do you manage all that transition especially if you're new there and you're like well your baby's ugly and uh we're about to swap it out

for a cuter one. Yeah, it's a lot. But

usually wi with my clients, I see the same reasons over and over again as to why they might need to kind of upgrade their stack. And so normally the upgrade

their stack. And so normally the upgrade is brought about because a they were operating under a single entity and now they have multiple entities and you have to do at that point probably

consolidations, eliminations and allocations and probably their stack accommodates none of those things. So

that's usually kind of item one is to wipe what might cause them to need a stack upgrade. The other item which you

stack upgrade. The other item which you know you might not think about is the minute a business goes international and you're dealing with multiple currencies you might need a stack upgrade then too.

I know a lot of people try to get by with like converting every transaction into US dollars at the point at which it at some point you got to set up a whole

different entity in the home currency and then figure out you know either the system can do the consolidations for you and do currency translation adjustments or you'll just keep the entity in that

currency and you'll manually do that.

But at some point when you start doing meaningful international activity, you're probably going to have to revisit your stack and how things are are done.

The other areas when I see companies start their their operating model starts to break down is when they get into an entirely new business line where the revenue mechanics or maybe the billing

mechanics are just so different than how their business was operating before.

That might precipitate a big change in the stack. And then the last one is

the stack. And then the last one is always are we doing lots of M&A? Because

if you're going to do lots of M&A, you need to have a game plan for not only how are we going to diligence these, but that's the easy part. The hard part is how are we either going to bolt their systems and their data into ours, which

is not what I ever advise doing, or how are we going to bite the bullet and move them to our systems and our process. And

we need to have systems and process in order to make that work. And also, this might sound funny, but as somebody who's done a lot of M&A, nothing is crappier than when you buy somebody and you move them to your systems and stack and it's

a downgrade. If we're going to

a downgrade. If we're going to consolidate stuff, we need to be like, "Hey, we're going to make your stuff better. We're going to move it to our

better. We're going to move it to our stuff. It's going to be so much better."

stuff. It's going to be so much better."

Otherwise, you know, you kind of look stupid and they regret selling to you when they're like, "Well, geez, I used to have XYZ and now I only have X. That

sucks." So, those are really, you know, the reasons why a lot of times you need a new stack. I will say that a lot of times with my clients, it's very possible they're on the right stack, but they've just set it up wrong and set it

up poorly and and and maybe there's modules that they don't subscribe to on their existing stack. So, a lot of times before switching anything, I'll just look at the solution they deployed and ask myself, is there a better way to use

this and get by with it or or do we need something else? Yeah. cuz I mean there's

something else? Yeah. cuz I mean there's so many people make the mistake of they hear about some really cool software and they buy it without a requirement stock and then it's just like I don't know this software is going to fix everything but it's like well what is everything

what are you trying to fix why >> or even worse they turn it over to it and they say this is an IT project implement this and it's like no it's not it's an accounting and finance project you know make sure you're nailing this the other thing I often see too is when

you use the software company to implement its own software a lot of times they do a crappy job at it a lot of times your best move is to find a independent third-party imple who

specializes in that software, they usually will do a much better job. It's

just hard to find somebody who who you know is going to succeed at that. You

are preaching to the choir and I'm biting my tongue to keep from upsetting some some of my friends at some of those companies um that I've I've worked with in the past. Uh yeah, where uh there's

definitely having that that third party implement um is >> a smoother way to go. I'm trying I'm debating asking this next question because I feel like we could have done a

whole episode on M&A, but I I guess I will go ahead and throw it out. When you

talked about being inquisitive and trying to put everybody under the same system, I am always amazed. And as

someone who's been in an inquisitive company, it it's was maddening because when you build out synergies prior to the merger, you know, a lot of those synergies, the financial synergies

obviously, but the a lot of the synergies are just we're all going to be on this one platform and this is the migration plan, but then you get, you know, you you get into depending on how many companies are in the rollup. I

mean, every company for years could have their own systems and then it just makes a a data nightmare and all that. And um

I talked to you know on the other side on on the PE side at the at the firm level um they you know they they're ideally yes they're always going to find the company that has the you know

highest operational excellence and the idea is yes that would be a perfect system but when you start bringing in all these other companies that well company X does this better company B

does this better it's really hard to integrate all that in your experience having been in an inquisitive company like that how do you approach all the different systems and technologies from the different companies? Do you try to

speed up getting them all under one system or does it make sense to Yeah, >> it's hard work and it's a heavy lift. I

do because there's there's so many challenges you have when you don't. So,

first of all, it's hard to map anything into anything and have it be apples to apples. Especially when it comes to

apples. Especially when it comes to customer data, too. It gets really hard if you're trying to pull in somebody else's customer data into your kind of architecture for customer data. And

people are always going to ask you for kind of a universal database of what's going on with your customers. And it's really hard if

customers. And it's really hard if they're not on the same systems. I get nervous about accounting. I know I keep getting back to accounting and I I get nervous about accounting quality. If I

if I'm basically trusting in somebody I just acquired to do accounting to the standard I need it done at. And if they were a lot smaller and I just bought them, I might be nervous that the quality of their accounting isn't where

I need it. And then it slows the process down. Maybe you can run one or two

down. Maybe you can run one or two companies on separate systems for a while and maybe it'll be speedy enough.

But, you know, again, I'm trying to think three steps ahead. If you have 10 companies, 15 companies, how long is your close process going to take if they're all on separate systems? So, as

painful as it is, and I'm going to give you an exception, but nine times out of 10, I'm going to want to try to get everybody on the same systems as quickly as I can. The exception might be which we talked about a little bit earlier and

that is if their revenue model is just so different than what our systems can handle and maybe they're on specialized software that helps deal with that then

I can understand not trying to elomerate them into our system. I've had this happen a few times where I've bought something and I've looked at just their business model and I've said there's a reason they're on that software. it

supports their industry and ours will be a downgrade for them and we can't have that. So fine, in this case we're going

that. So fine, in this case we're going to make it an exception. We'll let them live on what they were on. But nine

times out of 10, my best move and it's painful is to get them on my system as as quickly as I can. Also, by the way, you just bought somebody, they might be nervous about their jobs and they could

be probably looking for something else the minute you bought them. And you

know, a lot of times I'm buying stuff that's not that big. And so if a controller disappeared or if somebody else disappeared, the next day I have a personnel problem on my hands at a business that might be far away from

mine at a business that I don't even know that well. So the sooner I can get them on my systems and process the the safer I am from that kind of uh turnover.

>> Yeah, really good point. All right, I've got three more areas I want to hit and I'm we're I gota I got to be mindful of time here and I figured we had I had so many questions for you and I felt like we would get to this kind of pick and

choose mode. So, I want to talk a little

choose mode. So, I want to talk a little bit about board communication, about CFO working with FPNA, but I also just because I know you've spent a lot of time here, I think I want to talk a

little bit about storytelling and data and just because you and I have so much commonality here and what we've done from your standpoint on the sell side.

What should the FPNA team have ready?

You know, when they say, "Okay, we're looking for a raise or looking to sell."

What do you do for advanced planning that gets you ready for the due diligence around that and and who owns what in at that point?

>> It's a long list and the M&A chapter in my book is like 25% of the book because it's such a media topic and there's so many permutations to it that could be driven by the size of the the company or

the size of the deal or who the buyer is. Is it strategic? Is it a financial

is. Is it strategic? Is it a financial buyer? And so to me item one which cuts

buyer? And so to me item one which cuts across both kind of accounting finance and the sales team is the revenue stories got to be nailed down. Nobody is

buying anyone unless they have a great feel for the revenue story of the company. And the hard part is is when

company. And the hard part is is when you go a layer down within that there's a lot of different types of revenues. So

first of all let's start with current revenues. And there's a lot of different

revenues. And there's a lot of different types of current revenues. So for SAS software companies, you know, what you're ideally trying to build out is what they call a data cube. And you want

to build out a perfect data cube that cleanly lays out by customer, by month, both the unit and revenue volumes.

And from that, you need to create the CFO needs to create a narrative of anything that has an upsell. So the

relationship is growing either from price changes, volume changes, or you sold in new services. The CFO needs to have that narrative for the upsells,

what's driving it. Same thing on the downells. So any customers where the

downells. So any customers where the revenues are going down and that could be driven by, hey, you're giving them price discounts, their volumes are going down or maybe you were selling a couple

of services to them and some of those churn. You need to be able to clearly

churn. You need to be able to clearly articulate what is driving downells. And

then churns. Everybody will gravitate straight towards churns. Why did a customer leave you? And so you need to be able to paint the picture of these are the reasons why the customer left

us. They will poke at that all day long.

us. They will poke at that all day long.

And especially if those churns went to a competitor, they're going to ask very specifically why did they go? Was the

competitor better than you, cheaper than you? Why? And then also, you're going to

you? Why? And then also, you're going to need to lay out new customer wins and what drove those. When you're a CFO of these companies and you have a small number of large clients, this is not a

crazy tough exercise. The hardest

situations for me are when I've been a CFO of a place that has a large number of small clients. Then it's a huge lift to be able to kind of nail down all this data and have explanations for all of

them. For SAS customers and other

them. For SAS customers and other customers, buyers really want clarity on which revenues are recurring. And then I love the second bucket which are nonrecurring

revenues that generally do recur. So you

have like a base of revenues but maybe they're not under contract. Maybe

there's some variability to it but you generally have a level of revenues that will continue to recur even though they aren't under contract. So they're kind of non-recurring recurring. And then

which are one-time non-recurring revenues. And the reason why they're

revenues. And the reason why they're going to want the exceptional level of detail on each of these buckets is a buyer will value your business using different multiples for each of those

buckets. No doubt they're going to love

buckets. No doubt they're going to love recurring revenues. They might kind of

recurring revenues. They might kind of like non-recurring recurring revenues, and they probably don't give a whole ton of value. They'll give some value, but

of value. They'll give some value, but not a ton of value to one-time non-recurring revenues. And so nailing

non-recurring revenues. And so nailing down that revenue story in detail and be being able to articulate what's going on in every one of those buckets is important. So then they're going to go

important. So then they're going to go to the next important bucket and that is your sales pipeline, your forecasted new revenues. And they're going to poke hard

revenues. And they're going to poke hard at that pipeline and they're going to look backwards at historical pipelines to see if the new client win rates that you're using to forecast your go forward

revenues are consistent with what has historically occurred. And along with

historically occurred. And along with this, they're going to want to ask a lot about your company's sales motion, the number of salespeople, what is the comp structure for those salespeople, do they have quotas, what is their typical quota

attainment? A lot of this will fall more

attainment? A lot of this will fall more towards the sales organization to prepare, but the CFO has got to really pull it all together and make sure it's it's accurate, telling the story that

that we're going to tell. You should

have all the stuff ready to go. For me,

honestly, it's good hygiene for companies to kind of perpetually have all this stuff ready to go. But again,

if if you don't have it, get the sales team and maybe some other folks. They're

going to have to start pulling that data from the accounting systems and probably the CRM systems. A few months into a process, I would make sure that my full financial model is ready to go because

whatever is in that financial model will be used to populate the raise decks or the sale decks. If you engage an investment banker, a lot of times they're going to want to use they're going to want to build out a model and use that model. I actually advise

against that. They don't know your

against that. They don't know your business. They're going to come in and

business. They're going to come in and quickly throw something together and you the CFO are going to have to be held accountable for every number in that model and you don't even know the model that well. And these things can be

that well. And these things can be really complicated. So, I strongly

really complicated. So, I strongly prefer using my own model and building it out to a quality where the investment bank just says, "Hey, great. That

model's perfect. Let's just use that.

We're not even going to waste waste your time to build it out. If I were going to sell or do a really big raise, I would do a sellside QV quality earnings study

before the process from a reputable QV provider. And these don't take long. I

provider. And these don't take long. I

mean, if you're not that big, this is like four weeks and they're not even that expensive. Unless you use a bigname

that expensive. Unless you use a bigname firm, then they become very expensive.

If you're a larger company, maybe a bigger growth equity firm, then maybe it's a six to 8 week process and a couple hundredk, but otherwise get it done. It'll it'll it's like an insurance

done. It'll it'll it's like an insurance policy. It'll build so much confidence

policy. It'll build so much confidence in the process in your your company. As

I said earlier, investors and buyers, they they love QVs and they focus a lot more on those than a stale audit. And as

I said earlier, you know, it tells the story of the company. And so to me, a lot of times a good QOV will avert random issues coming up during the deal process that can derail a deal. This

might sound funny coming from finance guy, but I suggest if the company has good visual assets ready to go, have the company itself build the overview deck for the razor sale, not the investment

bank. I always feel like investment

bank. I always feel like investment banks decks look a little sterile, like they they have some nice visual assets to them, but a lot of times they they're just kind of sterile. So, I recommend doing that internally and if you need to

engage some really good graphic designers, go do it. But I always feel like those are better. This one

surprises people, but the cap table is usually wrong somewhere on it. Make sure

it is 100% tied out and you have documentation to support every single item on that cap table. Nine times out of 10, there is at least one item wrong on a cap table and it might even be

>> 99 times out of a hundred. So, make sure it's fully tied out. buttoned up and you know sometimes legal owns the cap table, sometimes the CFO owns it. So whoever

you need to work with to get that done, get it done.

>> Yeah, I thought about that uh so many times. The cap table like it's, you

times. The cap table like it's, you know, 18 tabs in a spreadsheet that three fractional CFOs before have gone through and messed with it and it's like why didn't we just use one software to

put all this in? Why are we doing this in Excel? And it's Yeah. I've never I've

in Excel? And it's Yeah. I've never I've never seen a clean cap table.

>> No. And even when they're done in like a Carter or whatever, it's it's not that the software is wrong. It's just

somebody inputed something wrong. Maybe

they they didn't do the vesting schedule right. A lot of times it's somebody in

right. A lot of times it's somebody in their offer letter was promised options and for whatever reason, maybe even the board approved it, but it never made its way into Carta and into the cap table.

I've seen so many different things that are just not right in a cap table. And

at some point, you're going to have to rep to that cap table in a deal. And at

some point, maybe some attorneys are going to go through item by item and ask you for support. So, make sure it's 100% tied out. Maybe let's lightning round

tied out. Maybe let's lightning round the last couple of these. I really want to get to the uh what not many people know about you section, too. So, maybe

lightning round the last couple tips and then I want to spend some time uh talking about your other endeavors outside of CFO work.

>> Yeah, I mean people as a part of setting up a data room, lay out the files and and folders and have people start to populate them. But for me your data room

populate them. But for me your data room is important and it shouldn't be a dumping ground. So anything in there

dumping ground. So anything in there should have strategic value in the deal and you control CFO control the data room and don't use like a Google drive or anything like that. Go pay some money

and get a real data room where you can track who's looking at what and maybe you can give different levels of access to different buyers. Go do that. IP is

one I talk a lot to technology professionals about. If you are a uh

professionals about. If you are a uh like a software company and you're using contractors or third parties to do develop your software, that's a big deal. You need to make sure that you

deal. You need to make sure that you have all the documentation on anyone who ever was involved in the development that shows that you engage them on a work made for hire basis. Otherwise,

somebody after the sale can come by and complain and say, "Hey, I own that software. You owe me a big chunk of the

software. You owe me a big chunk of the sale price." And then the last piece of

sale price." And then the last piece of the puzzle is I always try to set expectations for our CEO because early on there's always a rush of initial interest from, you know, large groups of

people, 20 or 30 interested parties in buying you and that CEO is getting super excited and they're down at the Ferrari dealer, you know, looking at cars. And I

tell them that funnel is about to narrow super fast. So, you know, dial down your

super fast. So, you know, dial down your expectations. The 20 to 30 interested

expectations. The 20 to 30 interested parties two weeks from now that might be 8 to 10. Two weeks after that, it could be two or three. Two weeks after that, it might be zero or one and you'll start

to panic. So, don't get enamored of the

to panic. So, don't get enamored of the fact that so many people are initially looking at your stuff. A lot of times, they're just curious. They want to see your numbers. They want to learn about

your numbers. They want to learn about your industry. They might even want to

your industry. They might even want to see if there's any competitors to yours that are or they should be taking a look at. So, never get too excited until the

at. So, never get too excited until the deal is literally done and the funds have been wired.

>> Amen on that.

I really wanted to get to this question because as someone who's interested in in fiction writing and and other uh projects outside of finance, um I loved your story around this. So the the normal question I ask people is what is

something not many people know about you. I'm not giving you that latitude. I

you. I'm not giving you that latitude. I

want to hear about your fiction books.

>> Yeah, I've always loved to write, you know, for being a CFO. Uh and you know, we always have the reputation of not being the most creative people in the world. Anyone who knows me knows that

world. Anyone who knows me knows that I'm I'm just I've always been a really creative person and I love to write. And

so before I wrote the business book, I I've wrote uh two different fiction novels novels. They're both available on

novels novels. They're both available on Amazon and they're completely different from each other. They're they're really written in very different styles. The

first one is a book called Sal in the Suburbs. It's a really funny and dark

Suburbs. It's a really funny and dark story about an 80s pop culture spewing mafioso who has to hide out in a wealthy suburb and when he's there he finds out

that the people in the wealthy suburb are kind of more nonviolently ruthless than the people he knew from his mafioso days. It's a really funny uh book and it

days. It's a really funny uh book and it it uh minds a lot of like 80s pop culture movies, TV shows cuz S that's how he is. that's what he grew up watching and he talks a lot about um you

know stuff from the 80s that he he grew up watching as a child. My second book's totally different. It's a book called

totally different. It's a book called Stuck and it's about a musician who was almost a successful musician 20 years prior based on an album that he recorded when he was that was influenced by a

childhood tragedy. Now 20 years later,

childhood tragedy. Now 20 years later, he's scraping by playing small bars and revisiting that childhood tragedy with every single gig that he plays because that was the album that the tragedy gave

him. And doing that over such a long

him. And doing that over such a long period of time, it really starts to cause him to descend into some serious depression over that childhood tragedy.

And so the book is really about him coming to terms with that level of depression and trying to figure out how's he going to get out of it. It's a

quick read and if you like music and a good story, you'll enjoy this book. I

tried to pull in a lot of different obscure music, but sometimes it talks about really well-known music, but part of his life is influenced by the music that he listens to.

>> Super interesting. So, I have to ask you, having written a business book and two fiction books, you probably have all kinds of ideas kicking around. What's uh

what's book number four going to be? Are

you going to go fiction again or or or back to business?

>> Yeah, it's funny. I I I'm simultaneously writing two. One of them is a fiction

writing two. One of them is a fiction story, um I have three kids and because the books in the fiction novels I've written are a little bit serious. Uh my

kids have never been able to read anything I've written and so I've started to write something that's a little more PG kind of rated and I'm about um I think I'm about 60 or 70 pages into it. It's a really fun story

and then uh I just started we'll see if it goes anywhere. I'm trying to combine the two. When I was in business school,

the two. When I was in business school, we all read this book called The Goal, which was I I joke that it was a touching love story set upon the backdrop of a factory, but it's really it's a fiction novel that teaches you

about operational principles of running like manufacturing. And so I'm trying to

like manufacturing. And so I'm trying to create a new uh segment called Finnfic.

It's financial fiction. It's a story about a company that's going through an M&A process and the personalities involved in the M&A process and how everything looks from their point of view. And so I'm trying to create

view. And so I'm trying to create something that's a fun read where you can still learn something about business from reading it. I just started writing it. I'm already about 40 or 50 pages

it. I'm already about 40 or 50 pages into it. That's great. I'm picturing

into it. That's great. I'm picturing

when Ben Affleck had the uh was going through uh with all the stuff on the whiteboard and everything. You just put a little bit more educational accounting in there and uh well like the uh the guy that wrote The Martian pulled off.

There's great science in that in that book right?

>> Yeah.

>> Yeah. Yeah. Know exactly. Yeah. I uh my my kids, we'll be watching a TV show or movie and they'll they'll do some sort of word salad about business and they'll look at me and I'll be like, "Nah, it doesn't work like that." I just had that

the other night. We were watching a movie together and I I can't remember what the setting was, but they asked me about it. I'm like, "Nah, it doesn't

about it. I'm like, "Nah, it doesn't work like that at all. Not even close."

>> That's great. Um, okay. Well, I need to get to everybody's favorite question.

What is your favorite Excel function and why?

>> I'm going to disappoint the entire world, but I love Excel. I do and you would be truly amazed at how much I've been able to accomplish using VLOOKUPs

and sum ifs. So please do not judge me.

To me, the differentiator of Excel users isn't knowledge of fancy functions. It's

how you organize your data and your outputs. My spreadsheets are always very

outputs. My spreadsheets are always very clean, organized, and easy to update.

And if I try to if it's built where somebody else has to go in and adjust toggles or assumptions, users know exactly where they need to go and exactly what cells they can change and

can't change. And I always design my

can't change. And I always design my models so that if I get taken away tomorrow by the alien mother ship, someone else can figure out my models within about an hour. I am very proud

that like one of my clients they they just got sold and when we hired the investment banker and they looked at my model they said hey all good nothing to do here and they used my model for the

deal to me that's the the in rubber stamp hey this guy this guy knows what he's doing I see a lot of f fancy functions in like banker models sometimes I'll figure it out and say oh

that's interesting but I don't know I've been doing this long enough and it just works for me so I can accomplish I think I can move mountains with just a couple of basic functions starting with VLOOKUPs and cells.

>> Love it. When I was a guest on this show before I took over as host, VLOOKUPs was my answer and someone told me uh that that's how I dated myself as >> Yeah, now it's all X lookups. I see a

lot of index and stuff like that.

>> I It's never been an issue and I can bang out models fast and they're good.

So, why change?

>> Well, Rick, I really uh enjoyed having you on the show. really appreciate you coming on and uh wish you the best of luck with uh uh with your upcoming book and the ones you have out there. We

we'll be sure and put uh links to them in the show notes, too. So, this is a blast. I I know it's nerdy and we're a

blast. I I know it's nerdy and we're a bunch of nerds, but I love talking about this stuff. It's a lot of fun. Sometimes

this stuff. It's a lot of fun. Sometimes

it's more fun talking about it than actually doing it.

>> Right. Right. Well, how do you think I got this job?

>> All right, Rick. Thanks a lot. Thanks.