Rockstar CFO 2014

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Matt Williamson is CEO and co-founder of Windsor Circle, a fast-growing, Comcast Ventures-funded marketing analytics startup in Durham. This piece was originally published on his blog, The Next 10,000 Hours.

Tim Oakley Headshot 2014
Tim Oakley, CFO of Appia and former CFO of iContact (pictured here), is one of the Triangle’s best entrepreneurial executives. With multiple exits and financings under his belt, and a commitment to servant leadership, we are fortunate to have him mentoring and guiding a generation of entrepreneurs (like me!) in the Triangle (the New Entrepreneurial Hub of the South). Tim also formally does executive coaching at the Carolina Clinic at UNC.

As Windsor Circle goes through the process of selecting and hiring a Director of Finance and Operations, Tim offered to spend some time with me thinking through strategy and candidates.

The first section is Tim’s “5 R’s of Finance.” The following sections come from a scoring matrix that Tim shared with me. I’ll use these subject areas to frame this post. I’ll also offer suggested questions in italics to expound upon the areas in which one is qualifying a candidate.

The 5 Rs of Finance

This is a framework Tim shared with me for how to think at a high level about the G&A (general and administrative) function. I reframed it slightly to address how one hires in this function.

  1. Radar – Candidate has the systems, processes and management reporting that show issues early to be addressed and to capitalize on opportunities.
  2. Risk – Candidate can take calculated risks, identifying lower, expected and upside scenarios. The candidate should actively work towards “No Surprises” (especially on the downside!)
  3. Resources – Candidate needs to be able to allocate resources among multiple investment opportunities, and map them to present value of future cashflows (ie value), develop the people that work for her or him, and to support customers. Everything this function does should support “Selling Something to Somebody!”
  4. Reality – The candidate must collaborate with company leadership to define what the REAL story of the company is through monitoring metrics and relational and market information, and seasoning it with judgement and wisdom from her/his experience.
  5. Relationship – The candidate has to be able to built a trusted connection with the executive team and team members. This is especially true with the 15%-20% of the leadership team that is really driving the business (likely, but not always the CEO).

CFO Functional Knowledge – Day to Day

This section is from Tim’s scoring matrix, with elaboration based on our conversation.

Accounting, Financial Statements, and General Ledger (GL) 

This seems obvious but Tim pushed me here a bit. There’s a difference between financial planning and modeling, and the act of closing the books on a routine basis. Part of this is knowing how to handle accounting complexities in a subscription revenue business (such as deferred revenue schedules). Another part of this is testing for the discipline to logically order a complex set of tactical requirements and keeping those trains moving on time.  

Tim shared that at iContact, he outsourced the bookkeeping function for quite a long time to a contract accountant.

Questions to ask during an interview:

Describe your experience closing the books and presenting financial statements to investors.

During the last audit, what did you find to be the most frustrating about the process?  What did you do to manage through it?

Imagine you’ve earned the job at Windsor Circle as Director of Finance and Operations.  Take 5 minutes to whiteboard your monthly, quarterly and annual responsibilities and then walk me through how you will manage it.

Payroll and Accounts Payable (AP)

Here, Tim was coaching me to think about the outflow of cash in one’s organization. Getting everyone paid on time, and knowing how to manage vendors and contractors (and their payment terms) are critical skill sets, particularly during the early trajectory of a company, given how crucial every dollar is.

Questions to ask during an interview:

Describe an instance where payroll was mishandled and what you did to overcome the error.

What is your philosophy on payment terms and how to pay vendors?

In the past, when faced with a cash shortfall, how did you manage AP to get the desired result?  What was the desired result?

What payroll systems do you have direct experience with?  If you earn the job here, what would you change about our current payroll system?

Accounts Receivable (AR)

Clearly, this is the inbound cash function. In most businesses, these are payments from customers, but can also include payments from partners in the form of revenue sharing, commissions, etc. As we scale from hundreds of clients to thousands of clients, with varying contract terms, and potentially across various products with different product and service profiles, this can get complex. Tim wanted me to be sure I understood how someone in this function can keep a tight rein on the very source of life…  one’s inbound cash flow!

Questions to ask during an interview:

Describe the system you have used in the past to manage your client ledger.

How have you handled collections.

What critical measures do you use in this function? How will you know that you are collecting cash well?  (Days Sales Outstanding, or DSO, is key metric that should pop up in the answer).

Customer Resource Management (CRM) and IT Systems

I’m actually combining two sections here from Tim’s scoring matrix. What (I think) I learned was that Tim was wanting to dig into a candidate’s ability to run the technology that runs the function. CRM systems like or NetSuite allow one to keep all recorded interactions in a single place. (At Windsor Circle, we strive to a corporate value of “Single Source of Truth” in our CRM and actively work to get everyone communicating through a single platform).

As he worked me through the IT systems component, he seemed very focused on the interface between the payment systems and billing technologies (at iContact, it was built into the customer facing app and required a pretty light implementation of QuickBooks to manage…  in other companies, the contracts and billing process are paper driven and may involve much higher degrees of complexity in the IT systems).

Questions to ask during an interview:

What CRM systems have you used in the past?

What complexities have you witnessed in the interactions between the CRM systems and the billing technology that you used in your prior roles?

Let’s say you won the position here, and had to completely revamp our CRM and billing systems…  whiteboard a plan for how you would tackle this and walk me through it.


An audit will be handled by an outside firm, so this line of questioning has more to do with how to manage an audit or review process.

Have you led an audit before?

What criteria is most important to you in selecting an audit firm?

What support systems and resources are required for a proficient audit?
Certified Public Accountant (CPA)

This is kind of a yes or no question. Either the candidate is a CPA or not. The knowledge you’re looking for here is an authoritative level of expertise with regards to Generally Accepted Accounting Practice (GAAP). This, too, is a skill set that can be contracted in, but having someone inside your firm who is a CPA provides for a level of efficiency, not just in audits, but in the general running of the finance function.

Planning and Analysis

A key indicator of expertise in this area is deep financial modeling capabilities. In our selection process, we put one of our candidates under NDA and had her/him dig deep into our existing model with recommendations and analysis. If the prior functional areas have to do with the tactical aspects of running the business, this subject area has to do with the strategy of running a business. One must quickly be able to model various scenarios, answer what-if statements, and think about future metrics assuming various aspects of the model come into being (or don’t!).

Questions to ask during an interview:

I’m going to have you sign an NDA, and then provide you with our financial model. I’d like you to hit hard and pull no punches in preparing the 5 top things you’d modify about our business and our financial model.

In your opinion, what are the hardest parts of the financial model to get right?

Whiteboard the major aspects of your financial model and talk me through interdependencies.

Mergers and Acquisitions (M&A), Fundraising & Capital Markets

Deep expertise here is usually a CFO-level function. Managing the complexities of due diligence and deal terms, as well as bringing the implied trust and connections of one’s personal network, are core aspects of this functional area. If you’re hiring for a manager or director, exposure to these skill sets would be a plus, but perhaps not a requirement.  If you’re hiring for a CFO, they are a must.

Questions to ask during an interview:

Have you been through an acquisition?  Please describe the scenario and your role in it.

Describe your experience with fundraising?

What are the merits of venture debt versus equity?  Educate me on the terms that I’m likely to encounter in the market?

Have you ever been on a team that did an IPO?  What was that like?  What did you do well?  What did you do poorly and how did you overcome that?

Business Acumen

When Tim hit this area, it became clear to me that he was borrowing from a fair amount of intuition from years of experience. What he seemed to be looking for was a candidate’s ability to rise above the noise of the function and sense what was happening in the business and to be an active participant in the prediction of what would happen next. This also has to do with savviness… sensing what’s happening in the team, in the market, and in the ecosystem. I perceived here too that deep business acumen was either an indication of a rising star or someone that had been around the block a few times.

Questions to ask during an interview:

Describe where you see SaaS, as a concept or an industry, evolving to in the next 10 years.

Describe a hunch or a prediction in your current role that came true. 
  • How did you communicate that hunch?
  • When it came true, describe the reaction of your peers?
  • What would you have done differently?
You’ve gotten to know our business.  Make 3 predictions and back them up.

Fitting the Candidate

There were several other important criteria that Tim looked for in his matrix:

  • Rapid Growth Company – There’s no doubt about it…  the fast pace and ability to make decisions in the absence of data points is a critical ability.
  • Executive Team/Board/Culture/Communications – One could describe this as a test of anyone coming into the organization, but given that this person has to interact with a range of stakeholders on a variety of important topics from hitting revenue targets, to “zero cash day” to payroll, it’s important that you select someone that will fit well.
  • Tech Industry Experience – For us, one of the key aspects of this vector is Software as a Service subscription revenue concepts.
  • Wants The Position/Hungry/Something to Prove – Again, these are good things irrespective of the role. In the finance function, I’ve now seen a couple of scenarios where a FP&A (financial planning and analysis) person from a large firm was actively seeking are more generalized role in a startup. The hunger for the exchange of risk for higher responsibility, greater title and a more diverse set of learning experiences is critical.
  • Size of Company – Related to high growth, but different in that a small company requires everyone to wear lots of hats, and usually in a very unstructured environment. In small companies, everyone has to be willing to get dirty and get the work done. Candidates from large organizations may say they value this freedom and flexibility, but if their resume reflects only large company experiences, dig deeper here.
  • Managed and Led People Human Resources – Tim really pushed me here. One of the candidates that we considered hadn’t managed others before. This function has to manage both internal and external stakeholders to do well. He asked me several times about my confidence that our lead candidate could step into this capability effectively, or if we’d run into issues with inexperience on this front.