A Few Good Tech CFOsBy Rebecca Morrison, published on Jun 4, 2019
Welcome to another edition of the Corporate Finance Digest. Each week, the Lola team scours the internet to find the news and content that you need to know about.
This week, we’re covering WeWork’s controversial valuation, why CFOs are in demand in Silicon Valley, technologies to help CFOs become better at their jobs, and a whole lot more!
Let’s get into it.
Silicon Valley Needs a Few Good Tech CFOs
Good news for all you CFOs and soon-to-be CFOs: you’re in high demand. The Wall Street Journal dropped two crazy stats on us:
- Only 71% of US unicorn companies have a CFO.
- It gets worse when we look at companies valued at $500 million - $999 million. Only 64% of them have a CFO.
It’s not that these companies don’t want to fill their tech CFO vacancies, they’re all just looking for a needle in a haystack.
These companies want someone who has been there before and successfully managed the financial role at another high valued startup. The obvious problem is not many people have done this.
WeWork's Controversial $47 Billion Valuation
Speaking of unicorns, WeWork is one of the highest valued startups around. But, they have a few problems, according to Vox.
First, they aren’t a tech company. They’re actually a real estate company. You already knew that, though, right? This isn’t necessarily a bad thing because real estate is usually a good business to be in.
“Usually” is the keyword there. Real estate becomes incredibly tough during economic downturns. Real estate companies typically build up their cash reserves and lock tenants in for long term leases to make it through economic downturns.
WeWork isn’t doing either. Are they just going to crash and burn?
How Tesla Could Reduce Expenses More Efficiently
Last week, we mentioned that Tesla could be out of money very soon. This week, Abacus wrote a blog post detailing how Tesla can get control of their expenses. Here’s what Abacus recommends for Tesla:
- Implement real-time expense reporting.
- Organize expenses in a way that allows Elon Musk to quickly understand hard-to-control categories.
- Put blocks in place that prevent certain expenses from happening. That would allow Musk to focus on outlier expenses.
There’s a lot more to this piece, but we can’t give it all away here.
How AP Automation is Making CFOs Better at their Job
With the digital disruption in full swing, accounts payable is one of the areas that represents the biggest opportunity for automation. The finance team over at Mineraltree wrote about three ways AP automation can help CFOs:
- AP automation makes it easy to optimize cash flow. Payments can work when you need them to, rather than when you have time to get to them.
- AP automation makes fraud prevention even easier.
- AP automation can save you up to 64 hours per month!
Plenty more to learn from Mineraltree on this topic.
P.S. We’re joining forces with Mineraltree for a panel discussion about how technology is transforming finance. Join us on June 11th!
CFOs Could Benefit From Digital Technologies in Finance
CFOs essentially have two functions: governance and guidance. Both of these functions can become significantly easier with AI and different types of automation.
Governance tasks have to follow strict rules and guidelines. They also tend to be the most repeatable. That combination makes them perfect for automation.
Guidance on the other hand, tends to be more about decision-making. That’s harder to automate, but with new AI tools, it’s getting a lot easier.
If you’re ready to bring digital technology to your finance department, this article is for you.
The CFO Path Includes Diverse Career Steps
Robert Half conducted a study and found that today’s CFOs have had very diverse careers:
- 36% of financial leaders have worked in business development
- 35% have held administrative positions
- Human resources also ties admin with 35%
- 33% of today’s finance leaders have been in technology roles
- Only 14% have spent their entire careers in finance.
Interesting stuff, right? Those stats mean that if you want to be a finance leader, you’re going to need a diverse background. Learn to master different skills, and work with different departments.
No matter where you are in your career, you’ll want to read this article.
That’s everything I’ve got for you this week. But I’m curious, what did you read last week? Find Lola on Twitter and let us know!