While the pandemic drove businesses towards digital transformation, Icertis CFO Curt Anderson said a big responsibility for a CFO is also managing the human capital and not just the finances
Anderson takes a wide view of fundraising and looking to go public, as he believes that each startup has a unique need and it’s not just about following preset notions
The role of CFO is about being the person in the organisation that pushes the organisation towards a common frontier and that includes various components beyond managing the money
Technology has enabled the startups of the new age to take a different route than spending hours dealing with spreadsheets to manage their business and their various operations. And with the pandemic driving contactless and paperless operations, this has become a need for businesses large and small. Like in sales and HR, even contract management is becoming an area where businesses are turning to SaaS solutions such as Icertis, PandaDoc, DocuSign among others. While this area is not as glamorous as many other sectors such as other enterprise tech applications in the post-pandemic world, it has definitely gained prominence.
Among Indian companies, the contract lifecycle management (CLM) space has seen Icertis rise to the unicorn club in 2019 and carve out a global brand. Founded in 2009 by Samir Bodas and Monish Darda, Icertis’ repertoire includes services such as CLM, risk management, proposal management and obligation management. Headquartered in Bellevue, Washington, the startup has offices in 20 cities and works with some of the giants of the business world such as Microsoft, Airbus, Cognizant.
Speaking to Inc42, Curt Anderson, the chief financial officer at Icertis, said that 2020 was a year unlike any other. “The fourth quarter for us was a record one, in terms of both new revenue and expansion revenue. We also brought on a record number of new customers this quarter.”
He feels that the pandemic has driven companies to digital transformation and it’s not a temporary phase. But companies catering to this segment still need to deal with internal challenges, and a CFO also plays a role in setting the right tone. “Technology’s probably your friend in that challenging environment. So the couple of things we did was think about the team and the people to make sure everybody was in good shape there. And then pretty quickly, we turned to understanding the risk to our business and how to manage that. The cash impact was probably the most important thing for us to do.”
Risks Amid Growth
Remote working has become the new normal and companies relying only on manual services had to face the consequences — whether it is taking care of the supply chain, streamlining the workflow or performing day-to-day operations without any interruptions. It also accelerated the entire market opportunity by a few years at the very least.
Icertis made the most of this launchpad, Anderson told us, but did not reveal specific growth numbers. “Our business actually saw a really nice acceleration in the back half of the year because of Covid-19. We saw a lot of customers leaning in and saying we need to get our hands around contract management because of Covid-19 and exposing employees. Now we are seeing a lot of companies accelerating their thinking around contract management.”.
However, like other tech companies, Anderson did face the challenge of evaluating the risks in an uncertain market, managing cash flow and striking a balance between the two. Weighing in on the same, he shared that for a finance professional, the key challenge is cash management followed by hiring the right talent. Dealing with finances can be tricky as a startup often has constrained funds but it’s an exciting journey for a CFO as it contributes directly to the foundation and growth of the company.
Anderson’s wide range of skills and experience have been a valuable asset for the company since he joined in 2018. The company has nearly doubled its headcount over the last 18 months, serving five of the top eight pharmaceutical companies, top eight IT services companies, three of the top five manufacturing companies and top seven technology companies. “We can sustain a high growth rate in the next three to four years easily reaching upper double digits,” he added.
Having worked at Microsoft and other tech giants, a startup is a new challenge for Anderson. So how exactly should CFOs view the startup opportunity especially because technology is growing so quickly, there’s a definite need for CFOs in startups. “This has been the time where I’ve gotten a chance to kind of be in the middle of everything, and to have my hand in strategy decisions and conversations in building the operational infrastructure to support the growth of the organization. To get involved in fundraising, that’s a new experience that you wouldn’t normally get in working in a big company, working directly with a board and in learning from the board, again, an opportunity you wouldn’t normally get in a big company.”
How A CFO Matures With The Company
Talking about the long-term growth trajectory, Icertis is not in a hurry to go public, Anderson claimed. The focus is to build an enduring company, widen their client base and it will do the IPO when it’s the right thing and at the right time. In fact, Anderson takes a wide view of this and it’s not just about following a preset notion.
“If it is something that’s useful to us in terms of either raising capital, or beneficial for our employees, then we will absolutely do that,” he added.
He believes that when a company decides to go public, there’s a lot of work that needs to be done from an accounting, finance, legal and HR perspective, so it’s important to be cognizant and go for an IPO only when the company is ready.
Once that is done, the next step is to set the priorities and objectives with the investors. He further shares that being on the same page with the stakeholders is crucial, and it is not a challenge with the right set of investors as it is a part of the journey they’ve all agreed to go on. Of course, this changes from startup to startup and each company has its own needs.
“As companies grow, they go through very different phases, and it’s very challenging. And each stage has its own challenges, a company at $50 Mn revenue is very different from a company growing. And then when you get to that kind of $100 Mn range, going to $500 Mn, that’s altogether a very different company again. So as a CFO who goes through those stages in a company, you might literally experience three different companies by being at the same company.”
All Comes Back To The Vision
Investors are often seen as the banks for startups and Anderson in this interaction with Inc42, talked about the importance of choosing the right partners in order to grow. He said that the journey of a startup is a bumpy road and if the mission and values are aligned, it is easier to go through the tough times together. “Samir (Bodas, the CEO of Icertis) and I debate, we challenge each other, and that relationship, grounded in values, and openness, that we have is important — to just be really open about how we feel about these things and the perspectives we bring. And we’ll argue back and forth but in the end, we get on the same page to make the best decision for our employees, customers and partners.”
He also believes that transparency is really important between the board and the CFO, and the CEO in order to be on the same page about the growth. As a finance professional, one has to be open, honest and have a relationship that is oriented towards doing the best for the company.
“The role of CFO is about being the person in the organisation that pushes the organisation and ensures that the company has got all the ingredients lined up to execute well, and to drive towards success,” he signed off.