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Finance Interview with Shane Leonard

We caught up with Shane Leonard, a highly commercial CFO to get his perspective on the CFO role and how it can play a key role in growing a technology company;

How did you become a CFO?

My background is as a CFA and I became a CFO later in my career. The natural career path of somebody to become a CFO is to start in an accounting firm, build their career internally and then move to the company-side, eventually being promoted to CFO.

I came from a different path, working in investment banking – which helped me to understand the power of numbers to tell stories. If you understand the numbers well and are able to identify the key drivers of a business, you can help manage the business and tell the story clearly to investors. My background as an analyst helps a lot when it comes to fundraising and managing relationships with investors.


What advantages do you think your background gives you as a CFO?

One of the skills you learn in finance is to synthesise the data to tell stories. Every day you deal with executives from large corporates and investors who are often very smart but don’t have much time.  Telling stories from numbers is a critical skill that entrepreneurial startups are looking for.

You tend to get the right investors if you tell the right story. When you are an early-stage startup, there is a danger of trying to find as many investors as possible, but it’s important to identify the right investors for you and your product.

The other skillset that you can bring from finance is being transactional and closing deals. If you don’t close deals, ultimately there is no business. In banking, it’s all about transactions and keeping things moving. You often have multiple deals in process at the same time, it’s not sequential.

Strategic financial planning is about always thinking about optionality. Lots of tech businesses make the mistake of assuming that fundraising is a next step rather than an ongoing process. Raising finance, buying and selling businesses and finding strategic partners are all options and you have to constantly ensure you are well prepared for the future needs of the business.


What do you see as the primary responsibilities of a CFO in a high-growth tech company?

The CEO is there to make sure that customers are happy and to hire the right people. The CFO makes sure everybody gets paid. They are very different roles.

Particularly in high growth businesses, the CFO is becoming more of a guardian of financial and key data. That data can then be used to help inform decision making across the business. Since I sold my first startup, I’ve seen lots of high growth businesses where the founders are very focussed on the business at a high level and tend to avoid the detail of the numbers. They see the financial side of managing the business and serving investors as a necessary evil.

I see this tendency in many of the companies I have worked for – finance is slightly neglected. In a sense, that data sits in siloes and is sent in raw form to the investors as soon as it is produced. People don’t often get deep into numbers and try to understand what the data implies. People don’t necessarily build proper financial models. I think it is eye-opener for founders to bring in a commercially oriented CFO. It’s about providing valuable information and insight that helps the business to make better decisions.


Do you have any tips when it comes to managing investors?

I think it’s better to over-communicate rather than under-communicate. Investors hate it when they are starved of information. Often there is a lack of data delivery to the stakeholders who are ultimately the owners of the business. They may be minority shareholders compared to the founders, but they are owners as well. They and their friends will be pipelines of new money and they may even bring in acquirers in the future, given their industry connections.

It is also important to communicate effectively with investors during good times because there will always be bad times. If you suddenly ring them up and tell them you have a problem having not spoken for six months, it won’t look good. If you have kept your investors well informed from the start, your investors will be much more supportive during difficult times.

Dealing with investors in high growth businesses is about putting in the time to build strong relationships. Life is all about building strong relationships. If you help people, they will help you back, especially when you have a problem. Investors will generally be happy to help you as they know that they are contributing to their investment. They want you to be successful.

Separately, founders should be careful about “soft no’s” from investors – there are investors who will say “we won’t invest in you because you lack XYZ”. It’s much more helpful to listen to those who want to invest in you. Do not be swayed by the people who have no intention of giving you money.


Lots of entrepreneurs find fundraising exhausting and time-consuming. Do you have any tips or advice for them?

Every market is different, and the current market is extremely different from the market two years ago. Look at the current market and recognise what you are selling into. People often look at news sites like TechCrunch and say, “Why didn’t I get that?”. Today’s market is relatively simple in a sense that it always comes down to whether you have proof points. It is not about vision, the addressable market, or previous success in selling your business. It is about having a product that has traction.

Fundraising is not easy and can be draining so it is important that the CEO has the right support around them. If you have two people pitching to an investor, one of you can focus on talking while the other can read signals from investors. For the same reason, you shouldn’t use a script when pitching because it’s harder to pay attention to reactions and change tack accordingly.

I often find it easier to send the presentation materials beforehand, quickly run through the document for the first 5 minutes and dedicate the rest of the meeting to questions and answers. It’s a great way to get a deeper insight into how that investor is thinking about your business. Never pitch in a one-sided way.

Venture investors, especially European investors, are usually more focused on milestones and proof-points than angel investors. And American investors are much more brutal than European investors – shutting down businesses and making drastic reforms are much more common when things don’t go right.


It’s been a tough couple of years for tech companies – do you see any green shoots of recovery or will the tough times continue in the next few years?

I expect investors will start ramping up their investments soon. Investing in single digit growth businesses becomes rather draining as the time goes on and investment in potentially high growth businesses will become popular again. Once interest rates stabilise and inflation moderates, people will naturally seek more risky investments that can potentially deliver a higher return. I don’t see any reason to be pessimistic about the future of tech funding.

It has been tough for pre-seed and seed-round funding rounds – a lot of companies are finding it really hard to raise money. Valuations haven’t been in line with what founders were hoping for. Having said that, deals are still getting done and investors and funds are returning to the market.


What career advice would you give to your 21-year-old self?

It depends on if you are talking to someone who is risk averse or not risk averse. If you are not averse to risk, I’d recommend working in a startup rather than a bank or a large financial institution. You’ll learn much more about finance and how to build a business that way. There’s no substitute for experience in entrepreneurial, high growth environments.