A founder for founders: Here’s how startups strengthen their finance management
At 17, Sebastian Janus founded his first e-commerce company. In his mid-20s, he became CFO of Footlocker Europe. Today, Sebastian successfully advises other founders with his consulting company ScaleupLab. In this interview, he reveals how many founders make life unnecessarily difficult for themselves and how startups can make management of their finances more effective.
Sebastian, you were CFO of a large corporation. Today you advise startups as an interim CFO - what is the biggest difference between the two worlds?
In corporations, the function of a CFO is often limited to accounting. As the CFO of a startup, the individual thinks and acts much more as an entrepreneur - and influences the strategic direction of the company. That's one of the reasons why I decided years ago to get back to the world of startups - to share my experience with other founders.
ScaleupLab offers startups a service called CFO-as-a-Service? What does that mean and why do customers choose it?
Founders usually take care of several areas operationally in the beginning - including finance. Often, the role of a CFO is also outsourced to tax consultants. However, the early appointment of a CFO can be crucial to the success of the company. With ScaleupLab, we offer the CFO role for an agreed period of time and push the topics of finance, business model and scaling - under the credo "From founders for founders".
How do you imagine the daily life of a CFO-as-a-Service at young startups?
Basically, of course, it depends on the business model and the available resources. The range of tasks includes monitoring expenses and liquidity, being responsible for controlling, forecasting and reporting, and even accounting and taxes. And of course, what a CFO is constantly concerned about in the early stages is ensuring sufficient capital to drive growth.
What tips do you have for founders who are in an early-stage startup?
Smart financial processes make the job easier for founders. Especially if they are not dedicated finance experts, it is helpful to automate crucial systems early on. For example, synchronize accounting software and invoice management.
There are many issues that are not considered at the beginning: Typical startup expenses such as marketing, licensing fees and software subscriptions can only be paid by credit card. This leads to founders meeting the expenses in the beginning with their private cards, with personal liability. There is a better solution for this today with Moss, for example.
How does the role of the CFO change in startups in later phases?
With each growth phase, it becomes more important to think about a proper setup: Who is responsible for what expenses and what budget? What do the approval processes look like? How do I design everything as efficiently as possible? The longer you wait, the more the administrative effort required grows.
For things like this, there are digital tools like Moss now that make expenses and budgets traceable in real time - approval processes can also be defined digitally. That's ideal for fast-growing companies. That's because the tools make it easier to scale by cushioning the administrative burden that otherwise comes with growth.
You describe yourself as an organization freak - with which processes do many startups make life unnecessarily difficult for themselves as far as finances are concerned?
In 2021, the most used tool for expense management is still Excel. It usually looks like this: The CFO sets up a master spreadsheet and an employee collects all transaction data on it. The document is then either sent to the tax advisor or the data is laboriously entered into DATEV. This also costs the CFO time and nerves. In a startup, the CFO's focus should be on more important issues such as fundraising.
What approach do you recommend startups take instead?
Ideally, startups should create a digital control center for their CFO - comparable to a cockpit for a pilot. The most important processes run on autopilot. All expenses are visible at a glance. And the CFO can fine-tune the systems at any time.
Such a set-up makes it much easier for start-ups to manage finances and focus on the strategic goals of the start-up or scale-up. This is exactly what SaaS applications like Moss enable today, offering start-up founders a good solution.
More about Sebastian Janus
Interim CFO, founder and passionate entrepreneur: In addition to the consultancy ScaleupLab, Sebastian also founded the platform Startup & Tools. With Diversity Wiki, he is also committed to inclusion and diversity. Together with his wife Olivia Janus, he founded the start-up Beautyself and takes on the position of CFO there.