David Harutian, VP of Finance at Qualified, brings his experiences as an adviser in investment banking and corporate development to building a finance team for a hypergrowth tech startup. While his time working on the advisory side was invaluable, David shares the satisfaction of working in-house, embracing an entrepreneurial mindset and building a foundation for success.
David Harutian started working at Qualified just after they secured their Series A financing, and helped close a $51M Series B in May of this year. His background as an adviser in investment banking and corporate development helped David contribute to the diligence process and puts him in a unique position to nurture investor relationships.
Like a lot of tech companies, Qualified hasn’t slowed down during the pandemic. Instead, David’s been there as they’ve tripled and quadrupled their growth. But as he’s forecasting for investors and the board, he emphasizes taking a conservative approach and making sure you’re analyzing the company’s potential while keeping in mind the macroeconomic environment. Heading into 2022, David foresees more growth for Qualified, and consolidation and marketing spend for the industry at large.
David structured the finance team with proximity to data as a top priority. He stresses investing in data and analytics, technology, and data scientists early on for a hypergrowth company so you are able to accurately forecast and drive insights. Part of this investment is hiring the right talent that will be able to transform the data to move the business forward. David underlines recruiting for an entrepreneurial mindset and seeks out future employees who are problem-solvers who want to work as part of a team towards common goals.
While David shares that he doesn’t see spreadsheets going away anytime soon, the technology his finance team looks to is best built on a strong foundation of understanding - which spreadsheets can help cultivate. Right now, the main focus at Qualified is spend management and ERP.
On this episode of The CFO Playbook, David Harutian, VP of Finance @ Qualified, talks about taking the leap from the advisory side to working in-house, shares lessons from Qualified’s latest financing round, and discloses the technology his team has prioritized to help scale finance on pace with the business.
Name: David Harutian
What he does: David Harutian is the VP of Finance at Qualified, a conversational sales and marketing platform. David brings his experiences as an adviser in investment banking and corporate development in-house leading the finance team of the hypergrowth tech startup.
Key Quote: “My biggest advice that I've always given to others is just make sure that your numbers are accurate and that you account for them in an industry standard way. Be more on the conservative side to leave room for upside.”
Where to find David: LinkedIn
Great finance team leaders think like an adviser
In joining Qualified, David made the leap from working in an adviser role in investment banking and corporate development to working in-house on the finance team. In his advisory capacity, David didn’t get access to the day-to-day infrastructure of a company, so as VP of Finance at Qualified he has a higher impact on the business and its trajectory. That said, his advisory experience has been invaluable to financing rounds, developing relationships with investors, and understanding the market.
Choose investors who provide more than a high valuation
Qualified raised a Series B round in May 2021, buffeted by a favorable market for tech companies. David stresses that the most important aspect of the raise was ensuring that the investors would be willing to develop strategic partnerships with the leaders at Qualified. He says that when you find the right investor who understands your business, they’re able to give you the right valuation as well. And they will help steer the company in a favorable direction during the uncertainty of the pandemic.
Invest in data and technology early, but make sure you build it on a solid foundation
Before your company hits a hypergrowth stage, like Qualified has reached, David underlines that it’s imperative that you invest in operations so that everyone is communicating accurately and the data is flowing to the right locations. If not, you won’t be able to extract it and analyze it. He says that it’s a lot of investment upfront, but it’s worth it because you can rely on the insights and forecasts that come out of it.
Hire candidates with an entrepreneurial mindset
While David says that they make sure salaries are competitive when hiring, in the tech startup space, companies need to provide more to entice the right talent. When growing his finance team, David appeals to candidates with an entrepreneurial mindset who enjoy the challenge of working together to achieve a daring goal.
“A lot of marketing spend, a lot of consolidation. Barring any macroeconomic conditions, the IPO's will most likely continue, especially with the rise of new ways that you could IPO like using SPACs, et cetera. So, we’re keeping that macroeconomic world in mind to understand what our growth needs will be and how we're going to hit our company goals.”
“We try to have a centralized structure where anything that has to do with data is living within the finance and business operations team. Because...we are touching every department. We understand their specific nuanced operational needs. And we want to make sure that we have the right data that we're collecting, not just from their department, but from other departments to give them the proper holistic, strategic advice to hit their departmental targets.”
“I think a lot of it comes from also asking the right questions. We don't necessarily go in and say, ‘what should we do a week?’ Come in with multiple strategies or multiple scenarios, and we try to get their perspective because they're so close to the market. They understand what has been working with other portfolio companies that they have invested in. So we are in a way also positioning our questions in a way to get the best answers that would really help us run our business.”
“At a certain point within a company’s trajectory evolution, you begin looking at bottom line metrics like your cash flow and your spend efficiency, and [begin] to establish more what we call hard budgets versus soft budgets. We don't want to restrict departments by giving them hard numbers right away because it's less efficient at our stage, but we do want to begin introducing the concept of letting them know that we're monitoring your spend.”
“What I found to be the most helpful is really get to know your executives, learn how to communicate in a concise manner, understand what the specific problem sets are and the targets are and try to solve them as it pertains to the unique situation of the company...There is a lot of advice out there and there are a lot of great case studies that should be read and understood of how some successful companies scaled and how other VPs and CFOs were able to assist in that scaling process, but ultimately there's always unique nuances to every company. It's much better to get in the habit of understanding how to solve a problem that is unique to the company, and be able to build on that skill set to understand exactly what needs to be done while using some of the extra case studies, and historical data as a backup.”
“Being remote–obviously technology has really helped. Being able to do Zoom meetings and have a regular check-in cadence has certainly helped us out. We are investing more and planning more into team culture activities….what I try to do at least within my department is make sure that there is a regular cadence of meetings, and transparency. We want to make sure that everyone understands what they're doing, how what they're doing is helping the company and the organization. And I try to always have check-ins on conversations with my team about their personal career growth and where they'd like to see themselves grow in within the company as well.”
“Strategic partnerships with our investors was probably the most important aspect that we were going for rather than the highest valuation number. When you find the right investor who understands your business, they are able to also give you the right valuation as well. It kind of falls in place. For a growing company that is showing a tripling and quadrupling of historical performance and is forecasting tripling and quadrupling again, there is always the question of showing evidence for product market fit and then how to craft your go-to-market strategy in order to actually achieve that. And that is when really good key investors, strategic investors would be quite helpful.”
“What I've seen previously is that if you are going to market and shopping around a deal to investors and those numbers aren't concrete and there isn't enough proof behind it, or showing how you got your numbers, then investors sort of lose confidence a little in the quality of the rest of the numbers. So that is my biggest advice that I've always given to others as well, is just make sure that your numbers are accurate and that you account for them in an industry standard way. Be more on the conservative side to leave room for upside.”
“We're very transparent in letting [candidates] know what problems we're facing and how their effort would be able to assist us in achieving these solutions and get us to the next level of growth. And we find that when we're recruiting at the tier one top universities for that kind of talent, there's a lot of curiosity there and they do want to put their skills to use, to solve problems that have an impact versus in a zone where their scope of work is limited.”
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