While joining a startup in an industry undergoing transformation is exciting, which is one of the reasons why long-time CFOs from larger companies are attracted to such companies, the chance to build a finance organization from the ground up is also a strong draw.
Auto industry veteran Todd Pepmeyer is one of the chief financial officers making the leap in the current business cycle. In March 2023, Pepmeyer joined Indianapolis-based Alive AI, which automates last-mile delivery of consumer and business packages. The company calls part of its service “Mailbox-as-a-Service.”
Pepmeyer, who worked in finance at Ford Motor Company and then Rolls-Royce for 15 years, now has a chance to lead a crowdfunding startup through the challenges of operating at scale. As CFO, Pepmeyer says he's “transforming.” [the] It will build a “management engine for the business” that will fit its rapid growth plans “without adding unnecessary operational costs.”
In an interview with Katie Kuhner Hebert, Pepmeier spoke at length about his plans for Arrive AI and the career lessons he's learned from his long tenure in the finance industry.
As Arrive AI's first CFO, what kind of foundation are you building financially?
We choose service providers that can scale with us. We currently handle payroll, accounting, invoice payment and risk management as we aim to grow rapidly without adding unnecessary operational costs.
We also continue to develop relationships with new customers and partners for our services. As CFO, I advise my team on pricing strategies, deal terms and identifying deal risks.
Additionally, our financial model has evolved to the point where we can predict future performance based on current assumptions, and it is my job to grow the business in line with that plan and increase profitability.
Finally, we plan to list on the Nasdaq later this year, and I am working with advisors and investors to ensure the company has the capital to continue to grow. Arrive AI already has nearly 5,000 shareholders, with whom we communicate regularly. They have invested in our team and vision, and I want to ensure that we deliver on that investment every day.
Given the strength of our leading patent portfolio, we are exploring several strategic acquisitions and partnerships to accelerate our growth. As CFO, I take these opportunities seriously and ensure we conduct appropriate due diligence on each one.
As Arrive AI matures, what are some of the financial challenges you face, particularly around risk management?
Financial leaders across all industries have come under increasing scrutiny over the past few decades, forcing us all to re-emphasize internal controls.
Arrive AI has always chosen to act as a public company and conducts audits in accordance with the standards of the Public Company Accounting Oversight Board. These audits are costly and difficult, but they give management and investors confidence that we are following the rules and standards of a public company.
I think security has also become a challenge these days. Technology has advanced, increasing the risk of fraud and unauthorized access to information. You may have seen emails that are obviously phishing, asking for money, but now criminals are more sophisticated. We have also seen very elaborate attempts to access funds from accounts. As a team, we have to take this very seriously. We have been regularly discussing threats with all employees and strengthening our defenses.
What advice do you wish you had when you first became a CFO?
First of all, never get too comfortable. No matter how well things are going, be prepared and open to change. Change can be an opportunity to add something new to a CFO's toolkit. There is a lot to learn throughout your career. Personally, I wish I had sought out a change sooner. … CFOs with diverse experience across multiple industries and companies can be extremely valuable leaders.
Another piece of advice I always give to finance professionals is to be curious outside of the finance and accounting silo. Having a deep understanding of the technical and sales aspects of the business is extremely useful for a CFO. Knowing how things work and what challenges other functions face helps you make better and more informed financial decisions. Plus, it's easier to share financial information with the whole team if you speak their language.
How important is it for finance leaders to stop, reflect and reset during their workday?
I've made this a priority since early in my career. For several years, I would take a small group of coworkers out for a short walk and a quick meal almost every day. I always looked forward to the time and made sure to block it out on my calendar.
Professional athletes need halftime to rest, adjust, and prepare for the rest of the game. This short break gave us a few minutes to escape the “heat” of the day. We got to know each other as people. This break helped me decompress, reset, and prepare for the second half of the day. And the value of these relationships goes beyond the workplace.
Even now, although things are different, I make it a point to step out of the office during working hours. Time away from the office reminds me that there is more to life than the specific tasks at work. When under time pressure, it's easy to get overwhelmed with a long task list. A clear head and a refreshed attitude usually makes me more productive.
I also take very seriously the need to maintain a schedule outside of the office. I am able to respond to everyone more effectively when I have a good balance between work and personal time.
