Balancing the need for day-to-day financial management with the demands of growing and expanding the business is a challenge. At Octaura, a startup founded in 2022 that provides an electronic trading and analytics platform for the syndicated loan market, the task falls on the shoulders of CFO/COO Jason Cohen.
As a new hire, Cohen embodies what he considers to be an essential trait for new hires at Octaura: They need to be comfortable juggling multiple roles and working in a fluid environment. Our Katie Kuhner Hebert asked Cohen about leading finance at such a young company while also juggling the role of head of operations.
How can a CFO effectively lead the financial strategy of an early-stage company?
The foundational elements of maintaining proper books and financial records must be built into your finance department, including an accounting system for paying employees and vendors. Hiring the right people is, of course, a crucial step. In a startup, the performance of each employee is crucial. You need to scale your business while also executing your processes.
Funding is a key component of early stage ventures. It's happening all the time. You don't go through a funding process, stop, and then come back a year later and raise more money. It's a continuous process.
Octaura was launched with the backing of seven of the leading dealers in the syndicated loan market. Can you share any tips on fundraising?
As I mentioned earlier, if you're a startup or early stage company, you should always be thinking about fundraising, as it takes most companies a long time to become profitable. My advice is not to chase profitability too much, or you risk missing out on important actions your organization can take to invest in growing your business.
The wrong approach is to avoid ongoing funding because you want your money to last forever. If you worry about every penny of your spending, you will inevitably end up underinvesting. [some] This is a very important area. You need to get used to the feeling of being out of money, at least for the first 3-5 years. Embrace it, don't avoid it.
To raise funds, you need to talk to people and build your network continuously. Keep existing and potential new investors informed and regularly report on your organization's progress. You never know when the business environment will change, which is why you need to raise funds from new and existing investors. If you wait to start talking until you need funds, it's too late.
Additionally, be open-minded about the type of investor your organization is looking for. Of course, some strategic investors are looking for profit, but they are just as interested in the strategic value you bring to their business and the market. Also, professional investors, like venture capital firms, can help facilitate a liquidity event or exit so that they and all of their equity holders benefit.
Can you share some best practices for handling the dual roles of CFO and COO?
Octaura is my first opportunity to take on this dual role after working separately in operations and finance, but throughout my career I've always found it valuable to step out of my “numbers guy” role and work collaboratively with all parts of the business.
I work with many teams, including go-to-market, product, and technology teams. We are constantly talking about how operations and finance can support each team's function. If they are building operations, when and how much funding do they need? Beyond funding, what infrastructure do they need to keep their projects on track and execute on the company's business objectives to achieve the desired results?
My advice is to take a systematic approach and work with your colleagues one step at a time. As the CFO, keep the overall financial goals in mind, but at the same time, put yourself in the COO's shoes and focus on all the little things that need to be done to structure the business to achieve those goals.
What is one piece of advice you would give to yourself before starting your role as CFO/COO?
There are two things: (1) develop your accounting knowledge, and (2) become a storyteller. Basic financial and accounting principles are essential to this role. Storytelling is something I personally work on all the time, and it's the most exciting part. You have to tell a story about what's going on so that people who aren't involved in the day-to-day operations can understand it. It's similar to writing a book. You want to tell a story that excites people.
