The role of finance in a start-up’s sustainable growth: the stories of Silverfin and Smappee

How do you look back on your development with the company?

Tom Libbrecht: “From the start, I have been primarily responsible for ensuring that our company’s entrepreneurs can do business. In other words, ensuring there are always sufficient funds available, that all compliance is taken care of, and that entrepreneurs are aware of the impact of their activities. So, establishing quick and transparent reporting soon also appeared on the radar.

When the sales volumes started to increase, it was a matter of making everything scalable so that the finance department could keep up with the business growth. This was followed by several years during which we carried out a lot of automation and implemented software tools. Now that the tools and processes are in place, I am more involved in ad hoc projects. Although I have also evolved from being an individual contributor to a people manager, my substantive input remains important.”

Do you identify with that, Jacob?

Jacob Quartier: “Sure. CFOs certainly play an essential role during capital rounds. Still, it’s critical to have faith in the product and the founders. CFOs must ensure that the business leaders have a narrative substantiated by the correct figures.

That’s why financial hygiene is so critical right from the beginning. Your fundamentals must be in place: you need accurate bookkeeping, so that you can trust and build on the figures. This will allow you to move towards analytical bookkeeping as quickly as possible to provide reliable data and, hence, insights for management reporting. You can then use these insights and data to challenge the CEO. Because although CEOs tend to have good gut feelings, they need to be challenged with solid data that are made digestible and actionable and then shared with key business partners for them to act upon.”

So, how should Finance evolve as the business grows?

Jacob Quartier: “One thing often overlooked in the transition from a start-up to a scale-up is how critical it is to choose the right scalable technology early on. This is particularly important when your company suddenly no longer has 30 employees but more than 100.”

Tom Libbrecht: “In an ideal situation, you should always be slightly ahead of the business growth curve with your investments and the maturity of your finance team and business processes. This ensures that your finance department is always ready for the next step but doesn’t grow too fast, so the finance overhead costs don’t increase too much. In our job, the challenge is to switch gears just in time. For example, when do you make the switch from HubSpot to Salesforce? When would be the best time to recruit a new employee for that upcoming evolution? It is essential to find the right balance between keeping a long-term perspective in mind and being able to respond very quickly.”

So, how does your finance team develop from start-up to scale-up?

Jacob Quartier: “Quite often, you start with one versatile bookkeeper who enjoys doing different things. The CFO will sometimes take on some controlling tasks to obtain reliable data. Soon, however, you will need a strong corporate controller. Next, you make your bookkeepers more specialized.”

What kinds of people and skills do you need on your finance team?

Tom Libbrecht: “A start-up company’s finance team should have the necessary experience. That’s why I don’t recruit recent graduates. Although I like giving people opportunities, a start-up or scale-up environment is relatively unrewarding for recent graduates. You are expected to add value very quickly and there is little room to really teach the basics within a business environment.

At the same time, people must be very flexible. This is because someone may be perfectly in place as a generalist for a while until suddenly, as the company grows, you have to be a specialist. Not in five years, but right away. As such, I have had to make some painful choices in the composition of my team. Some employees can learn the necessary skills quickly enough to take the next step along with the business. But sometimes you need somebody else to take you to the next level.”

Jacob Quartier: “From that point of view, I like to work with external experts, such as TriFinance’s consultants, to get the necessary knowledge in house quickly. If you hire a permanent employee for every area of expertise, you would risk falling into a hiring and firing culture. Because after a while, what you need is not a project mind but an operational mind. Very often, you need two different people to do this.”

So, how do you develop a sustainable career in finance in such a rapidly evolving environment?

Jacob Quartier: “At any rate, you won’t be working at the same company for life. Many of our employees and we as a company prefer to work together intensively for about three years, after which we can both look back on a successful partnership. We look at loyalty not in terms of duration but as a genuine mutual commitment to make the partnership as successful as possible for both parties. In the interviews with my employees, I ask them what they want to learn at our company for their next career step, in the next growth phase with us, or elsewhere.”

Tom Libbrecht: “Each year at Silverfin counts double. That’s because you do twice as much here. So, we’re looking for ambitious people who want to learn quickly. At the same time, as a company, we’re also committed to giving them those growth opportunities so they can get a lot out of their jobs themselves.”

Jacob Quartier: “Having a very strong growth as a company also brings specific challenges. Half of our current employees have been working here for less than 12 months. That generates a special vibe, oxygen, and energy. But it is also a risk. After all, you will have many employees who don’t yet understand everything. So, you need to set up sound documentation processes to pass on your core knowledge.”

What basic skills should every finance professional in a growing company have?

Tom Libbrecht: “First of all, you need to have a growth mindset. You need to tolerate change and accept that not all days are the same. You should also be prepared to put up with some chaos. And also be willing to change yourself. At the same time, as a finance professional, you must have empathy for the business. Putting yourself in the shoes of sales, for example, if they have different opinions.”

Jacob Quartier: “Pragmatism is key here. That’s because, in the early stages of a business, there are times when you have to make some compromises. This may be to bring in customers or to work towards the perfect situation with a solution that may not yet be ideal. The fact that not everything has to be perfect right away in a start-up or scale-up also gives people a chance to grow with the company. But they will subsequently need to evolve along with it at sufficient speed.”

Tom Libbrecht: “As such, we certainly give our people opportunities to take initiatives and do things that fit their intended growth path. Sometimes, somebody comes up against a wall because they don’t have all the necessary skills yet. In that case, we will look together at what that person still needs to learn so that they can succeed.”

What skills do you need as a CFO or a VP Finance?

Jacob Quartier: “It helps a lot if you have already worked in a larger business. You will already know how to build a finance organization and what the key pillars are in that process. On the one hand, you have to keep your feet on the ground because, in a start-up or scale-up, you will still have to do a lot yourself. On the other hand, you need to have sufficient confidence in your team so that you make enough room to contribute strategically as the CFO and reinvent yourself and your finance department in each of the company’s growth phases.”

Tom Libbrecht: “I realize that, like all employees, I also have an expiry date within Silverfin. Only I don’t know what date that is. Moreover, the date may suddenly come early if the business grows faster than I do. If your expiry date is approaching, you must reinvent yourself with the right growth mindset. This is true for the entire finance team and, therefore, also for me. Building a sustainable career also means parting ways at the right time and taking the next career step.”

So being able to consult with colleagues undoubtedly helps?

Jacob Quartier: “Definitely, you need to create a network that you can fall back on if you’re facing a problem that you can’t solve (quickly enough). Either through your investors, who often have a solid network of financial professionals, or through peer companies. You would be surprised how many people are prepared to help each other if you are willing and brave enough to ask.”