“Need a filter to sift through all that info when making a decision? Listen most to those who give you cash.”

Rob Ripp is the founder and President of Fintelligent, a company’s on-demand financial department. He has over 25 years operating and financial experience serving emerging companies as a C-level executive as well as stints at Fortune 500 companies. For the past 134years Rob has been a CFO to entrepreneurial companies in the IT, defense and healthcare fields. In that role he grown companies by securing customer contracts, raising capital, improving operations and negotiating exits.

Fintelligent was created to provide growing companies a professionally managed financial department at less cost and greater effectiveness. Utilizing the latest cloud technology, proven processes and trained experts, clients improve their financial performance with services that provide them accurate, real-time financial information any time on any device.

MO: How has your experience working at Fortune 500 companies helped shape the vision and direction of Fintelligent?

Rob: It has shaped it greatly. Big companies have the resources to do things right. The best ones are very focused on any activity that improves financial performance – seemingly small changes can yield big returns when multiplied over the scale of a large organization. They provide excellent training and gave me valuable insights during the formative stages of my career.

Smaller companies have scarcer resources, so they have an even greater need to be efficient. The problem is that they don’t have the time to pursue efficiency when they are so busy pursing growth. I thought there was an opportunity to take the best practices from Fortune 500 companies and distill them down to a level appropriate and affordable for a growing company.

MO: What are some of the most common reasons that over 50% of all new businesses fail within the first 5 years? How do you help your clients avoid becoming part of this bleak statistic?

Rob: Businesses fail because they run out of cash. Sometimes they simply don’t have the customer base to be sustainable. Many other times, however, a business fails after achieving some traction simply because management was not effective managing its cash burn rate and runway. A new business is a hypothesis that gets tested over and over: how can it earn sustainable income over time? Until that magic formula is determined, managing cash flow is the most important thing a business owner can do.

People who start companies are generally salespeople and inventors – not accountants. They know they need to pay attention to the financials but too often they just get around to it when they can. What we do is take the pain out of that process by giving clients that visibility into their financials. We use simple tools and cloud technology to deliver consistent, accurate data so managers can anticipate problems and work proactively to solve them. This helps manage cash flow and lengthen the runway until the business is sustainable.

MO: Why do you believe the right technology helps companies become more agile and effective?

Rob: A key directive of a company’s financial function is to communicate financial performance. The financial department’s “product” is information, and technology lends itself very well to collecting, analyzing, and disseminating data (I guess that’s why they call IT “Information Technology”). Accuracy, clarity and speed of information delivery help executives make better decisions and is a competitive advantage.

Cloud technology greatly improves an emerging company’s ability to use information to its advantage. Cloud app providers take care of everything: software development, maintenance, deployment, backup and infrastructure. That allows the company to spend more time focusing on its business. Subscription-based business models make software far more affordable, freeing up capital for sales activities. Many cloud apps are interconnected, providing instant feedback on disparate areas of the organization. We’ve created “mini-ERP” systems using QuickBooks Online as the hub that deliver powerful, scalable enterprise applications at the fraction of the cost of on-premise systems.

MO: When is the right time to start putting together an exit strategy? What are ways to make this process as straightforward and painless as possible?

Rob: The best time to put together an exit strategy is the day the company is formed. While that may seem odd, the fact is that the existence of a for-profit company is to provide an acceptable rate of return for its shareholders. Thus, an exit strategy was formed the moment the incorporation papers were filed.

In the early stages, an exit strategy should not be a formal process. It can be a simple as jotting down some thoughts about who might be interested in buying the business. A competitior? Customer? The public? Knowing this in advance informs management decisions as the business grows.

As clients grow and seek capital or an exit, we advise them to prepare for due diligence even if they don’t have a term sheet. This means getting a due diligence checklist, creating soft copies of everything requested, and storing it in a file system that is easy to access (we use DropBox). It should be refreshed over time, perhaps every quarter or two. What is interesting is that over time, our clients see their progress by what goes into that file system. That informs them on key developments and progress that help them deliver a better pitch to buyers. Buyers are also impressed by companies that have their due diligence act together, which helps fetch a higher valuation.

MO: What’s the biggest risk that you’ve ever taken and how did it turn out?

Rob: My biggest risk was my first startup. I left a good job at a Fortune 500 company and moved across the country for an opportunity that blew up in less than six months. While difficult to go through at the time, I learned a great deal that has helped me build Fintelligent.

MO: Any last words?

Rob: Business owners: need a filter to sift through all that data when making a decision? Listen most to those who give you cash.