Joining a budding startup in a transformative industry is exciting, and it is one reason CFOs gravitate to such companies after long careers in larger organizations. The chance to build a finance organization from the ground up can also be a powerful lure.
Todd Pepmeier, an automotive industry veteran, is one finance chief who leaped during the current business cycle. In March 2023, Pepmeier joined Arrive AI, an Indianapolis-based company that automates the last-mile delivery of packages for consumers and businesses. It calls part of its offering “mailbox-as-a-service.”
Pepmeier shed his milk teeth at Ford Motor Company and then spent 15 years in finance at Rolls-Royce, but now he has the chance to steer a crowdfunded startup through the trials of becoming a business operating at scale. As CFO, Pepmeier says he is “transforming [the] business’s administrative engine” to fit its plans for rapid growth “without adding unnecessary operating costs.”
In an interview with our Katie Kuehner-Hebert, Pepmeier elaborated on his plans at Arrive AI and the career lessons he’s learned from his long tenure in finance.
What kind of foundation are you building in finance as Arrive AI’s first CFO?
We’re selecting service providers that can scale with us. We are implementing payroll, accounting, bill payment and risk management now because we aim to grow rapidly without adding unnecessary operating costs.
We also continue to develop relationships with new customers and partners for our services. As CFO, I advise the team on pricing strategies, deal terms and conditions and deal risk identification.
In addition, our financial models have evolved to allow us to project our business results into the future based on current assumptions. It’s my job to ensure we are living up to that plan and growing the business profitably.
Finally, as the company looks to go public on Nasdaq later this year, I have been working with advisers and investors to ensure the company has the capital to fund continued growth. We already have nearly 5,000 shareholders in Arrive AI, and we communicate regularly with them. Our shareholders have invested in our team and vision, and I want to ensure we deliver on that daily.
The strength of our first-mover patent portfolio has us considering several strategic acquisitions and partnerships to supercharge our growth. As CFO, I take these opportunities seriously and make sure we do proper due diligence on each.
What are some finance challenges as Arrive AI matures, particularly regarding managing risks?
Finance leaders in all industries have experienced greater scrutiny over the past couple of decades. We have all had to renew our emphasis on internal controls.
Arrive AI has chosen to always conduct itself as a public company, including having its audits performed to the Public Company Accounting Oversight Board standards. These audits are more expensive and difficult but give the management team—and investors—confidence that we are following the rules and standards of a public company.
I would say that security has also been a challenge recently. Technology has advanced, increasing the risk of fraud and unauthorized access to our information. We have all seen the apparent phishing emails asking for money, but now the criminals are more sophisticated. We have seen very elaborate attempts to access funds from our accounts. As a team, we must take this very seriously. We regularly talk to all employees about the threats and have stepped up our defenses.
What advice would you have liked to have been given when you first became a CFO?
Number one, don’t ever get too comfortable. Expect change, no matter how well things are going. Try to embrace it. Change can be an opportunity to add new things to your CFO toolkit. There is a lot to learn throughout an entire career. Personally, I wish I had sought change earlier. … A CFO with diverse experience in multiple industries and companies can be a tremendously valuable leader.
Another piece of advice I always give finance professionals is to be curious outside of the silo that is finance and accounting. Get a deep understanding of technical or sales aspects of the business—that helps a CFO immensely. Knowing how things work and what challenges other functions face makes for better, more informed finance decisions. Plus, sharing financial information with the broader team is easier if you speak their language.
How important is it for a finance chief to stop, reflect and reset during the workday?
I have made that a priority from early in my career. For several years, I would take a small group of colleagues with me almost every day for a short walk and a quick meal. I always looked forward to that time in the day and even tried to block out my calendar to protect the time.
Professional athletes need halftime to rest, adjust and prepare for the rest of the game. Those short breaks gave us all a few minutes to escape the “fire” of the day. We got to know each other as humans. It helped me decompress, reset and prepare for the day’s second half. And the value of those relationships transcends the workplace.
Even today, in a different setting, I make a point to get out of the office during the workday. The time away reminds me that there is so much more to life than the specific workplace challenges. It is easy to get overwhelmed with a mile-long list of tasks under time pressure. Usually, a clear head and refreshed attitude lead to better productivity.
I’ve also taken the need to protect my schedule outside of the office very seriously. I am more effective with everyone when I have a good balance of work and personal time.
