How To Manage A Speedy Funding Round

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The key, says Tipalti CFO Sarah Dickens Spoja: ‘plan ahead and build relationships.’
Sarah Dickens Spoja, CFO, Tipalti

Sarah Dickens Spoja, CFO of Tipalti, a San Mateo, California-based payables automation platform provider, took the lead on Tipalti’s most recent funding round process—and it was fast, going from first conversations to term sheet in just three weeks.

Dickens Spoja spoke to StrategicCFO360 about how Tipalti pulled that off, the power of today’s automation tools and why she values her network of CFO contacts.

What is your advice to other companies hoping to attract more capital, before people have all gotten back to taking face-to-face meetings again?

Fundraising is not a quick job—it takes time, thought, determination and dedication. It requires patience to do it right, whether face-to-face or conducted over Zoom. The entire process of fundraising and meeting with investors, as well as other influencers in the space, is an essential part of the job. Even today, with capital in the bank, I still do multiple calls a week. Naturally, investors would like to get to know the company and the people over a more extended period. That work—establishing those relationships when the company is not actively in the market for primary capital—allows us to take quicker advantage of an opportunity on our terms. In other words, the work of today pays dividends tomorrow.

For Tipalti, we were not initially considering a significant equity raise in 2020. But as the spring and summer came, we saw an opportunistic window with some strong and key investors who we were excited to partner with. That’s another thing to keep in mind when considering a future raise. Businesses that plan ahead and build relationships as they go will be best positioned to act when an opportunity arises.

Further to that point, upfront preparation is essential to running a smooth fundraising process. CFOs need to get in the mindset of the investor to try and predict what the key questions will be and prepare materials accordingly.

Fundraising also requires the support of additional personnel and resources that can be taken off other jobs and pulled in at a moment’s notice. At one point, we turned around an extensive accounting due diligence in just 48 hours from kick-off. That wouldn’t have been possible if the team hadn’t been prepared with backup documentation and the ability to clearly respond, in real time, to the new auditors’ questions.

What do you think was unique about raising a funding round, particularly from a CFO perspective, during the pandemic compared to the pre-pandemic days?

The pandemic has taught businesses that they don’t need to be in the same room with investors to close a deal, and investors have learned that as well. I believe that more fundraising will be done this way after the pandemic has subsided and companies are back in offices. There will still be face-to-face meetings as processes narrow down. But I think the efficiencies experienced through the last year of fundraising, which was primarily remote, will encourage and inspire businesses and VCs to connect virtually on a more frequent basis.

That said, the remote environment does make it harder to get to know people on a deeper level. CFOs and other executives should remember that their investors will be with them for a long time, so it’s important to know who is on the other end of that check. For us, that means making as many phone and video calls as possible and reaching out to others who have worked with them previously whenever applicable. I know for a fact that, in our most recent round, our VCs did the same to evaluate our executive team further.

Therefore, those references and the network you can build to form a good source for references are so vital for CFOs. I am constantly building my CFO network for this very reason and find the community and peer advice to be invaluable.

How does increased automation impact the role of CFOs?

Finance leaders can use automation to unlock three key elements for success, starting with the team. In order to hire and retain the best talent for your finance and accounting team, you must be able to offer outstanding growth opportunities to every employee. Automation can assist in this regard by removing the manual reconciliation process, empowering staff to focus on more meaningful tasks that deliver value to the company and will get them noticed.

Automation can also help organizations unlock fresh and highly actionable insights by automatically collecting data. The resulting information, as well as the visualizations created from that data, helps to drive faster insights both in the finance organization and across the company.

Last but not least, automating and digitizing key processes can unlock the power of collaboration across the organization. At a time when most finance organizations are remote or at a minimum working in a hybrid model, the need for these tools is even greater. It creates more transparency and a stronger controls environment, which is also important—especially for the finance team.

Thus, automation provides CFOs with multiple benefits that, depending on the technology, allow for greater visibility and accuracy into processes, operations and transactions. Automation can also lead to better decision-making and execution, allowing CFOs to up-level their team. I’d rather hire someone who’s going to be a great analyst and problem-solver than someone who is content with transactional grind work.

Last but not least, automation is absolutely foundational to any organization’s effort to scale. If you have a highly productive finance team, one that is adaptable and can turn around an audit quickly and with confidence, you will be a more nimble organization.

Why do you think choosing the right automation technology is a top priority for financial leaders that must reshape operations?

Finance operations is a big concept in the enterprise, but it’s only now starting to penetrate into the mid-market. What’s unique about automation today is that solutions exist. Now, as you grow, you have the ability to choose between doing things the old, manual way, or employ sophisticated software that’s easy to use. In other words, software that doesn’t require a large development team on the backend and can generally operate out of the box.

Having that kind of automation available increases agility and scale. You can then launch new business initiatives and hire valuable team members at a greater frequency. You can acquire a company, as we did with And, ideally, a lot of the drudgery of finance and accounting gets removed, so you can focus on the strategic results that will matter and have a lasting impact that’s potent and positive.

In the mid-market, it is very important to choose the right solution the first time—especially one that can scale with your business. If you know the business is growing and will have customers, suppliers or entities internationally in the next one to three years, it would be a mistake to choose a finance tool that cannot handle global or multiple entities.

It is important that finance executives are looking ahead to ensure their technology decisions are designed with future-proofing in mind. They need to ensure that they are choosing the right technology for today as well as for any future needs that arise at a later date.

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