MyCFO works with companies to fill the gap that exists between the demand for high quality corporate finance services and the inadequate supply of it. In three years, the firm aims to grow its team size from 130 to 1,000 people, with aspirations of becoming the leading brand in the CFO services segment

1. Building A Brand In The
CFO Services Space

2. Deepak Narayanan and S. Venkat’s entrepreneurial journey commenced in the
year 2007 when a number of companies from international markets were trying
to set up business in India. “The larger ones would go to larger consulting
firms like E&Y and KPMG to help with India entry strategies, but what about
the midmarket companies? These companies are neither too small nor too big
to be able to approach large organisations without being ignored,” points out
Deepak Narayan. Hence, they held on to this niche and setup Wealthtree
Partners, to offer India entry strategy consulting to companies from around
the world.
Both partners were so bored of their finance functions in their previous
organisations that they did not want to get into it. However, as luck might have
it, they stumbled upon the idea of setting up MyCFO, a network of CFOs to
offer corporate finance implementation services to clients. “The recession in
2008 taught us that we were relying too much on companies which are coming
from outside India,” states Narayanan. The gap that the duo identified was
while companies were scaling up, the finance and accounts functions were
light-years behind. And most companies didn’t have a CFO or even if they had
one, they were so caught up in day-to-day cash flow, finance and accounting
operations.
http://mycfo.in

3. “Sometimes you need people who have seen companies scale from a Rs 50
crore company to a Rs. 500 crore company. It will depend on the aspirations
of the person on the ground”
Hence, they got into this space and engaged with a few of these companies.
“One thing led to another and eventually, three years back, we branded this
service as MyCFO,” states Narayanan. MyCFO is now a part of Wealthtree
Partners.
Today, MyCFO is a prominent CFO services firm in India, which provides CFO
and finance effectiveness services to clients across industry verticals and
size. The company’s CFOs do not sign balance sheets, but actively get
involved in all other tasks, which a CFO does and also provide strategic level
inputs. Their typical engagement period is now one year and above. “Three
years back it used to be below six months, then it moved to nine months. Now
it is 12 months and above. Maximum we have worked with a client is four and
a half years,” recalls Narayanan.
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4. MyCFO currently services clients pan India with a team size of 130 people
spread across seven cities including Mumbai, Delhi, Bangalore, Hyderabad,
Pune, Chennai and Coimbatore. The market opportunity for the company’s
business is large, as many listed companies do not have a CFO (almost
2,000 out of 6,000). The company is also working with around 36 PE and VC
funds to aid their portfolio companies. It has a current client base of 90 and
has serviced almost 225 companies in the last three years.
The founders did not raise any external capital when they set up the
company. They brought in Rs. 1 lakh when they started and won their first
client when they started the service. The company is debt free even today.
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5. MyCFO works with companies to plug the wide gap that exists between the
demand for high quality finance services felt by high growth companies and
the inadequate supply of such services at the right levels of ownership,
quality, timelines and more importantly, one that aligns with the company’s
vision. With a number of companies sprouting, companies growing, and
family-managed businesses becoming PE invested, how does one fill the
huge gap? “We are in a space not as a company that body shops but as
people who will take on responsibilities of a CFO and service it through a
team of people on the ground,” says Narayanan. The engagement model is a
tight onsite model which allows companies to see that it is taking a lot more
responsibility and is present when it actually scales up or down.
Hence, the two roles that the company plays are that of a CFO (business
plan, MIS, budgeting and cash flows) and support role (helping CFOs
improve finance effectiveness within the organisation by designing ideal
organisational structure, internal controls, implementation of ERP systems
and more). The company also helps its clients get exit ready, prepare for
initial public offering and strengthen internal processes and practices of
listed companies.
Into The Finer Nuances
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6. What may vary in our model is the number of days in a week that we engage
with the client. For example, if it’s an extremely small company, it may need
just three days in a week. Then, that CFO will be assigned to another project
he or she can work on in parallel. “The challenges with smaller organisations
lie in providing high quality CFO input at the cost they can bite. Therefore, the
shared concept helps,” says Narayanan. For midcap companies, the team is
larger – around three people will be assigned to handle the project.
MyCFO doesn’t position itself as an outsourced service firm because it
doesn’t operate on a cost plus model.
“With this model, there will probably be a 15 to 20 per cent savings for the
client. Moreover, the CFO that they hire might take six months to really hit the
ground and start running. But in our case, since we have seen the situation
and we come in as a team, we will be able to do it much quicker,” says
Narayanan. Secondly, when companies scale up, they will be able to bring the
right team more quickly than when they identify someone and hire them.
MyCFO does not allow its client companies to choose the team or candidates
and its entire business model is built on trust and reputation. “We have given
up clients who insist on looking at the candidates before placing them there.
It does not gel well with the philosophy for which this brand has been built,”
states Narayanan.
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7. “If a company needs to move to the next level and if you have people who have worked
only with start-ups and not organisations that have scaled up, that in itself is a problem,”
states Narayanan. He continues, “Sometimes you need people who have seen companies
scale from a Rs 50 crore company to a Rs. 500 crore company. It will depend on the
aspirations of the person on the ground.”
So how does one deal with a situation like this? One needs a very strong team, a good
project management system and the ability to cross leverage learnings.
Two other challenges the company faces, apart from business challenges in terms of
expansion and foraying into other services are, one, non-standardisation of services and
two, getting the team which has the mindset to be able to deliver. “What I mean by
mindset is, if you typically look at an audit or consulting firm, they have the mindset to
be able to look at multiple clients and change companies within a period of six months.
They have a better sense of what it takes to work with multiple clients but they lack
functional skills. They have always been advisors and they are used to a culture where
they ask companies for information and never get into the details,” states Narayanan.
On the other hand, those from the industry, may not have worked with multiple clients,
but are functionally about 80 per cent better than someone from audit background. “They
are more hands on and our preference is to tilt towards the latter,” says Narayanan. The
company does not recruit freshers as the time taken to orient them is high. It typically
looks for people with an experience ranging from 3 to 30 years. “We recently got the CFO
of BASF and Hiranandani to join us. They are a part of the leadership team,” states
Narayanan.
Meeting The Challenges
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8. “We don’t sponsor any events, but we are called to speak at forums,” says
Narayanan. He is also a part of several mentorship networks such as – NEN,
GenNext Ventures, TIE and more. “Even though start ups are just 15 per cent
of overall company revenues, we still engage with them because it gives us a
satisfaction of giving something back. We don’t work only from a revenue
stand point,” says Narayanan. These apart, the ecosystem is strong now and,
many CFOs know them.
The company may not enter new markets, as it believes that seven cities
constitute 85 per cent of its market in India. It will only get deeper in each of
these cities. It has about 20 clients in each of the cities, other than Mumbai
and aims to get 100 clients in the next three years in each city. “We may also
look at overseas expansions by providing services in markets like Africa and
Middle East where the skill deficit is higher as compared to India,” says he.
Additionally, MyCFO aims to grow its team size from the current 125 to 1,000
in the next three years.
Going Forward
http://mycfo.in

9. “We may even get into products at some point of time,” states
Narayanan. One of them could be the automation of MIS services.
Currently, the company supervises 2000 people across all clients in
finance and accounts space. “Can we provide intervention and
curriculum that will help an entry level person to become a better
finance manager and soon? And, how do we bring such practical
level interventions? There are some possibilities we are looking at
over the next three years,” says Narayanan on a parting note.
Going Forward
http://mycfo.in

10. Official Website
http://mycfo.in/
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