August 28, 2025 • 36 mins
Scaling doesn’t kill companies, confusion does. And most founders are flying blind.
In this episode, Jack Weinstein, fractional CFO and former Fox exec, shares what he’s learned advising 50+ entrepreneurs, from zero to $25M in revenue:
• The hiring trap that derails scaling teams
• What financial firepower really means (and why most businesses don’t have it)
• The difference between a controller and a real CFO
• Why growth without clarity = chaos
Jack also shares how he turned a run-down chicken plant into a pharma facility doing 8-figures a year and what he’d never do again.
💼 Connect with Jack at pacfins.com
This episode is brought to you by Bill.com
- Ready to take your finances to the next level? See how BILL Spend & Expense can power up your business—and get that free grill—at bill.com/cfochronicles
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome back to another episode of CFO
Chronicles the secrets behindsuccess, the show where we dive
into the stories and strategiesof the financial minds who are
driving businesses forward.
I'm your host, james Donovan,and today's guest is someone who
spent his career helpingentrepreneurs not just balance
the books but realize their fullpotential.
Jack Weinstein is the CFO atPacVins and he supported over 50
(00:22):
successful entrepreneursthroughout his journey at
PacVins, and he's supported over50 successful entrepreneurs
throughout his journey.
What makes Jack stand out isn'tjust his depths of financial
knowledge.
It's his belief that growth canbe exponential, that low cost
doesn't always mean costeffective and that success
demands a clear plan.
He's here today to unpack whatfinancial firepower really means
, how founders can avoid thecommon traps that stalls growth,
(00:45):
and why careful financialmanagement isn't just an
obligation, it's a weapon.
So let's get into it.
Thank you so much, james.
It's a pleasure to be here.
Jack, thank you so much forbeing here.
I'm really looking forward tothis one.
I know you got a ton ofknowledge.
But first, for the listenerswho aren't watching this
recording, we need to talk abouthow you always have amazing
(01:08):
hawaiian shirts on living inhawaii.
You never disappoint showing up.
See the palm trees.
In the background you have thehawaiian shirts let's talk a
little bit about.
You must have a massivewardrobe of hawaiian.
Speaker 2 (01:23):
I do at this point.
Actually, almost all of myclothing is Hawaiian shirts.
I used to wear very traditionalsuits and ties every day, which
was a lot less fun in myopinion, but I moved out here to
Hawaii in 2023.
I moved from San Francisco andI've lived all over the country
previously, but it's a pleasureto be here.
I originally came out to keep acloser eye on my parents, who
(01:45):
are in their 80s.
They're slowing down a littlebit, but what I found when I got
here is that there are not alot of traditional, extremely
competent accounting firms orfinancial planning resources
available for businesses inHawaii.
Also, ever since the pandemicever since COVID I've done
almost all of my work remote.
I work with clients all acrossthe country because you never
(02:05):
know where entrepreneurs mightchoose to be, and accounting and
finance is a function I'vefound that can often be done
very effectively from a remotelocation.
It doesn't necessarily requirea person sitting in the office
typing out figures on aspreadsheet.
A lot of that work can be donecapably and at a more cost
effective rate elsewhere in thecountry I love it and I love
(02:28):
that.
Speaker 1 (02:29):
You just you bring so much personality and you're
like you said.
You're not.
You're not wearing a suitthat's uncomfortable.
You're, you're yourself.
You're really taking in the.
You know the culture of Hawaii,and you got the shirts to match
.
Every time we jump on Zoom.
I look forward to seeing whatnew shirt is Jack going to have
on.
So this is great.
So, Jack, let's start with yourpath.
(02:49):
How did you land in the CFOseat at PacVins and what keeps
you, or what's kept you, in thegame all these years?
Speaker 2 (02:58):
So what I want to mention is I'm actually doing my
dream job right now, whichmight be the first time you've
heard this from an accountant.
It's not traditionally a dreampath, but I'll tell you.
I started my career in theFortune 500 world.
I worked for 20th Century Foxfor many years in corporate
finance, and, although there isa lot of stability and certainly
a lot to learn working for aFortune 500 company, everything
(03:20):
moves so slowly.
Everyone is extremely siloed.
They have their own littlespecialties, their own little
areas, and it takes a very longtime to make any sort of a
decision that actually impactsthe overall business.
Since leaving the company, I'vehad the opportunity to work with
a variety of entrepreneurs,ranging from bioscience
companies and pharmaceuticaldevelopers to crypto mining
(03:41):
facilities, to agriculturalfacilities, large food
processors, you name it.
It's in quite a few familyoffices and law firms as well,
and what I've benefited from,what I've learned from working
with this wide variety ofclients, is that it's just so
much more lively and so mucheasier to get decisions made
(04:01):
when I'm working directly withentrepreneurs that are building
their own business, that areliving their own dream, and it's
inspiring to get up and talk tothose people every day.
Their challenges may bepressing.
They may be dealing with a lotof internal issues that make it
a little bit complicated tomanage the firm.
Speaker 1 (04:30):
But at the same time, that's a path they chose for
themselves.
These are some of the mostambitious people in the country
that have a dream and they puteverything else beside them
behind them in order to pursuethat dream.
That's awesome.
You mentioned you've supporteda handful of entrepreneurs.
It's so cool what you're doingand how you can get involved and
help them see their dream cometo fruition and come to reality.
What drives you to keep doingthe work that you do?
Let me give you an example ofone of the first entrepreneurs I
(04:52):
supported.
Speaker 2 (04:54):
This, in fact, was the first opportunity I took on
as a chief financial officer in2018.
At the time, I was working foran investment bank in California
called GT Securities, which isa role that I took on after I
left 20th Century Blocks and webrought on a client that had a
vision for developing painrelieving pharmaceutical
products specifically for thehospice population.
(05:14):
So the founder what reallyinspired me about this gentleman
?
The founder was the chiefoperating officer of a company
called Heart Hospice, which wasone of the largest privately
held hospice organizations inthe United States.
His partner was a medicaldoctor, a researcher from
Columbia University, who wasresponsible for developing these
products, and they had a visionto build out this
(05:37):
pharmaceutical manufacturingfacility and produce these
proprietary pain relievingproducts specifically for the
hospice population.
It struck a very personal chordfor me.
I have a younger brother thathas a serious autoimmune disease
and he actually has benefitedfrom related products similar to
the ones that they were goingto produce.
So I was living in Los Angelesat the time, working the
investment banker lifestyle 80hours a week, suit and tie every
(06:00):
day and I packed everything up,I quit my job and I moved out
to rural Oklahoma in order topartner with these two guys.
I was the second employee.
They had one executiveassistant that was supporting
them at the time.
Zero office space, pretty muchzero resources.
But we really believed in whatwe were doing and we pulled
(06:20):
together our efforts.
We pulled together our contactsand over the course of the next
two years we raised about $25million in equity capital.
And we put it to work.
We bought an old Tyson Foodschicken processing plant in
eastern Oklahoma, a big, aging40-acre industrial complex
that's dominated by a massive65,000-square-foot cast-in-place
concrete bunker.
(06:41):
Basically that Tyson had movedout of 10 years earlier.
I mean by the time we moved inwe got an extra deal on the
place.
It had cost Tyson around $30million to build.
We acquired the property for $2million and the reason why is
because the windows were brokenout, there were wild animals
living in the property, therewere weeds growing up through
the parking lot.
It was in rough shape.
The town it was in, stilwell,only had 4,000 residents and
(07:05):
unemployment was about 40%.
It was in a tough position.
So we came in.
We acquired the property, weredeveloped it over the course
of about two and a half yearsand turned it into believe it or
not a modern pharmaceuticalmanufacturing facility in rural
Oklahoma, and by the time I leftthe company and moved back to
California, we were at 250employees and we'd gone from
(07:28):
nothing to eight figures inannual revenue.
So I had a chance to support anentrepreneur two entrepreneurs
through the entire startupjourney, from square one into a
successful company, and it wassuch a joy and revelation.
Speaker 1 (07:39):
Sure, just there would be so many lessons and
acquired from seeing you know ateam of three or four.
So you mentioned you were thesecond employee being hired to
eight figures a year in annualrevenue and just like I'm sure
(08:06):
it wasn't all up and to theright a little bit of maybe some
of the hardest times thateither you experienced and then
you over, you overcame, or thatthe business experience that you
were able to overcome as agroup what we did when we first
started was we leased theproperty from the existing
owners with the option topurchase it in the future.
Speaker 2 (08:19):
They were quite happy to give us that option because
they didn't anticipate we wereactually went by the building
and do anything with it.
But we set up our initialoffice there and it was a little
eerie at first.
I mean, we were using maybe athousand square feet out of this
65,000 square foot structure.
So the rest of it we kept thelights off, we kept the heating
and the cooling off and the restof the building and it was kind
(08:42):
of like a large ghost facilitythat we used a small corner of
initially.
And starting a company is afearful process.
I mean, each one of us wereconcerned.
If this doesn't work out, arewe going to be able to make a
living?
Will we be able to pay ourbills?
We all, I think, had sacrificedsomething in order to make that
happen, and that's theentrepreneurship journey right
(09:03):
there.
It does require quite a leap offaith to move from a secure
employment opportunity intostarting a business or
participating in a startupbusiness, but the kind of people
that are willing to make thatleap historically we've seen the
people that do that are theones that are willing to enable
to build significant companiesand institutions throughout our
country and, at the end of theday, make a measurable
(09:26):
difference even in the businesshistory of the United States.
So it's I just admire people somuch we're willing to either
start a business or participatestartup.
Speaker 1 (09:34):
That's so cool.
Congrats on going through thatwhole experience and helping
them, you know, be an integralpart of that reaching, you know,
eight figures and growing fromless than you can count on a
hand to 250 people.
Speaker 2 (09:51):
That's so cool.
Well, James, one of thequestions you asked me was about
some of the challenges involved, and I'll be the first one to
tell you I did a lot of thingswrong with that process as well.
So if I were going through ittoday, I would have reached out
strategically to venture capitalgroups in order to find the
appropriate financing for us topursue the venture.
We raised $25 million, but itwas from 120 different
individual accredited investors,all of whom had my personal
(10:13):
cell phone number, who wouldcall me at all hours of the day
and night for an update, andthat alone quickly turned into a
full-time job, in addition totrying to manage the cash flow
and keep on top of theaccounting and the tax filing
and the payroll and everythingelse that a business needs in
order to operate.
And as we went forward throughthe process, we were often
stumbling a little bit.
Anyone that's involved in astartup is typically wearing
(10:35):
multiple hats.
I mean, at one point I wasdoing a lot of interviews for
people that were going to be onthe production line.
They didn't know the firstthing about manufacturing
pharmaceuticals.
All I could really judge waswhether a person's personality
seemed like they would be a goodfit for the team, whether they
were enthusiastic about themission that we were pursuing.
But we were growing so quicklyand we had such a limited
(10:56):
executive team available toconduct these interviews, I
ended up doing quite a few ofthem myself, and it was really
an eye-opening experience that'syeah.
Speaker 1 (11:06):
That's just so cool to hear your perspective on that
, and all the lessons would havecome across.
I can't imagine you know givingout your personal number to
that many people, having thatmany people call that.
I'm surprised you didn't just,you know, get a new phone or
hire someone to look after yourphone for you.
Um Jack, what's one thing thatmost people, even founders,
(11:28):
don't understand about what aCFO really does?
Speaker 2 (11:33):
I think a lot of founders have the assumption
that, hey, I'm in charge of thebusiness I do in an early stage.
Business is be responsible forapproving large expenditures,
approving hiring plans,approving anything that needs a
(11:56):
final decision made on it, butnot necessarily preparing the
data that goes into supportingthose decisions.
A lot of the entrepreneurs andfounders that I've worked with
they have consistently stumbledbecause, even if they come from
a financial background, it takessuch a tremendous amount of
time to both properly preparethe accounting records and then
also to offer.
The second step here iscritical to offer valuable
(12:19):
insight and analysis into whatthe records actually mean for
the business.
It's one thing to say, hey,we're making $10,000 a month,
we're losing $10,000 a month.
The most critical next step iswhat does that mean for the
business and what are ouroptions to do something about it
?
If we have excess capital, it'snot that useful for a CEO to
hear, hey, we've got $10,000extra a month coming in.
(12:42):
Having specific spending planson how that money could be used
to further the business growthand achieve the objectives of
the company as a whole, that'sreally indispensable.
Conversely, if the company islosing money, chief executives
need to know how much time theyhave in order to make changes in
the business and what kind offeasible changes could be made
in order to get the business outof a bad situation, whether
(13:02):
it's reducing overhead and,potentially, headcount in order
to shave off expense, orpursuing a loan, or bringing on
outside investors in order toshave off expense or pursuing a
loan, or bringing on outsideinvestors in order to provide
additional capital and get to aplace where the business is once
again healthy.
The CEO and entrepreneur, asmuch as possible, needs to be in
that final decision making, andany time that they're spending
digging through data, trying tocompile information in order to
(13:25):
get enough information toactually make the decision, is
time that's wasted and not theirbest and highest use of their
abilities.
Speaker 1 (13:33):
Yeah, it's so true.
I think it always comes down tothe delegation piece, right,
and how much are you able noteven willing how much you're
able to let go of and reallocateyour time in a higher revenue
generating activity?
If you're not the expert in thenumbers, why are you hanging
out there Like let someone elsewho is the expert do that to get
(13:54):
the highest value you spoke alittle bit about.
If firms are losing money, ifthey need to shave off, they
need to reduce headcount.
How do you navigate thoseconversations with founders
where maybe the founder believesno, if we lose anybody like the
workload, everyone's going tobe super stressed, everyone's
going to be taking on too muchstuff.
(14:15):
But you're telling them look,the numbers don't make sense,
you need to reduce your payroll.
How do you navigate thosedifficult conversations?
Speaker 2 (14:24):
It's a tough conversation sometimes and I'll
give you a specific example.
I currently work as fractionalCFO for a client that does about
$8 to $9 million a year.
They're a respectable smallbusiness and they're in a
position right now that theylikely have to reduce some
headcount in order to remainsolid and in a good financial
position is they've had somepeople with them from day one
(14:47):
who very much believed in thebusiness, who might potentially
be on the chopping block, whoactually voluntarily reduced
their salary because theybelieved so much in the business
for the first couple of months.
In some cases, the first twoyears, and cutting those people
who were such believers in theteam can be a real challenge.
At the end of the day, it'simportant to do whatever's
(15:07):
necessary to keep the businesshealthy, but it doesn't
necessarily mean that's theoption that chief executives
should take.
Sometimes there are no bettersolutions.
A business has to be profitableultimately in order to continue
functioning.
Otherwise it can't reallyremain a business.
It's going to have to be anon-profit.
But if there is a clear pathwayto get to profitability by
(15:27):
spending more money, often it isbetter to pursue a loan or it
is better to bring on outsideinvestment.
And that is a reallysignificant distinction, too,
between a controller and a CFO.
This is something that a lot ofentrepreneurs, I think, do not
fully appreciate, and anaccountant or a controller is
primarily backwards looking.
(15:48):
They're focused on maintainingappropriate accounting records
for the business running thepayroll, making sure the tax
filings are done correctly.
It's an indispensable businessfunction but at the end of the
day a controller is typicallygoing to give a chief executive
raw information on the business.
Here's your P&L statement.
Here's your balance sheet.
Now you figure out what it isthat you need to do.
A chief executive officer cantypically go the extra step and
(16:10):
actually suggest specificpathways that business can take
to deploy additional capital tosave money or cut spending and
then, most critically, toactually go out execute on those
plans for the chief executive.
So the chief executive may say,ok, I want to take a loan out
in order to support the growthof the business or to avoid
laying off debt.
Well, somebody's got to pick upthe phone and either find an
(16:33):
appropriate broker or find anappropriate lender and negotiate
terms with them that fitbusinesses' needs.
Sure, typically a CEO can dothat, but it is a little bit
specialized and it takes a lotof time.
At the end of the day, thechief executive officer is
someone that they can task with.
Okay, we agree, we need $5million in additional capital by
(16:57):
this date.
Go, figure out a way to makethat happen.
And that often is a big part ofthe role that I feel these
entrepreneurs.
Speaker 1 (17:01):
There's so much value there.
Jack, Thank you so much.
You're very passionate abouthelping businesses obtain what
you call financial firepower.
What does that look like inpractice?
Speaker 2 (17:15):
It's a good question, and the biggest mistake that I
see when companies are goingafter this financial firepower
is they are thinking about theirneeds, which is reasonable.
Hey, I need $5 million for mybusiness.
I know exactly what I'm goingto do with this $5 million.
Let me just convince the lenderthat I'm going to do with this
$5 million.
Let me just convince the lenderthat I'm a really cool business
and they're going to give methe money.
Lenders, financiers, investors,anybody that's providing
(17:38):
capital they're human beings andthey have their own goals that
they need to satisfy, sounderstanding what those goals
are is particularly critical inorder to come to a successful
conclusion for the entrepreneur,and I'll give you an example of
this.
A big part of my career I'vespent supporting either private
equity groups or venture capitalgroups.
Speaker 1 (17:56):
I was the CFO for Kevin.
Speaker 2 (17:57):
Harrington's venture capital group down in Boston.
He was one of the originalShark Tank investors.
I served as interim CFO forEnthos Capital, which is a
private equity group in SantaMonica that manages a $3.5
billion fund.
They currently serve as venturecapital a CFO for Impax Capital
in Texas, which manages anapproximately $2 billion fund as
(18:18):
well, and so what I've learnedis I've spent a lot of time
sitting on the other side of thetable evaluating opportunities
to place capital, and all ofthese groups have their own
consideration.
If it's a family office, theywant to typically know that
there is a clear pathway for anexit on the investment, whether
it's refinancing a property orwhether it's raising additional
(18:39):
capital or simply receivingsufficient distributions in
order to make the return ontheir investment make sense.
If it's a VC group or it's aprivate equity group, they've
got their own people they haveto be responsible to, called
limited partners.
These are the groups that areputting in capital.
If it's a private equity groupand maybe a large limited
partner we worked, for example,at one point will be endowment
(19:00):
at Yale University.
Some of them are small limitedpartners that are just going to
put in one hundred, two hundredthousand dollars.
But they're all people that theVCs and the private equity
groups have to answer to andthey want to look good for.
And what that means is not onlygetting the best possible
return on capital, but alsoshowing that there's positive
unrealized gain sometimes thatthey can report to these
(19:22):
financial groups.
And an unrealized gain, ofcourse, is just an increase in
the value of an investment thathas not yet been realized.
So if I buy a stock, the valueof it goes up and I don't yet
sell the stock, I have anunrealized gain, an increase in
the value of my asset.
So what these guys want to knowif it's private equity group or
a venture capital group thatyou, as an entrepreneur, are
(19:42):
going to for funding they wantto know that not only you have a
clear pathway to repay or toexit them from the investment,
but also that you have a clearpathway to continue growing your
company, even if you need moremoney.
What these groups wouldtypically rather hear is not hey
, I want to get $5 million fromyou and then I'll pay you back
$5 million.
They want to hear I'm going toget $5 million from you and use
(20:04):
it to double the size of mycompany and then I want another
$10 million from you so I can doit again, and that goes over
very well.
That's something that they canreport back to their limited
partners.
We made a great investment, youhad a terrific increase in your
unrealized gain, and now we'remaking a second investment in
the same company because ourjudgment was so good and now we
get to continue participatingwith this extraordinary
(20:25):
entrepreneur.
So what I'm trying to say is asan entrepreneur, it's so
important to put yourself in theshoes of the capital provider
and think about what it isthat's important to them, not
just what's important to you asan entrepreneur and what you're
going to do with the money.
Speaker 1 (20:40):
It's interesting.
That's a cool perspective shift, though, to look at it through
that lens.
Jack, you spoke a little bitearlier about potentially taking
on loans.
What would you say to thebusiness owner who, I don't know
, maybe is a little bituncomfortable taking a loan?
Or or you're like hey, look,data shows and maybe let's put
(21:02):
it into the marketing, themarketing perspective.
So you look at someone and youcan say, hey, right now you're
getting a you know five X, nineX return on your ad spent.
Whatever that may be, there'sonly so much cashflow that's
coming in and out so you're notable to increase your ad spend a
ton, despite seeing a reallygood return.
(21:25):
Maybe you're you're bleedingelsewhere, whatever it is, if
someone's uncomfortable goingout and taking a loan.
But you know, look, if youpoured a lot of gas onto that
fire, you have data showing howmuch of a return you'll get.
How do you coach some of yourclients through that
decision-making process, and isit the right decision to go get
a loan or is it better to try toplug where some of the gaps are
(21:48):
elsewhere in the business?
Speaker 2 (21:51):
It's a fair question too, because if the business is
persistently losing money,getting a loan just buys more
time.
It doesn't necessarily solvethe problem.
So a loan does have to becoupled with a fair plan to
either increase revenue ordecrease spending, or both in
order to get the business into astabilized position.
A loan should have a very clearobjective associated with it.
For an entrepreneur, I needthis loan to get the business
into a stabilized position.
A loan should have a very clearobjective associated with it.
For an entrepreneur, I needthis loan to get the business to
(22:13):
this position, and then we'llbe comfortable from there on out
.
An entrepreneur also needs to bethoughtful about what kind of
loan they're taking, becausethere's a lot of different
lenders out there, ranging frommerchant capital, advance or MCA
loans, which tend to beextraordinarily expensive.
They're often above 30% annualinterest because they build in
all kinds of fees and penaltiesthat make a loan quite expensive
(22:36):
.
But they're unsecured.
They don't typically requireany sort of collateral.
On the other hand, the loansthat have the least expensive
cost of capital are generallyloans that are secured by real
estate or other hard assets.
If there are assets like that totake advantage of, that's what
I always encourage my clients toexplore, and one thing to keep
(22:56):
in mind is that it's not alwaysnecessary to borrow against the
current value of these assets ifwe can justify an increase in
the value of the assets.
And I'll give an example in theform of the pharmaceutical
facility we worked on inOklahoma.
We bought this facility for $2million and two years later I
was able to secure a $10 millionloan on this facility, which
(23:19):
begs the question what kind oflender is loaning $10 million on
a $2 million facility?
That's not very much capital ascollateral.
What happened was we showedthat we had a clear plan to
build out the facility andultimately improve the valuation
of the property from $2 millionat that point to $20 million.
Once our improvements werecomplete, we got an objective,
(23:39):
independent appraiser to come inand provide an attestation that
that was indeed the case, andthe lender was willing to loan
us money on that basis ofimproving the property.
And ultimately they did see asignificant increase in the
value of the collateral and wewere able to repay the loan.
So the lender was happy and thebusiness was happy.
There's a lot of thought thatgoes into successfully closing
(24:02):
on a loan and especially makingsure it's the right loan for the
business, but that's a big partof what I help provide
entrepreneurs through.
Speaker 1 (24:09):
That's cool, so it's not.
I need a loan to run to thebank and ask for whatever amount
like.
Really think about what theobjective is.
Otherwise you're kind of justbuying time and you're digging a
hole.
Speaker 2 (24:22):
It takes some thought , believe it or not.
80% of business loans in ourcountry come from private loans.
They don't come from creditunions.
They don't come from banks.
Only 20% of loans come fromcredit unions or institutional
lenders like banks.
So there's a lot of privateoptions out there, and when it
comes to private world, almosteverything is negotiable.
You just have to find the rightpartner that's able to
(24:42):
negotiate effectively on behalfof the business.
Speaker 1 (24:45):
That's cool.
Remind me after Jack, I gotsomeone I need to introduce you
to in the loan space.
I think you two could can workreally well with one another.
What's one habit you've pickedup from working with
entrepreneurs that's influencedhow you think about business?
Speaker 2 (25:03):
There's a lot of good habits that I picked up from
entrepreneurs.
One, though, that really standsout to me is it's totally fine
to disagree, whether at thesenior leadership team, whether
it's the CFO that disagrees withthe CEO or the chief operating
officer has a different opinionthan the CEO.
Totally fine to havedisagreements, but they should
(25:23):
be handled in private.
It's so important to projectconfidence, both to the team and
to customers, and to show thatwe believe the business is in a
good position and things areonly going to get better.
Even if the business is facingsome significant jeopardy,
that's ultimately theresponsibility of the C-suite to
solve.
So any disagreements, anyinfighting, really should occur
(25:46):
privately, in individualconversations.
It's so important to projectconfidence and, in my opinion, a
positive attitude to everyoneelse that works for the business
, because everyone else that'son the team, they're showing up,
they're doing their best everyday and they're not responsible
ultimately for the higher-levelstrategic or financial
considerations that guide theentire business.
(26:08):
The c-suite is responsible forthose things and, um, any, any
disagreement about those itemsreally needs to be handled
behind closed doors that's good.
Speaker 1 (26:19):
I I really like that.
I got a couple rapid firequestions for you here and then,
um, as, as we get to the end,then then we'll wrap this up
your favorite business orfinance quote that you live by.
Speaker 2 (26:33):
Wow.
Speaker 1 (26:35):
There's so many good ones out there.
I know I'm going to put you onthe spot here a bit.
Speaker 2 (26:42):
I should think of something more profound, but I
mean one of the quotes.
This is going to sound like alittle bit of a dorky accounting
quote, but it's an old schoolone, and a penny saved is a
penny earned from.
Benjamin Franklin is somethingthat's always stuck with me,
because I do see a lot ofentrepreneurs that spend money
unnecessarily on things thatthey think would show well for
(27:04):
the company but don't alwayshave a positive impact on the
bottom line.
And I'll give you an example.
I worked with an entrepreneurrecently that was successfully
raised about heat figures forhis business and the very first
thing he went out did was buy aprivate jet for the business and
this is a business that had onelocation and he lived within a
few miles of the one location,so there was no need really to
(27:26):
travel to other states.
But he felt like it wasimportant for the business to
have a private jet in order toshow a veneer of success to
outside partners.
Ultimately, it proved to be ahuge headache.
Private jets are tremendouslyexpensive.
I learned firsthand that yourequire a separate insurance
policy on the engine compared tothe body of the aircraft.
You've got big pilots, there'shangar fees, there's all kinds
of additional insurance costs.
(27:46):
So it's a prohibitivelyexpensive investment unless the
business really needs one.
So don't spend money unless youhave to spend the money, unless
it actually goes to somepurpose that supports the growth
of the business and theentrepreneur's vision.
Speaker 1 (28:03):
That's a great example.
Thank you for sharing that.
Your go-to book or podcast thatshaped how you lead.
Speaker 2 (28:14):
I'll cite another old example.
I guess I have a lot of oldones, but in high school one of
the books I was tasked to readwas the Richest man in Babylon,
which is really a book that'smore about personal finance than
about business leadership, butI found it applies very well to
business leadership and thecentral thesis of the book is no
(28:35):
matter who you are, your laboris worth a certain amount, but
also your capital is worth acertain amount.
It's important to make yourcapital work for you.
A lot of the clients that Iwork with that do prove to be
very successful.
I'll cite one in particular alaw firm that's doing very well.
They end up producing a lotmore cash than they spend every
month, which is great.
But when I came on board withthis client, they were just
(28:57):
keeping all that cash in achecking account and it built up
to hundreds of thousands ofdollars that they were basically
earning absolutely nothing onthat they were basically earning
absolutely nothing on.
By simply moving that moneyfrom a checking account into a
savings account a high-yieldsavings account, they were able
to get essentially $20,000 inextra income every single year
just as a result of interest onthat cash.
(29:19):
So it's so important not onlyto make sure that your workers
and your employees and your teamand your technology is working
for you, but also your capital.
There's no need to have capitalsitting around doing nothing.
If it's not being used, itshould either be distributed out
to the shareholders and theowners of the business or, at
the very least, it should be putinto some sort of an
opportunity that has very littlerisk and generates positive
(29:42):
cash flow.
Speaker 1 (29:44):
That's so good.
I got two more questions foryou.
I'm really excited for this one.
If you weren't doing financetotally different world what
would you be doing?
Speaker 2 (29:56):
Or what would you want to be doing.
You know, believe it or not, myundergraduate degree is in
English literature, so I thoughtat the time in college that I
was going to become a novelist.
After I graduated I learnedthat the career prospects for a
novelist were not especiallygood, which is part of the
reason I went back to businessschool and ultimately entered a
(30:17):
career in finance and accounting, which I enjoyed very much.
But I would likely work as anovelist if I were not doing my
present occupation Although, tobe perfectly honest at this
point, I'd probably do a fairbit of writing on the subject of
accounting and finance, becauseit's just something that
fascinates me.
Speaker 1 (30:33):
That's awesome.
Post it up.
Still in Hawaii, you think on abeach writing novels, or would
there be a different landscapefor you?
Speaker 2 (30:43):
I would stay right where I am, but in my opinion,
just personally travel is one ofthe great joys in life.
I've had the privilege oftraveling to more than 45
countries in my lifetime and I'mjust about every continent
missing Antarctica and Africastill but it's really eye
opening to go around the worldand see how other people are
living and also to realize thatwe're all human, no matter
(31:06):
matter where we live.
Speaker 1 (31:07):
There's a lot more that connects us than divides us
well, and I need to ask anotherquestion now because, because
of the travel, because we weshare that, that bug in the
passion for traveling, if youcan, because this is probably a
very difficult question, I knowit's hard for me what, what's
been your favorite place orcountry that you've traveled to,
(31:27):
or, I guess, what are some ofthe spots that are highlights
for you, because it's apples andoranges to some of them.
Right, it's hard to maybe pickthe most favorite one for a
variety of different reasons,but I would love to know what
stands out as some of the placesyou've traveled to.
Speaker 2 (31:44):
What I really enjoy is seeing places that have a
deep connection to human history.
So one of my favorite visits.
I had the chance a few yearsago to visit Angkor Wat in
Cambodia, which is just aphenomenally beautiful temple
and what struck me about it?
It's a World Heritage Site.
It's been around for a verylong time.
It's actually.
There's a little town that'sright up next to the temple
(32:06):
where people live and they havea relatively modern life because
life goes on um, even thoughthey're in the the shadow of
such an architectural wonder.
In 23, I had a similar chance tovisit machu picchu in peru,
which was absolutely incredible,but likewise there's a town at
the foot of uh, at the foot ofthe mountain called agua
caliente, and it's just aregular place where regular
(32:27):
people live.
So it's so interesting to seethese historical artifacts
directly connected to modernhuman life.
I just love that.
Speaker 1 (32:34):
That's awesome.
Okay, so I could have a wholeother podcast talking about
travel stories and hearing allabout that.
I would love to know.
Last question what's the bestadvice that you've ever received
?
Speaker 2 (32:52):
This may sound a little generic as well, but when
it comes to being successful inentrepreneurship, or successful
in business in general, nothingbeats tenacity.
Talent doesn't beat it, charmdoesn't beat it.
There's nothing in the worldthat impacts success quite as
much as just not giving up, andwhat I want to emphasize here is
(33:12):
not giving up does not meannever failing.
It means standing back up aftera failure and continuing to
move forward, and that's reallywhat impacts success, in my
opinion.
Speaker 1 (33:28):
I love that.
Speaker 2 (33:30):
You only lose when you quit, and if you just keep
going, you can't lose, and eachtime we fail, too, it helps us
to succeed in the future.
In my experience, I meaneveryone.
We work with every effort wemake.
It's more likely to besuccessful if we draw upon what
we've learned from our previousfailures.
Speaker 1 (33:49):
That's amazing, jack.
Where can people get in touchwith you if they want to reach
out, potentially work with you?
Just continue the conversationthat we've started.
You've shared a lot of greatinsights.
What's the best spot for themto get in touch?
Speaker 2 (34:03):
The best thing to do would be to go to the website
pacfinscom.
That's P-A-C-F-I-N-S and it'sshort for the Pacific Accounting
Company.
So if you go to pacfinscom,there is my contact information
right on the website and I wouldbe happy to have a conversation
.
Speaker 1 (34:18):
Awesome.
We'll put that in the shownotes, Jack.
I can't thank you enough forcoming on.
This was amazing.
Thank you for sharing all theinsights and for sharing your
time this afternoon.
Thank you, james, I reallyenjoyed this.
Thanks for tuning into thisepisode of CFO Chronicles the
secrets behind success.
I hope you found value intoday's conversation.
As we wrap up, I'd love for youto do two things.
(34:39):
First, make sure to subscribeto this podcast so you don't
miss any future episodes.
If you enjoyed today'sdiscussion, please rate and
review the show.
It helps others discover theinsights we share here.
Second, if you're ready to takeyour business to the next level
and attract the high endclients you deserve, head over
to accountingleadsnowcom orclick the link in the show notes
to book your strategy.
(35:00):
Call it's time to positionyourself as the advisor your
clients need.
And don't forget you canconnect with me on LinkedIn to
stay up to date on what'shappening in the world of
accounting and financial growth.
We've got exciting topicscoming up, so stay tuned for the
next episode of CFO Chronicles.
Until then, keep pushingforward.
Your growth is just onestrategic move away.
Speaker 3 (35:21):
Thanks for listening to CFO Chronicles the secrets
behind success.
We hope today's episodeprovided valuable strategies to
help you attract more highpaying clients.
Be sure to subscribe, followand share with fellow
professionals.
Connect with us on LinkedIn andleave a review or comment to
join the conversation.
Your feedback helps us bringyou the best insights in finance
(35:45):
and marketing.
Until next time, keep strivingfor success and unlocking your
business's potential.
Welcome back to another episode of CFO
Chronicles the secrets behindsuccess, the show where we dive
into the stories and strategiesof the financial minds who are
driving businesses forward.
I'm your host, james Donovan,and today's guest is someone who
spent his career helpingentrepreneurs not just balance
the books but realize their fullpotential.
Jack Weinstein is the CFO atPacVins and he supported over 50
(00:22):
successful entrepreneursthroughout his journey at
PacVins, and he's supported over50 successful entrepreneurs
throughout his journey.
What makes Jack stand out isn'tjust his depths of financial
knowledge.
It's his belief that growth canbe exponential, that low cost
doesn't always mean costeffective and that success
demands a clear plan.
He's here today to unpack whatfinancial firepower really means
, how founders can avoid thecommon traps that stalls growth,
(00:45):
and why careful financialmanagement isn't just an
obligation, it's a weapon.
So let's get into it.
Thank you so much, james.
It's a pleasure to be here.
Jack, thank you so much forbeing here.
I'm really looking forward tothis one.
I know you got a ton ofknowledge.
But first, for the listenerswho aren't watching this
recording, we need to talk abouthow you always have amazing
(01:08):
hawaiian shirts on living inhawaii.
You never disappoint showing up.
See the palm trees.
In the background you have thehawaiian shirts let's talk a
little bit about.
You must have a massivewardrobe of hawaiian.
Speaker 2 (01:23):
I do at this point.
Actually, almost all of myclothing is Hawaiian shirts.
I used to wear very traditionalsuits and ties every day, which
was a lot less fun in myopinion, but I moved out here to
Hawaii in 2023.
I moved from San Francisco andI've lived all over the country
previously, but it's a pleasureto be here.
I originally came out to keep acloser eye on my parents, who
(01:45):
are in their 80s.
They're slowing down a littlebit, but what I found when I got
here is that there are not alot of traditional, extremely
competent accounting firms orfinancial planning resources
available for businesses inHawaii.
Also, ever since the pandemicever since COVID I've done
almost all of my work remote.
I work with clients all acrossthe country because you never
(02:05):
know where entrepreneurs mightchoose to be, and accounting and
finance is a function I'vefound that can often be done
very effectively from a remotelocation.
It doesn't necessarily requirea person sitting in the office
typing out figures on aspreadsheet.
A lot of that work can be donecapably and at a more cost
effective rate elsewhere in thecountry I love it and I love
(02:28):
that.
Speaker 1 (02:29):
You just you bring so much personality and you're
like you said.
You're not.
You're not wearing a suitthat's uncomfortable.
You're, you're yourself.
You're really taking in the.
You know the culture of Hawaii,and you got the shirts to match
.
Every time we jump on Zoom.
I look forward to seeing whatnew shirt is Jack going to have
on.
So this is great.
So, Jack, let's start with yourpath.
(02:49):
How did you land in the CFOseat at PacVins and what keeps
you, or what's kept you, in thegame all these years?
Speaker 2 (02:58):
So what I want to mention is I'm actually doing my
dream job right now, whichmight be the first time you've
heard this from an accountant.
It's not traditionally a dreampath, but I'll tell you.
I started my career in theFortune 500 world.
I worked for 20th Century Foxfor many years in corporate
finance, and, although there isa lot of stability and certainly
a lot to learn working for aFortune 500 company, everything
(03:20):
moves so slowly.
Everyone is extremely siloed.
They have their own littlespecialties, their own little
areas, and it takes a very longtime to make any sort of a
decision that actually impactsthe overall business.
Since leaving the company, I'vehad the opportunity to work with
a variety of entrepreneurs,ranging from bioscience
companies and pharmaceuticaldevelopers to crypto mining
(03:41):
facilities, to agriculturalfacilities, large food
processors, you name it.
It's in quite a few familyoffices and law firms as well,
and what I've benefited from,what I've learned from working
with this wide variety ofclients, is that it's just so
much more lively and so mucheasier to get decisions made
(04:01):
when I'm working directly withentrepreneurs that are building
their own business, that areliving their own dream, and it's
inspiring to get up and talk tothose people every day.
Their challenges may bepressing.
They may be dealing with a lotof internal issues that make it
a little bit complicated tomanage the firm.
Speaker 1 (04:30):
But at the same time, that's a path they chose for
themselves.
These are some of the mostambitious people in the country
that have a dream and they puteverything else beside them
behind them in order to pursuethat dream.
That's awesome.
You mentioned you've supporteda handful of entrepreneurs.
It's so cool what you're doingand how you can get involved and
help them see their dream cometo fruition and come to reality.
What drives you to keep doingthe work that you do?
Let me give you an example ofone of the first entrepreneurs I
(04:52):
supported.
Speaker 2 (04:54):
This, in fact, was the first opportunity I took on
as a chief financial officer in2018.
At the time, I was working foran investment bank in California
called GT Securities, which isa role that I took on after I
left 20th Century Blocks and webrought on a client that had a
vision for developing painrelieving pharmaceutical
products specifically for thehospice population.
(05:14):
So the founder what reallyinspired me about this gentleman
?
The founder was the chiefoperating officer of a company
called Heart Hospice, which wasone of the largest privately
held hospice organizations inthe United States.
His partner was a medicaldoctor, a researcher from
Columbia University, who wasresponsible for developing these
products, and they had a visionto build out this
(05:37):
pharmaceutical manufacturingfacility and produce these
proprietary pain relievingproducts specifically for the
hospice population.
It struck a very personal chordfor me.
I have a younger brother thathas a serious autoimmune disease
and he actually has benefitedfrom related products similar to
the ones that they were goingto produce.
So I was living in Los Angelesat the time, working the
investment banker lifestyle 80hours a week, suit and tie every
(06:00):
day and I packed everything up,I quit my job and I moved out
to rural Oklahoma in order topartner with these two guys.
I was the second employee.
They had one executiveassistant that was supporting
them at the time.
Zero office space, pretty muchzero resources.
But we really believed in whatwe were doing and we pulled
(06:20):
together our efforts.
We pulled together our contactsand over the course of the next
two years we raised about $25million in equity capital.
And we put it to work.
We bought an old Tyson Foodschicken processing plant in
eastern Oklahoma, a big, aging40-acre industrial complex
that's dominated by a massive65,000-square-foot cast-in-place
concrete bunker.
(06:41):
Basically that Tyson had movedout of 10 years earlier.
I mean by the time we moved inwe got an extra deal on the
place.
It had cost Tyson around $30million to build.
We acquired the property for $2million and the reason why is
because the windows were brokenout, there were wild animals
living in the property, therewere weeds growing up through
the parking lot.
It was in rough shape.
The town it was in, stilwell,only had 4,000 residents and
(07:05):
unemployment was about 40%.
It was in a tough position.
So we came in.
We acquired the property, weredeveloped it over the course
of about two and a half yearsand turned it into believe it or
not a modern pharmaceuticalmanufacturing facility in rural
Oklahoma, and by the time I leftthe company and moved back to
California, we were at 250employees and we'd gone from
(07:28):
nothing to eight figures inannual revenue.
So I had a chance to support anentrepreneur two entrepreneurs
through the entire startupjourney, from square one into a
successful company, and it wassuch a joy and revelation.
Speaker 1 (07:39):
Sure, just there would be so many lessons and
acquired from seeing you know ateam of three or four.
So you mentioned you were thesecond employee being hired to
eight figures a year in annualrevenue and just like I'm sure
(08:06):
it wasn't all up and to theright a little bit of maybe some
of the hardest times thateither you experienced and then
you over, you overcame, or thatthe business experience that you
were able to overcome as agroup what we did when we first
started was we leased theproperty from the existing
owners with the option topurchase it in the future.
Speaker 2 (08:19):
They were quite happy to give us that option because
they didn't anticipate we wereactually went by the building
and do anything with it.
But we set up our initialoffice there and it was a little
eerie at first.
I mean, we were using maybe athousand square feet out of this
65,000 square foot structure.
So the rest of it we kept thelights off, we kept the heating
and the cooling off and the restof the building and it was kind
(08:42):
of like a large ghost facilitythat we used a small corner of
initially.
And starting a company is afearful process.
I mean, each one of us wereconcerned.
If this doesn't work out, arewe going to be able to make a
living?
Will we be able to pay ourbills?
We all, I think, had sacrificedsomething in order to make that
happen, and that's theentrepreneurship journey right
(09:03):
there.
It does require quite a leap offaith to move from a secure
employment opportunity intostarting a business or
participating in a startupbusiness, but the kind of people
that are willing to make thatleap historically we've seen the
people that do that are theones that are willing to enable
to build significant companiesand institutions throughout our
country and, at the end of theday, make a measurable
(09:26):
difference even in the businesshistory of the United States.
So it's I just admire people somuch we're willing to either
start a business or participatestartup.
Speaker 1 (09:34):
That's so cool.
Congrats on going through thatwhole experience and helping
them, you know, be an integralpart of that reaching, you know,
eight figures and growing fromless than you can count on a
hand to 250 people.
Speaker 2 (09:51):
That's so cool.
Well, James, one of thequestions you asked me was about
some of the challenges involved, and I'll be the first one to
tell you I did a lot of thingswrong with that process as well.
So if I were going through ittoday, I would have reached out
strategically to venture capitalgroups in order to find the
appropriate financing for us topursue the venture.
We raised $25 million, but itwas from 120 different
individual accredited investors,all of whom had my personal
(10:13):
cell phone number, who wouldcall me at all hours of the day
and night for an update, andthat alone quickly turned into a
full-time job, in addition totrying to manage the cash flow
and keep on top of theaccounting and the tax filing
and the payroll and everythingelse that a business needs in
order to operate.
And as we went forward throughthe process, we were often
stumbling a little bit.
Anyone that's involved in astartup is typically wearing
(10:35):
multiple hats.
I mean, at one point I wasdoing a lot of interviews for
people that were going to be onthe production line.
They didn't know the firstthing about manufacturing
pharmaceuticals.
All I could really judge waswhether a person's personality
seemed like they would be a goodfit for the team, whether they
were enthusiastic about themission that we were pursuing.
But we were growing so quicklyand we had such a limited
(10:56):
executive team available toconduct these interviews, I
ended up doing quite a few ofthem myself, and it was really
an eye-opening experience that'syeah.
Speaker 1 (11:06):
That's just so cool to hear your perspective on that
, and all the lessons would havecome across.
I can't imagine you know givingout your personal number to
that many people, having thatmany people call that.
I'm surprised you didn't just,you know, get a new phone or
hire someone to look after yourphone for you.
Um Jack, what's one thing thatmost people, even founders,
(11:28):
don't understand about what aCFO really does?
Speaker 2 (11:33):
I think a lot of founders have the assumption
that, hey, I'm in charge of thebusiness I do in an early stage.
Business is be responsible forapproving large expenditures,
approving hiring plans,approving anything that needs a
(11:56):
final decision made on it, butnot necessarily preparing the
data that goes into supportingthose decisions.
A lot of the entrepreneurs andfounders that I've worked with
they have consistently stumbledbecause, even if they come from
a financial background, it takessuch a tremendous amount of
time to both properly preparethe accounting records and then
also to offer.
The second step here iscritical to offer valuable
(12:19):
insight and analysis into whatthe records actually mean for
the business.
It's one thing to say, hey,we're making $10,000 a month,
we're losing $10,000 a month.
The most critical next step iswhat does that mean for the
business and what are ouroptions to do something about it
?
If we have excess capital, it'snot that useful for a CEO to
hear, hey, we've got $10,000extra a month coming in.
(12:42):
Having specific spending planson how that money could be used
to further the business growthand achieve the objectives of
the company as a whole, that'sreally indispensable.
Conversely, if the company islosing money, chief executives
need to know how much time theyhave in order to make changes in
the business and what kind offeasible changes could be made
in order to get the business outof a bad situation, whether
(13:02):
it's reducing overhead and,potentially, headcount in order
to shave off expense, orpursuing a loan, or bringing on
outside investors in order toshave off expense or pursuing a
loan, or bringing on outsideinvestors in order to provide
additional capital and get to aplace where the business is once
again healthy.
The CEO and entrepreneur, asmuch as possible, needs to be in
that final decision making, andany time that they're spending
digging through data, trying tocompile information in order to
(13:25):
get enough information toactually make the decision, is
time that's wasted and not theirbest and highest use of their
abilities.
Speaker 1 (13:33):
Yeah, it's so true.
I think it always comes down tothe delegation piece, right,
and how much are you able noteven willing how much you're
able to let go of and reallocateyour time in a higher revenue
generating activity?
If you're not the expert in thenumbers, why are you hanging
out there Like let someone elsewho is the expert do that to get
(13:54):
the highest value you spoke alittle bit about.
If firms are losing money, ifthey need to shave off, they
need to reduce headcount.
How do you navigate thoseconversations with founders
where maybe the founder believesno, if we lose anybody like the
workload, everyone's going tobe super stressed, everyone's
going to be taking on too muchstuff.
(14:15):
But you're telling them look,the numbers don't make sense,
you need to reduce your payroll.
How do you navigate thosedifficult conversations?
Speaker 2 (14:24):
It's a tough conversation sometimes and I'll
give you a specific example.
I currently work as fractionalCFO for a client that does about
$8 to $9 million a year.
They're a respectable smallbusiness and they're in a
position right now that theylikely have to reduce some
headcount in order to remainsolid and in a good financial
position is they've had somepeople with them from day one
(14:47):
who very much believed in thebusiness, who might potentially
be on the chopping block, whoactually voluntarily reduced
their salary because theybelieved so much in the business
for the first couple of months.
In some cases, the first twoyears, and cutting those people
who were such believers in theteam can be a real challenge.
At the end of the day, it'simportant to do whatever's
(15:07):
necessary to keep the businesshealthy, but it doesn't
necessarily mean that's theoption that chief executives
should take.
Sometimes there are no bettersolutions.
A business has to be profitableultimately in order to continue
functioning.
Otherwise it can't reallyremain a business.
It's going to have to be anon-profit.
But if there is a clear pathwayto get to profitability by
(15:27):
spending more money, often it isbetter to pursue a loan or it
is better to bring on outsideinvestment.
And that is a reallysignificant distinction, too,
between a controller and a CFO.
This is something that a lot ofentrepreneurs, I think, do not
fully appreciate, and anaccountant or a controller is
primarily backwards looking.
(15:48):
They're focused on maintainingappropriate accounting records
for the business running thepayroll, making sure the tax
filings are done correctly.
It's an indispensable businessfunction but at the end of the
day a controller is typicallygoing to give a chief executive
raw information on the business.
Here's your P&L statement.
Here's your balance sheet.
Now you figure out what it isthat you need to do.
A chief executive officer cantypically go the extra step and
(16:10):
actually suggest specificpathways that business can take
to deploy additional capital tosave money or cut spending and
then, most critically, toactually go out execute on those
plans for the chief executive.
So the chief executive may say,ok, I want to take a loan out
in order to support the growthof the business or to avoid
laying off debt.
Well, somebody's got to pick upthe phone and either find an
(16:33):
appropriate broker or find anappropriate lender and negotiate
terms with them that fitbusinesses' needs.
Sure, typically a CEO can dothat, but it is a little bit
specialized and it takes a lotof time.
At the end of the day, thechief executive officer is
someone that they can task with.
Okay, we agree, we need $5million in additional capital by
(16:57):
this date.
Go, figure out a way to makethat happen.
And that often is a big part ofthe role that I feel these
entrepreneurs.
Speaker 1 (17:01):
There's so much value there.
Jack, Thank you so much.
You're very passionate abouthelping businesses obtain what
you call financial firepower.
What does that look like inpractice?
Speaker 2 (17:15):
It's a good question, and the biggest mistake that I
see when companies are goingafter this financial firepower
is they are thinking about theirneeds, which is reasonable.
Hey, I need $5 million for mybusiness.
I know exactly what I'm goingto do with this $5 million.
Let me just convince the lenderthat I'm going to do with this
$5 million.
Let me just convince the lenderthat I'm a really cool business
and they're going to give methe money.
Lenders, financiers, investors,anybody that's providing
(17:38):
capital they're human beings andthey have their own goals that
they need to satisfy, sounderstanding what those goals
are is particularly critical inorder to come to a successful
conclusion for the entrepreneur,and I'll give you an example of
this.
A big part of my career I'vespent supporting either private
equity groups or venture capitalgroups.
Speaker 1 (17:56):
I was the CFO for Kevin.
Speaker 2 (17:57):
Harrington's venture capital group down in Boston.
He was one of the originalShark Tank investors.
I served as interim CFO forEnthos Capital, which is a
private equity group in SantaMonica that manages a $3.5
billion fund.
They currently serve as venturecapital a CFO for Impax Capital
in Texas, which manages anapproximately $2 billion fund as
(18:18):
well, and so what I've learnedis I've spent a lot of time
sitting on the other side of thetable evaluating opportunities
to place capital, and all ofthese groups have their own
consideration.
If it's a family office, theywant to typically know that
there is a clear pathway for anexit on the investment, whether
it's refinancing a property orwhether it's raising additional
(18:39):
capital or simply receivingsufficient distributions in
order to make the return ontheir investment make sense.
If it's a VC group or it's aprivate equity group, they've
got their own people they haveto be responsible to, called
limited partners.
These are the groups that areputting in capital.
If it's a private equity groupand maybe a large limited
partner we worked, for example,at one point will be endowment
(19:00):
at Yale University.
Some of them are small limitedpartners that are just going to
put in one hundred, two hundredthousand dollars.
But they're all people that theVCs and the private equity
groups have to answer to andthey want to look good for.
And what that means is not onlygetting the best possible
return on capital, but alsoshowing that there's positive
unrealized gain sometimes thatthey can report to these
(19:22):
financial groups.
And an unrealized gain, ofcourse, is just an increase in
the value of an investment thathas not yet been realized.
So if I buy a stock, the valueof it goes up and I don't yet
sell the stock, I have anunrealized gain, an increase in
the value of my asset.
So what these guys want to knowif it's private equity group or
a venture capital group thatyou, as an entrepreneur, are
(19:42):
going to for funding they wantto know that not only you have a
clear pathway to repay or toexit them from the investment,
but also that you have a clearpathway to continue growing your
company, even if you need moremoney.
What these groups wouldtypically rather hear is not hey
, I want to get $5 million fromyou and then I'll pay you back
$5 million.
They want to hear I'm going toget $5 million from you and use
(20:04):
it to double the size of mycompany and then I want another
$10 million from you so I can doit again, and that goes over
very well.
That's something that they canreport back to their limited
partners.
We made a great investment, youhad a terrific increase in your
unrealized gain, and now we'remaking a second investment in
the same company because ourjudgment was so good and now we
get to continue participatingwith this extraordinary
(20:25):
entrepreneur.
So what I'm trying to say is asan entrepreneur, it's so
important to put yourself in theshoes of the capital provider
and think about what it isthat's important to them, not
just what's important to you asan entrepreneur and what you're
going to do with the money.
Speaker 1 (20:40):
It's interesting.
That's a cool perspective shift, though, to look at it through
that lens.
Jack, you spoke a little bitearlier about potentially taking
on loans.
What would you say to thebusiness owner who, I don't know
, maybe is a little bituncomfortable taking a loan?
Or or you're like hey, look,data shows and maybe let's put
(21:02):
it into the marketing, themarketing perspective.
So you look at someone and youcan say, hey, right now you're
getting a you know five X, nineX return on your ad spent.
Whatever that may be, there'sonly so much cashflow that's
coming in and out so you're notable to increase your ad spend a
ton, despite seeing a reallygood return.
(21:25):
Maybe you're you're bleedingelsewhere, whatever it is, if
someone's uncomfortable goingout and taking a loan.
But you know, look, if youpoured a lot of gas onto that
fire, you have data showing howmuch of a return you'll get.
How do you coach some of yourclients through that
decision-making process, and isit the right decision to go get
a loan or is it better to try toplug where some of the gaps are
(21:48):
elsewhere in the business?
Speaker 2 (21:51):
It's a fair question too, because if the business is
persistently losing money,getting a loan just buys more
time.
It doesn't necessarily solvethe problem.
So a loan does have to becoupled with a fair plan to
either increase revenue ordecrease spending, or both in
order to get the business into astabilized position.
A loan should have a very clearobjective associated with it.
For an entrepreneur, I needthis loan to get the business
into a stabilized position.
A loan should have a very clearobjective associated with it.
For an entrepreneur, I needthis loan to get the business to
(22:13):
this position, and then we'llbe comfortable from there on out
.
An entrepreneur also needs to bethoughtful about what kind of
loan they're taking, becausethere's a lot of different
lenders out there, ranging frommerchant capital, advance or MCA
loans, which tend to beextraordinarily expensive.
They're often above 30% annualinterest because they build in
all kinds of fees and penaltiesthat make a loan quite expensive
(22:36):
.
But they're unsecured.
They don't typically requireany sort of collateral.
On the other hand, the loansthat have the least expensive
cost of capital are generallyloans that are secured by real
estate or other hard assets.
If there are assets like that totake advantage of, that's what
I always encourage my clients toexplore, and one thing to keep
(22:56):
in mind is that it's not alwaysnecessary to borrow against the
current value of these assets ifwe can justify an increase in
the value of the assets.
And I'll give an example in theform of the pharmaceutical
facility we worked on inOklahoma.
We bought this facility for $2million and two years later I
was able to secure a $10 millionloan on this facility, which
(23:19):
begs the question what kind oflender is loaning $10 million on
a $2 million facility?
That's not very much capital ascollateral.
What happened was we showedthat we had a clear plan to
build out the facility andultimately improve the valuation
of the property from $2 millionat that point to $20 million.
Once our improvements werecomplete, we got an objective,
(23:39):
independent appraiser to come inand provide an attestation that
that was indeed the case, andthe lender was willing to loan
us money on that basis ofimproving the property.
And ultimately they did see asignificant increase in the
value of the collateral and wewere able to repay the loan.
So the lender was happy and thebusiness was happy.
There's a lot of thought thatgoes into successfully closing
(24:02):
on a loan and especially makingsure it's the right loan for the
business, but that's a big partof what I help provide
entrepreneurs through.
Speaker 1 (24:09):
That's cool, so it's not.
I need a loan to run to thebank and ask for whatever amount
like.
Really think about what theobjective is.
Otherwise you're kind of justbuying time and you're digging a
hole.
Speaker 2 (24:22):
It takes some thought , believe it or not.
80% of business loans in ourcountry come from private loans.
They don't come from creditunions.
They don't come from banks.
Only 20% of loans come fromcredit unions or institutional
lenders like banks.
So there's a lot of privateoptions out there, and when it
comes to private world, almosteverything is negotiable.
You just have to find the rightpartner that's able to
(24:42):
negotiate effectively on behalfof the business.
Speaker 1 (24:45):
That's cool.
Remind me after Jack, I gotsomeone I need to introduce you
to in the loan space.
I think you two could can workreally well with one another.
What's one habit you've pickedup from working with
entrepreneurs that's influencedhow you think about business?
Speaker 2 (25:03):
There's a lot of good habits that I picked up from
entrepreneurs.
One, though, that really standsout to me is it's totally fine
to disagree, whether at thesenior leadership team, whether
it's the CFO that disagrees withthe CEO or the chief operating
officer has a different opinionthan the CEO.
Totally fine to havedisagreements, but they should
(25:23):
be handled in private.
It's so important to projectconfidence, both to the team and
to customers, and to show thatwe believe the business is in a
good position and things areonly going to get better.
Even if the business is facingsome significant jeopardy,
that's ultimately theresponsibility of the C-suite to
solve.
So any disagreements, anyinfighting, really should occur
(25:46):
privately, in individualconversations.
It's so important to projectconfidence and, in my opinion, a
positive attitude to everyoneelse that works for the business
, because everyone else that'son the team, they're showing up,
they're doing their best everyday and they're not responsible
ultimately for the higher-levelstrategic or financial
considerations that guide theentire business.
(26:08):
The c-suite is responsible forthose things and, um, any, any
disagreement about those itemsreally needs to be handled
behind closed doors that's good.
Speaker 1 (26:19):
I I really like that.
I got a couple rapid firequestions for you here and then,
um, as, as we get to the end,then then we'll wrap this up
your favorite business orfinance quote that you live by.
Speaker 2 (26:33):
Wow.
Speaker 1 (26:35):
There's so many good ones out there.
I know I'm going to put you onthe spot here a bit.
Speaker 2 (26:42):
I should think of something more profound, but I
mean one of the quotes.
This is going to sound like alittle bit of a dorky accounting
quote, but it's an old schoolone, and a penny saved is a
penny earned from.
Benjamin Franklin is somethingthat's always stuck with me,
because I do see a lot ofentrepreneurs that spend money
unnecessarily on things thatthey think would show well for
(27:04):
the company but don't alwayshave a positive impact on the
bottom line.
And I'll give you an example.
I worked with an entrepreneurrecently that was successfully
raised about heat figures forhis business and the very first
thing he went out did was buy aprivate jet for the business and
this is a business that had onelocation and he lived within a
few miles of the one location,so there was no need really to
(27:26):
travel to other states.
But he felt like it wasimportant for the business to
have a private jet in order toshow a veneer of success to
outside partners.
Ultimately, it proved to be ahuge headache.
Private jets are tremendouslyexpensive.
I learned firsthand that yourequire a separate insurance
policy on the engine compared tothe body of the aircraft.
You've got big pilots, there'shangar fees, there's all kinds
of additional insurance costs.
(27:46):
So it's a prohibitivelyexpensive investment unless the
business really needs one.
So don't spend money unless youhave to spend the money, unless
it actually goes to somepurpose that supports the growth
of the business and theentrepreneur's vision.
Speaker 1 (28:03):
That's a great example.
Thank you for sharing that.
Your go-to book or podcast thatshaped how you lead.
Speaker 2 (28:14):
I'll cite another old example.
I guess I have a lot of oldones, but in high school one of
the books I was tasked to readwas the Richest man in Babylon,
which is really a book that'smore about personal finance than
about business leadership, butI found it applies very well to
business leadership and thecentral thesis of the book is no
(28:35):
matter who you are, your laboris worth a certain amount, but
also your capital is worth acertain amount.
It's important to make yourcapital work for you.
A lot of the clients that Iwork with that do prove to be
very successful.
I'll cite one in particular alaw firm that's doing very well.
They end up producing a lotmore cash than they spend every
month, which is great.
But when I came on board withthis client, they were just
(28:57):
keeping all that cash in achecking account and it built up
to hundreds of thousands ofdollars that they were basically
earning absolutely nothing onthat they were basically earning
absolutely nothing on.
By simply moving that moneyfrom a checking account into a
savings account a high-yieldsavings account, they were able
to get essentially $20,000 inextra income every single year
just as a result of interest onthat cash.
(29:19):
So it's so important not onlyto make sure that your workers
and your employees and your teamand your technology is working
for you, but also your capital.
There's no need to have capitalsitting around doing nothing.
If it's not being used, itshould either be distributed out
to the shareholders and theowners of the business or, at
the very least, it should be putinto some sort of an
opportunity that has very littlerisk and generates positive
(29:42):
cash flow.
Speaker 1 (29:44):
That's so good.
I got two more questions foryou.
I'm really excited for this one.
If you weren't doing financetotally different world what
would you be doing?
Speaker 2 (29:56):
Or what would you want to be doing.
You know, believe it or not, myundergraduate degree is in
English literature, so I thoughtat the time in college that I
was going to become a novelist.
After I graduated I learnedthat the career prospects for a
novelist were not especiallygood, which is part of the
reason I went back to businessschool and ultimately entered a
(30:17):
career in finance and accounting, which I enjoyed very much.
But I would likely work as anovelist if I were not doing my
present occupation Although, tobe perfectly honest at this
point, I'd probably do a fairbit of writing on the subject of
accounting and finance, becauseit's just something that
fascinates me.
Speaker 1 (30:33):
That's awesome.
Post it up.
Still in Hawaii, you think on abeach writing novels, or would
there be a different landscapefor you?
Speaker 2 (30:43):
I would stay right where I am, but in my opinion,
just personally travel is one ofthe great joys in life.
I've had the privilege oftraveling to more than 45
countries in my lifetime and I'mjust about every continent
missing Antarctica and Africastill but it's really eye
opening to go around the worldand see how other people are
living and also to realize thatwe're all human, no matter
(31:06):
matter where we live.
Speaker 1 (31:07):
There's a lot more that connects us than divides us
well, and I need to ask anotherquestion now because, because
of the travel, because we weshare that, that bug in the
passion for traveling, if youcan, because this is probably a
very difficult question, I knowit's hard for me what, what's
been your favorite place orcountry that you've traveled to,
(31:27):
or, I guess, what are some ofthe spots that are highlights
for you, because it's apples andoranges to some of them.
Right, it's hard to maybe pickthe most favorite one for a
variety of different reasons,but I would love to know what
stands out as some of the placesyou've traveled to.
Speaker 2 (31:44):
What I really enjoy is seeing places that have a
deep connection to human history.
So one of my favorite visits.
I had the chance a few yearsago to visit Angkor Wat in
Cambodia, which is just aphenomenally beautiful temple
and what struck me about it?
It's a World Heritage Site.
It's been around for a verylong time.
It's actually.
There's a little town that'sright up next to the temple
(32:06):
where people live and they havea relatively modern life because
life goes on um, even thoughthey're in the the shadow of
such an architectural wonder.
In 23, I had a similar chance tovisit machu picchu in peru,
which was absolutely incredible,but likewise there's a town at
the foot of uh, at the foot ofthe mountain called agua
caliente, and it's just aregular place where regular
(32:27):
people live.
So it's so interesting to seethese historical artifacts
directly connected to modernhuman life.
I just love that.
Speaker 1 (32:34):
That's awesome.
Okay, so I could have a wholeother podcast talking about
travel stories and hearing allabout that.
I would love to know.
Last question what's the bestadvice that you've ever received
?
Speaker 2 (32:52):
This may sound a little generic as well, but when
it comes to being successful inentrepreneurship, or successful
in business in general, nothingbeats tenacity.
Talent doesn't beat it, charmdoesn't beat it.
There's nothing in the worldthat impacts success quite as
much as just not giving up, andwhat I want to emphasize here is
(33:12):
not giving up does not meannever failing.
It means standing back up aftera failure and continuing to
move forward, and that's reallywhat impacts success, in my
opinion.
Speaker 1 (33:28):
I love that.
Speaker 2 (33:30):
You only lose when you quit, and if you just keep
going, you can't lose, and eachtime we fail, too, it helps us
to succeed in the future.
In my experience, I meaneveryone.
We work with every effort wemake.
It's more likely to besuccessful if we draw upon what
we've learned from our previousfailures.
Speaker 1 (33:49):
That's amazing, jack.
Where can people get in touchwith you if they want to reach
out, potentially work with you?
Just continue the conversationthat we've started.
You've shared a lot of greatinsights.
What's the best spot for themto get in touch?
Speaker 2 (34:03):
The best thing to do would be to go to the website
pacfinscom.
That's P-A-C-F-I-N-S and it'sshort for the Pacific Accounting
Company.
So if you go to pacfinscom,there is my contact information
right on the website and I wouldbe happy to have a conversation
.
Speaker 1 (34:18):
Awesome.
We'll put that in the shownotes, Jack.
I can't thank you enough forcoming on.
This was amazing.
Thank you for sharing all theinsights and for sharing your
time this afternoon.
Thank you, james, I reallyenjoyed this.
Thanks for tuning into thisepisode of CFO Chronicles the
secrets behind success.
I hope you found value intoday's conversation.
As we wrap up, I'd love for youto do two things.
(34:39):
First, make sure to subscribeto this podcast so you don't
miss any future episodes.
If you enjoyed today'sdiscussion, please rate and
review the show.
It helps others discover theinsights we share here.
Second, if you're ready to takeyour business to the next level
and attract the high endclients you deserve, head over
to accountingleadsnowcom orclick the link in the show notes
to book your strategy.
(35:00):
Call it's time to positionyourself as the advisor your
clients need.
And don't forget you canconnect with me on LinkedIn to
stay up to date on what'shappening in the world of
accounting and financial growth.
We've got exciting topicscoming up, so stay tuned for the
next episode of CFO Chronicles.
Until then, keep pushingforward.
Your growth is just onestrategic move away.
Speaker 3 (35:21):
Thanks for listening to CFO Chronicles the secrets
behind success.
We hope today's episodeprovided valuable strategies to
help you attract more highpaying clients.
Be sure to subscribe, followand share with fellow
professionals.
Connect with us on LinkedIn andleave a review or comment to
join the conversation.
Your feedback helps us bringyou the best insights in finance
(35:45):
and marketing.
Until next time, keep strivingfor success and unlocking your
business's potential.
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