Former CFO of Tally shares why CAs should pivot towards startups and lead in blockchain, cyber security and forensics
- The world is changing fast. Technology has taken over our lives. Startups are the talk of the town. Employees are becoming millionaires with ESOPS. Every day, we have thousands of minds pondering on whether they should quit their jobs and be a part of the startup wave.
- Today, we have Sathya Pramod, a seasoned chartered accountant (CA) and investor with over 20 years’ worth of industry experience who in 2017 quit his job as a CFO at Tally Solutions and established KayEss Square Consulting to help early and growth-stage start-ups.
- In the Finance: 2022 and Beyond Series powered by Qapita - CapTable & ESOP Management Platform, Sathya Pramod discusses why finance professionals should keep an open mind about startups and why they should lead in blockchain, cyber security and forensics as well as his views on crypto and other trends.
Why did you decide to quit your role as a CFO at Tally and start on your own?
In 1995, I started out with Deloitte as an article assistant. After qualifying as a CA in 1998, I continued with them and later moved to Ernst and Young (EY), another Big 4 accounting firm.
At EY, it was a whole new experience altogether. I was exposed to internal audit, tax, and corporate finance to name but a few.
In 2002, I moved to AOL India, an American web portal and online service provider. As a startup at that time, I was probably their tenth or twelfth employee and the learnings were amazing.
Over the years, I grew to become the Head of Finance of the company and eventually became the Head of Finance for AOL International, managing over 30 countries.
After almost 10 years at AOL, I realized that maybe it was time for a change and jumped into the startup world as a CFO of Qyuki, an Indian digital media company founded by two big names Shekhar Kapur and A.R. Rahman
This experience helped me understand how startups operate and how nimble one needs to be.
Cisco even invested in our start-up. However, we were a little ahead of our time and things did not go as planned, but it was a wonderful journey.
As luck would have it, I was offered a role as a CFO role at Tally, an Indian multinational technology company that provides enterprise resource planning software.
I thought it was an interesting role and took it up. That is how I returned to the corporate world.
When Tally started investing in a few startups, some of those ventures really impressed me. That is how my journey as an investor started.
Very soon, the urge to build something of my own resurfaced.
I made up my mind that whatever years I had left in my career, I would only work with startups. Without waiting any further, I joined forces with Shivadutt Bannanje, a colleague of mine who headed Tally’s Legal Department.
In 2017, we came up with our latest venture, KayEss Square Consulting, where we predominantly use our expertise in Finance and Law to help early-stage and mid-sized companies.
After working in large companies, what was it like starting up on your own?
Starting out on your own may seem very glamorous from the outside, but building a startup is anything but easy.
You may have to put up a brave face to the outside world, although you are boiling inside.
At Qyuki even though a startup, I was used to getting a salary at the end of the month, but with KayEss Square, I was all on my own. There is so much that you go through as a founder.
In the early stages, you handle sales, tech and HR, all by yourself. That is how you learn the mechanisms of running a startup. You have to be agile in this fast-moving world.
There is no doubt that the process of starting up comes with its own set of challenges. However, once you look past the hardships, you would not think of going back to the corporate world ever again.
As of today, we have invested in several startups, mentored and advised many early-stage startups to go to the next level, helped them manage their funds, and even raised money for them. What started as a 2 member team has grown to 35+ and still a long way to go.
In fact, I just met a very close friend of mine recently.
He is a CFO at one of the largest companies in the world and he asked me, “How about the corporate road?” I said even if God comes and tells me to do that, I am not going to leave the entrepreneurial road. The beauty of start-ups is mesmerizing.
Do finance professionals play a significant role in helping a startup become a unicorn?
Absolutely! They play an integral role in the success of a start-up.
Initially, a company can pull along with the charisma of a founder or an investor. After that, execution matters the most if a start-up is to be a unicorn.
I think it is important for people to understand that they could manage their own finances to some level. However, after that, they will need experts.
I believe that finance professionals have more operational capabilities than just crunching numbers.
On many occasions, I have seen several good CAs and finance professionals helping companies grow multifold. We can see the progression in recent times, as many CAs have made it to the CEO position.
However, not every finance professional is suitable for a start-up as it involves negotiating and having an analytical mind. Thus, having an entrepreneurial mindset is crucial, which I think the new generation of CAs have.
What should finance professionals learn in 2022 when it comes to handling startups?
Business and finances are two things any finance professional needs to understand.
Typically, CAs would understand accounting really well but not finances.
CAs from large cities may have some exposure to finance, but not many understand the business. Honestly, many of them can get away without understanding basic business.
For example, let us take a company like Infosys. If you are doing accounts receivable at Infosys, you can continue doing that for 25 years without any problem. In a start-up, you would not even survive 25 days if you do not understand the basics of business.
You have to juggle everything in the Finance Department. It can get chaotic and that is the beauty of the startup world.
Thus, the first step would be to understand the basics of the business. Build an understanding of business operations so that you can assist the founder(s) in every way possible.
Try to learn how an investor thinks. To improve the business, you should be tracking not just the financial metrics but all the key operational metrics as well.
Business analytics has become a huge part of many large companies. Even early-stage start-ups see it practically these days.
If a finance professional cannot be analytical, his or her days are numbered.
Lastly, what are the new areas of practice should CAs pay the most attention to?
I would very much pay more attention to Environmental, Social and Governance factors (ESG). It is trending on the internet nowadays.
To date, CAs have been good at supporting companies in terms of governance. However, if you are not strong at the E&S areas of ESG, it becomes difficult.
Another huge trend that gained momentum in the previous year was cryptocurrency, and 2022 will be no different. Large corporates like PwC or Ernst &Young are accepting payments in crypto and I think that says something about the current scenario.
I urge all CAs to look into Cyber Security and Forensics, along with analytics. These would very much affect our work.
The world is changing much faster than we can imagine. H&M has already opened up a 3D store in the metaverse.
Do not just play a typical accountant’s role. Instead, look at supporting businesses and see the bigger picture.
As a finance professional, keep your eyes and ears wide open. Try to learn as much as possible and be aware of what is happening around you.