Last week, ISF hosted a webinar on the topic of “The role of the VC CFO during a crisis”, as part of our commitment to share knowledge within the venture ecosystem in Israel, to take the caesura created by Covid-19 and seize this moment of silence to take action. Panelists David Cohen, General Manager of SVB Israel and formerly Partner& CFO at Gemini, Amichai Hammer, CFO at investing.com and formerly Partner & CFO at Evergreen and Hadar Kiriati, CFO at vCita and formerly Partner & CFO at Genesis, shared they insights and experience from previous crisis.
To kick it off, when Amichai Hammer was asked regarding the role of the CFO in a VC, he mentioned two key areas of responsibility in addition to the day-to-day work. One of these was the financial monitoring of the portfolio companies and the relationship with the portfolio CFOs. Amichai together with Hadar and David, believes that the macro view across the portfolio and the objective financial analysis brought through the lens of the VC’s CFO is the right counterbalance to the natural enthusiasm and affinity the investment team develops while working with the companies. David took this one step further, whereby he emphasized the role of the VC CFO in steering portfolio companies to bring in the right financial leadership and skill-sets as the company matures. At this stage, another role that the VC CFO should strategically tackle is the exit strategy or financing strategy across the portfolio.
Many of these hats are not new to VC CFOs and are part of the regular life-cycle of a fund. However, in times of crisis, the strategic aspects of financing become critical to a fund’s ability to not only survive a crisis but also to thrive in the aftermath. Allocations, especially in the later part of a fund’s investment cycle, are critical in crisis and here the CFO’s ability to objectively steer the conversation is crucial for the fund’s success. The panelists also mentioned the different financial tools available to venture firms from annex funds to secondary transactions. Here Hadar’s experience, with the one-of-a kind transaction with Insight Ventures, as well as many individual secondary transactions in the portfolio companies were brought to the forefront. Amichai also added the possibility of changing strategy, to correct the course of the fund during times of uncertainty, seizing attractive opportunities that might not be mainstream for the fund and thinking out of the box.
We at ISF, face the same questions dealing with our portfolio, while at the same time, working with venture fund managers to offer them more flexibility in dealing with the capital requirements of their portfolio. In the unforgettable words of Winston Churchill “never let a good crisis go to waste”, the webinar hopefully provided some food-for-thought to our guests on how to leverage their knowledge and add value during these uneasy times.