Leaders of Modern Finance – Learning at Every Opportunity, Hosted by Ben Murray ft. David Lapter

On this episode of the Leaders of Modern Finance podcast, host Ben Murray, founder of The SaaS CFO, welcomes David Lapter, CFO at Dashlane.

A Wealth of Experience

David Lapter is no stranger to the world of finance. He has spent over 20 years as either a financial consultant or a manager. Having worked across various industries his particular attention to detail has meant that he has learned a great deal during that time.

Early in his career, David recognized his fascination with the startup world. For the better part of the last two decades, no matter his role, or the industry, he has found himself in a startup of some form or another. Such frenetic environments provide prime territory to learn and grow. Being at the ground level of so many businesses gave David an up-close look at the capital raising process and various capital structures while also providing him with room to learn through practice. In more established organizations, standard practices are often more solidified and there’s rarely an opportunity to learn more than rote skills inherent in those roles. In the startup world, however, David had ample opportunities to try his hand at diverse financial approaches and learn the foundational principles that govern those approaches.

This extensive background, and the unique setting that it stems from, has given David a robust understanding of the tools needed to succeed as a financial leader. While much of his wisdom comes from experience in the venture capital space, he hopes the following advice may be helpful to financial managers across a host of industries.

Maintain Optionality

At the beginning of a startup’s journey, the potential pathways forward can seem endless. Those paths can narrow quickly, however, if leadership isn’t intentional about keeping their options open. An example of the kind of situation that may seem to be an asset, but in reality is limiting the available exit options, is raising too much capital too quickly. 

Too much fundraising over a compact timeline may cause the company valuation to rise in such a way that outpaces the actual value of the organization’s assets. This makes it more difficult to sell the business or reorganize the capital structure. Owners and investors may then become locked into a long game that they weren’t prepared for.

David advises his financial peers to ‘earn their way to success gradually’. A slower fundraising plan can give you more exit options and prevent company valuation from running away out of leadership’s control. Oftentimes, having more available options is a greater asset than any bottom-line number.

You Can’t Please Everyone

Businesses must strike a balance between catering to their customer’s needs and staying true to their identity. While it’s tempting to try to capture the greatest share of the market, eventually there comes a tipping point. A market share that is too diverse can only be sustained for so long before an organization becomes unstable in its attempt to take on too much.

As David puts it, a company cannot become so rattled by the success of their competition, or by a desire to reach more customers, that they begin to lose their identity. If a business begins to restructure or alter its model to try to reach a larger market, it’s worth pausing to ask if this is indeed the most effective way to grow. Rather than changing to fit a new niche, a business can commit to providing more and/or better services to their existing base, for example. An established market of loyal and committed customers is a more reliable well to pull from than a completely foreign market, and it doesn’t require redefining the business structure.

This is not to say that a business should never evolve or change. Rather, companies should embrace the fact that there are some customers they will never reach, and so it’s not worth changing their identity to try to do so.

Choose Winning Battles

As well as maintaining a consistent organizational identity, David advises choosing winning battles. A business that opens itself up on too many fronts is often an indication of a business that doesn’t know its own strengths and weaknesses, especially in the startup world, where there is often a frenzy of activity. It can be tempting to move quickly into a new market or a new phase of business. However, doing so without proper planning is a setup for failure.

For David, every market is a battlefield. Successful businesses never go to war without accounting for all their assets, and also recognizing their weaknesses. Battles are chosen not out of impulse but out of a knowledge of where lies the greatest potential for success. Without consideration of the unique assets of an organization, a company can quickly find itself drowning in a host of losing scenarios.

As David puts it, a volatile market environment demands intentionality and a calculated approach.

Assume the Best Intentions

Business is far more than a numbers game. It’s also a complex web of interpersonal relationships that can affect the friction between organizations. That’s why David’s advice extends beyond just the way to engage the market, but also to the way to engage people.

The building of relational bridges is essential to a successful business. A good working relationship between organizational partners can grease the wheels to a bigger bottom line. To assume the best intentions means to avoid getting defensive and to instead recognize that there is probably a good reason behind most decisions. Seldom are people being intentionally malicious, more likely they are simply seeking to bring their own organization greater success, and where strategic partners are concerned, mutual success benefits everyone. Being charitable to others, through words and intentions, can facilitate closer partnerships and quicker upward mobility.

Always Look Forward

The common theme in David’s advice is that of foresight. The financial leader trapped in the past, or the present, is unable to lead effectively. Seeing potential future pitfalls and opportunities is foundational to success. 

Though much of David’s experience comes from the venture capital sphere, this idea of a future-oriented strategy is applicable across the entire financial spectrum. Financial leaders across various industries can benefit from David’s rich experience and underlying principles.

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