Anthony Noto, the global co-head of Goldman Sachs’ global telecommunications, media and technology group in investment banking, took the stage at this morning’s TechCrunch Disrupt NY 2013 event to talk about the IPO market, trends, and other topics related to tech companies going public. In one interesting portion of the conversion, Noto offered his opinions on what startups should look for when they’re ready to hire their first CFO.
Noto, for those unfamiliar, has a diverse background in the industry. Before serving as co-head of the Technology, Media and Telecom (TMT) Group at Goldman Sachs, he was co-head of the Global Media Group for TMT Investment Banking. He rejoined Goldman Sachs in 2010 after serving as the National Football League’s executive vice president and chief financial officer for nearly three years, where he oversaw finance and strategy functions, including corporate development, labor finance, operational finance and accounting, tax and treasury. And before the NFL, Noto was the Internet, Entertainment and Cable Equity Research analyst and business unit leader for the Communications, Media and Entertainment Equity Research team at Goldman Sachs. He has also worked at Lehman Brothers, as brand manager at Kraft Foods, and was a U.S. Army Ranger.
One thing Noto stressed, when making his recommendations about what kind of person founders should consider for the CFO position, is that it should be someone you can trust. Whether or not it’s someone who has prior CFO experience is not as important, he explained, saying instead that what this person really needs is the “intellectual capacity and conviction” and is someone who can tell you when you’re wrong.
“The CFO of 50 years ago was an accountant and controller and they made sure that the numbers were audited appropriately and they were disclosed and disseminated appropriately,” he said. “Today, a CFO needs to be more of an operating CFO,” Noto added, “someone who’s using the financial data and the data of the company to help drive strategy, the allocation of capital, and the management of risks.”
You need a partner on your side who can help you make decisions, he said. Questions that you should ask yourself about your potential hire include, “Are they a leader? Can they use data to drive decisions? Can they command respect? Can they drive credibility and hold people accountable?”
And when should a company hire a CFO?, asked panel moderator TechCrunch’s Colleen Taylor.
If it’s an early stage company with less than a hundred people, you don’t need a world-class CFO, said Noto. You need partners and advisors to help guide you. “But as you start to enter the point of needing to generate revenue and needing to raise capital, because you can’t do it easily and efficiently, you need a CFO,” he concluded.
Watch the video below for more of his thoughts on what makes a company a tech company, what IPOs were right on time (LinkedIn, Yelp), and what the IPO market will bring in the future.