Meet A Minnesota Tech CFO: Mark Sylvester, Invenshure

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Thanks to local commercial real estate pros CBRE for sponsoring the Meet A Minnesota Tech CFO series.

The CFO: Mark Sylvester, Invenshure

When and how did you get started in your finance career, specifically within the tech industry?

My career in corporate finance started the summer after 9th grade! My parents decided that my brothers and I would run short term retail outlets across different towns in northern MN for the entire summer. The only item that we were not responsible for was driving the load of merchandise from town to town. Other than that, we set up of the store, hired temporary employees, priced the merchandise, opened & closed each day, set up the tills, balanced
the register and generally oversaw the daily operations.

What else would a 15 yr old want to do with their summer! I learned about gross margin via our pricing decisions, cost of labor by who & how many people we hired, the delta in different property yields (downtown Duluth square footage came at a much higher cost than a tent rental in downtown Park Rapids), got a crash course on maintaining a strong work ethic, and the importance of having strong relationships with the people around you (customers & employees). Those lessons stuck with me through college and law school and into my first few corporate finance positions, namely my first CFO job at The Emily Program where all of those lessons were re-visited.

My focus within the tech industry didn’t occur until I became CFO of Invenshure. Even though I was shifting from a healthcare services business to a tech-based incubator/venture catalyst firm, the shift didn’t seem too overwhelming because of Invenshure’s healthcare focus.

What is unique about your role with the technology industry, compared to other industries?

What is unique about my role is that I (we – Invenshure) start and run healthtech companies. Invenshure licenses IP from various institutions and builds companies based upon that IP. We have some off-the-shelf technology platforms that can be repurposed to rapidly launch new entities. It’s a novel business-building platform to enable rapid product development followed by a focused go-to-market strategy. Specifically, my role is unique because I am involved in starting and managing multiple companies in parallel (currently, Invenshure has 7 portfolio companies).

My daily activities could include: entity formation, legal review, round structure, fundraising, forecasting from $0 in revenue to millions, discussing the go-to-market strategy, pivoting a business, discussing new opportunities, managing HR items, working with strategic partners, etc, etc, etc., all on seven different companies!

What do you find most interesting or challenging about being a modern-day CFO?

I enjoy the global, broad-based nature about being a modern-day CFO. In my opinion, CFO’s are becoming much more globally focused, both internally to the organization and externally to the marketplace. When we’re able to bring our financially focused and data driven thoughts into a strategic-level partnership discussion, our opinions become very powerful and meaningful. In a sense, we are living at the intersection of execution and strategic vision, and I believe this remains the biggest opportunity for all CFO’s (a quick example below).

Moreover, as we become broader across the organization and marketplace, our relationships to those in and around the business become key. So often, CFO’s can be given a bad rap for living behind the scenes and only caring about the financial performance of the business, a stereotype that I desperately want to change. So, to make the transition to a modern-day, visible & globally focused CFO, I think we need to build sincere and honest relationships with the people all around us – within the business and beyond!

Where were you prior to Invenshure and why did you join Invenshure?

I was CFO of The Emily Program – a national provider of eating disorder services. During my tenure, TEP underwent rapid growth – both organic & M&A. We opened up numerous new facilities in new states and were active in the M&A marketplace after our private equity transaction. Being part of that growth, and being part of building a larger more sustainable business was very enjoyable for me. So, the opportunity to build several healthcare companies in parallel sounded all too exciting, but yet challenging at the same time.

How is success measured in your role as a CFO?

In my opinion, CFO’s should always be looking around the corner and preparing the business for what’s about to come, not dealing with what’s already come. This is why it’s so important to live at the intersection of strategic vision and day-to-day execution – by understanding the business’s strategic vision, and also considering what’s about to come, CFO’s have the ability to navigate the business based upon the reality of the current situation. For example, if the current capital state of the business would support its strategic expansion strategy, but the next item around the corner is the ICD-10 (healthcare coding) rollout, or EMR conversion, the CFO is key in articulating those conflicting scenarios to the leadership team, and begin framing up solutions. Plus, when you begin layering in investor relations on capital spend, customer reaction (if any) to technical changes, workflow considerations, and/or risk to core mission drift, the global scenarios can get fairly complex, not to mention dilutive.

Have you ever made a decision around office space, and what did you learn?

Find & maintain trusted advisors. In addition, do not underestimate the importance of a flexible landlord. There is a lot to gain and/or lose on both sides of the transaction. Outside of wages, space is one of the largest expense lines for many businesses. Space has the ability to be highly accretive to an organization (if properly configured), or highly dilutive. Therefore, we always worked with brokers who understood our space needs (purpose, duration, size, type of employment, daily routine, culture, etc), had an understanding of the rental market in a certain geographical area (closed recent transactions in the same area), and was willing to invest the appropriate amount of time into our organization to find us the ideal location.

What advice would you have for the founder considering their first office lease?

Read the lease yourself, plus ask a trusted associate/friend to read it as well. If you both came away with the same understanding of the key terms (duration, monthly/yearly cost, improvement allowance, ability to sublet, forced relocation, renewal, guarantee, etc), then it’s likely that you have a proper understanding of the terms & conditions. Also, consider office sharing arrangements, they can be cheap and flexible and can tide you over until you know exactly what it is that you’re looking for.

Bootstrapping a startup is challenging, so if you believe the accretive nature of a properly configured space is critical, then its possible that a long lease duration may be one of the only methods available to achieve the buildout you’re looking for (with high tenant improvement allowances). Thus, ‘out’ or risk mitigation clauses become important, like the unfettered ability to sublet.

What do you enjoy doing with your time outside of the office?

One of my challenges has (and still is) an appropriate work/life balance. Because of that, I’ve become a big believer in the concept of capacity – we only have a certain amount of capacity to take in energy-zapping activities. Once that capacity is tapped, our performance can suffer. Time with my wife and 3 little girls (one of them is one the way) fills me back up! Whether it’s going on an adventure in Patagonia with my wife, or a different kind of adventure in Disney with the whole clan, or going on a run in a fresh coat of snow, those are the activities that I enjoy doing outside the office.

What advice would you have for someone in finance who wants to become a CFO?

First things first, mentors are a great way to get your feet wet. But generally, I think it’s important to think big but stay grounded in reality, and work on leading people around the financial corner that’s about to come. Also, don’t underestimate how important the relationships are around you (especially with your team), take the time to foster those relationships and listen to what they are telling you. A few years ago I heard the saying, “the conversation is the relationship,” and it has stayed with me ever since. I totally agree.

How do you effectively manage expectations to help everyone in the company know what their priorities should be?

This is always a challenge. Expectation management is always present, and in most cases, a major part of the position. CFO’s have a direct responsibility to their team members, the other executive leaders, and the board of directors. First and foremost, my responsibility and concern is for my team members – we’re in it together. Having that rock solid relationship allows all of us to be honest with one another, and align expectations appropriately.

In terms of managing the expectations of the broader organization, in my experience, I have had success managing the expectations of the leadership team first. In many instances, the CFO is one of the only leaders with the ability to effectively have this conversation – given the line of sight that we have inside the business. Once the leadership team is in alignment, the unified group can rally around the most appropriate way to align the expectations of the organization. Getting everyone in the organization to move in the same direction can be a challenge, I personally believe that clear & sincere conversations based on strong relationships can help move the organization in the right direction.

What is one question you want to ask of your tech CFO peers?

What’s the primary characteristic that makes you successful in your position, and if that’s changed in the last 10 years, how has it changed?

Is there anything else you would like to add?

In my opinion, to be a modern-day CFO with global vision, relationships will be key. By leveraging these relationships, in combination with deploying a very broad skill set (see above), we are positioning ourselves to bring outsized value to the organization, our team members, co-workers, investors, the marketplace and ourselves.

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