Prospective finance chiefs for tech startups have some special considerations to weigh before they sign on the dotted line.
For Remo Canessa, the new CFO of Illumio Inc., a computer security company, these included not only the prospects for the company’s flagship product, but also its customer base and roster of venture capitalist and other financial backers.
Mr. Canessa became CFO of Infoblox Inc., a network services company, in October 2004, and helped take it public eight years later. He told the company in September 2015 that he planned to step down when a successor was installed and up to speed. Mr. Canessa left in April and began to consider his next move.
He said he weighed a dozen or so opportunities, from startups to established public companies. Mr. Canessa said he was looking for “a company that I felt could be a generational-type company,” preferably in computer networking and security.
Specifically Mr. Canessa was eager to play to his managerial strengths. “My core competency is to build,” he said.
When what was supposed to be a short meeting with Illumio founder and chief executive Andrew Rubin at a local Starbucks turned into a two-hour conversation, Mr. Canessa realized he had found where he wanted to be. Now his mission at Illumio is “putting together an operational model for the next five years,” he said.
Mr. Canessa said he was impressed by the company’s flagship product, the Illumio Adaptive Security Platform, which he said is similar to a magnetic resonance imaging system that can map companies’ data centers and cloud traffic to lower cyber risk.
His decision was informed by Illumio’s roster of prominent venture capital backers, which include Andreessen Horowitz, General Catalyst Partners and Accel Partners. John Thompson, Microsoft Corp. chairman, Marc Benioff, Salesforce.com Inc. CEO and Jerry Yang, Yahoo Inc. co-founder, are also investors.
He said he was also impressed by its customer base, which include a major New York-based investment bank as well as large software and cloud-computing companies.
Illumio, Mr. Canessa said, isn’t under pressure from the investors to take the company public in the near future, but that is an option down the road. “When it’s the right time, it’s something we’ll consider,” he said.
Mr. Canessa said he weighed the advantages of being a private company CFO over being with a public company.
“When you’re with a public company, you’re under the eye” of investors and regulators at all times, he said. In fact, “every decision you make” is open to public scrutiny.
One drawback of a smaller, closely-held companies, is that they often don’t provide the lush executive compensation packages of larger, publicly-traded rivals. However, Mr. Canessa said money didn’t factor much into his decision, even though he said he made “significantly more” money at Infoblox than he now makes.
“I’m not money driven,” he says. “I’ve never asked for a raise in my career.”
The wealth of job opportunities Mr. Canessa faced is not atypical for CFOs with the right experience, and who want to get involved with a fledgling company.
CFOs with the right pedigree, especially ones who have taken a company public, are stalked by headhunters. A finance chief is often one of the last major hires a company makes before going public. Startups usually focus first on developing their product, then on sales and marketing.
Article originally published on WSJ.com by Maxwell Murphy on Jul 22, 2016 3:05 pm ET: For New Illumio CFO, A Startup Position Fit the Bill