The Weekend CFOs Couldn’t Reach Their Cash

0:00Support for CFO Thought Leader comes from OneStream, Trusted Data, Faster Decisions, and Salesforce. Explore new research on the future of finance and AI at Salesforce.com slash CFO Report. Hello, this is Amy Wang, CFO of Procurify, and you are listening to the CFO Thought Leadership Podcast. Special episode.

0:32On March 8th of 2023, which for those of you who are CFOs, that was the Thursday, and SVB closed its doors on Friday morning and didn't let any more payments out. And so as I'm sitting in a room, the JP Morgan to my right and Hercules Capital to my left, my treasurer and I were moving our funds out of SVB in real time in that meeting. And I'll just remember that experience as being, I cannot believe that this is where I'm sitting. And I'm doing this activity while, you know, the bank that, you know, frankly, was the pinnacle of banks for the tech community for so, so, so long was going through this experience.

1:16And none of us knew what was going to happen the next day. I was going to Palm Springs for the tennis tournament down there and like literally getting on the plane and landing and the whole thing sort of blowing up, being holed up in the hotel room for days. And then, yeah, once banks opened up again on Monday, figuring out how it was going to play out. And then ultimately, within a few days after that, we sort of knew how it was going to shake out. I mean, just to kind of set the context, I was only pretty new to the role. I'd been in the finance seat for six months at this point. And that was a pretty remarkable event that hadn't really occurred in some time.

2:01And I think from that perspective, it caught a lot of people unawares. And also, it was something that I just, upon remembering, was just it accelerated so rapidly from like the beginning of the week to the end of the week and then the weekend thereafter. We actually started that year with myself and my finance director asking the question of, should we diversify our banking relationships? Is this a place of outsized risk? And we talked about it. We discussed it with the CEO. And we were all kind of like, we'll eat the risk. It'll be okay. We'll figure it out. And let's table this discussion and then raise it again in six months.

2:42Of course, three months later, SBB melts down and we have to scramble along with all the other companies. And there was a note that came out. It was a tweet about a week and a half to two weeks prior to, you know, things hitting the fan with Silicon Valley Bank. And I remember going to our board and saying, listen, I don't know if this is real or not. I have no idea. But in order to be safe, I'm going to move a chunk of our money out of Silicon Valley Bank and move it over to JP Morgan just to be safe. and I'll move it back if nothing happens.

3:32There are moments that permanently change the way finance leaders think about risk. For many CFOs, one of those moments came over a single weekend in March of 2023. This isn't the story of Silicon Valley Bank. It's the story of what happens when finance leaders suddenly aren't certain they can reach their company's cash. Payroll still has to be met. Vendors still have to be paid. Customers still expect the business to operate. And decisions that normally unfold over weeks suddenly have to be made in hours. Today you'll hear from several CFOs who lived through that weekend. Each experienced it differently.

4:24Some scrambled to secure liquidity. Some rethought treasury strategy. Some discovered their contingency plans weren't as complete as they believed. And others emerged convinced that finance leadership isn't just about growing a business. It's about making sure the business can survive long enough to grow. Our episode begins after this. What is a forward finance organization? Finance leaders are under pressure to move faster, adopt AI, and guide decisions across the business. But here's what most people miss. AI doesn't create value on its own. You need the right operating model behind it. That's what Ford Finance is.

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6:16That's onestream.com slash forwardfinance. Welcome back. The weekend CFOs couldn't reach their cash isn't really about one bank. It's about what finance leaders do when one of their most basic assumptions that cash will be there when they need it is suddenly thrown into doubt. Our first perspective comes from Sarah Spoya, CFO of Tipalti, who found herself navigating exactly that moment.

6:56Boy, give us some background. How did things happen? Yeah, this spring, actually. So I think we announced it in May, and then we closed around in March. So yes,$150 million of debt raise. Part of it is a revolver. Part of it is more of a traditional term loan. And maybe the question is, you know, what a time to raise money, I guess. I'll tell you the one anecdote from this experience is that I was sitting in the room negotiating the final terms of this contract. We had our lawyers here, one set of participants on one side of me, the other set of participants on the other side of me on March 8th of 2023, 23, which for those of you who are CFOs, that was the Thursday, and SVB closed its doors on Friday morning and didn't let any more payments out.

7:54And so as I'm sitting in a room with major, major stakeholders in the debt community, JP Morgan to my right and Hercules Capital to my left, my treasurer and I were moving our funds out of SVB in real time in that meeting. And I'll just remember that experience as being, I cannot believe that this is where I'm sitting and I'm doing this activity while, you know, the bank that, you know, frankly, was the pinnacle of banks for the tech community for so, so, so long was going through this experience and none of us knew what was going to happen the next day. And so, you know, it was obviously a very, to get through that debt raise under that, you know, recency of the news and to like, you know, sign the contracts just a few weeks later and get it completed was a testament to the partnership, frankly, with those two parties that we had built over many months, that we had already gotten through all the tough conversations, all of the, you know, difficult diligence that we had built mutual trust, like and respect with each other.

9:01throughout that process, that something as big as a global banking crisis that then brought down other banks with it would not have gotten in the way of us closing that transaction. But it was just the thing that really, for us, strengthened the balance sheet. So in this sort of uncertain macro environment, we could keep doing what we're doing and not worry about it. But certainly when we started that process in December, January of the prior, I certainly didn't think uncertain macro environment would include multiple bank failures. So it was quite an experience. I will always know where I was sitting when I got the first wins that SUV was going to be in trouble.

9:43Again, I think there's a very small sliver of the population that will think about where they were when they heard that SUV was collapsing, right? And maybe that's just the people I hang out with, unfortunately, which might tell you something about my friend group, I guess. But, you know, I think it's a moment that a lot of folks in the finance space, whether it's, you know, bankers, institutional investors, you know, VCs, you know, finance professionals will remember, particularly if they were in tech, because we all have a story of, you know, a company that we were that we were a part of, or that we were on the board of, or something that where SVB really came to, to help them and really came to be, you know, part of a positive part of their journey.

10:25And so I think for all of us, there's the first point is, okay, well, I need to protect my company. And to protect my company means I need to do X, Y, and Z. I need to do X, Y, and Z as quickly as possible before cutoffs, before wire cutoffs. But then the back of our head is, I really hope this isn't going where it looks like it's going. And so I think that's sort of a shared concern that we all had on that day. Now, as far as doing the round, you know, it didn't change the answer for us to the round. Certainly, I think just anytime there's some disruption or uncertainty in markets, like people can get, you know, cold feet.

11:01And so it was just a lot of checking in with everyone, making sure credit committees hadn't changed their mind, just weren't just sort of stalling or anything like that, just because of the environment. And thankfully, again, I think had we not built up the trust, respect, the like, you know, kind of shared alignment and gotten through all of the tougher diligence conversations, then maybe the results would have been different. But, you know, it was a great group we work with. I can't I can't commend the folks from Jake Morgan and Hercules anymore. And, you know, I've built some great friendships, too, with with that group.

11:34And I think those two firms are really stepping in to help out in some of the void that has been created around some of the other bank closures.

11:48For CFO Sarah Spoya, the challenge was protecting her own company's access to cash. But what if your company suddenly found itself helping thousands of other businesses navigate the very same uncertainty? That's the perspective Ben Gamal shared with us while serving as CFO of Brex. Ben has since become the company's president, but his recollection of that extraordinary weekend offers a unique view of how quickly finance leaders had to respond.

12:30yeah for me uh personally but also for brecks i'd be remiss not to highlight you know how brecks showed up in the the wake of the svb collapse uh back in 2023 i mean just to kind of set the context i was only pretty new to the role i'd been in the finance seat for six months at this point and that was a pretty remarkable event that hadn't really occurred in in some time and i think from that perspective it caught a lot of people uh unawares and also it was something that i just upon remembering was just it accelerated so rapidly from like the beginning of the week to the end of the week and then the weekend thereafter and one of the things that i really appreciate about that as a strategic sort of finance moment for brex was not only was there the dynamic of okay well how is brex set up to be able to weather this by virtue of like do we have our capital with the right partners in the right format so that we can continue to serve our customers.

13:25But then also given the fact that we are big proponents of supporting the startup ecosystem, how are our customers potentially impacted if they have funds otherwise locked up at SVP while they're working through what does this look like from an administration perspective? And so I think I remember with some sort of fondness that the company overall, and as a thousand person organization, really rallied around, okay what is the product we can launch to help customers meet payroll next week if their funds are trapped at SVB and that product didn't exist at Brex or even generally in the market we had to devise the product go to lenders raise a billion in capital in terms of commitments so that we could go out and give our sort of customers certainty around being able to be there in the case that they weren't able to get access to their funds from SVB ultimately they didn't need our products because they were able to get access to funds which was the best outcome for everyone.

14:19But what I thought that that really highlighted for me as a moment was finance can have this, especially at fintech, but finance can have this outsized impact in terms of thinking through how can you show up for your customers, especially in times of need? What are the capacities that you may have, especially as a larger organization, to get access to capital, thinking through helping your customers when, especially as a smaller company, you may not know sort of what to do or how to approach those types of challenges. And so I was really happy with both how Breck showed up, but also finance team specifically.

14:54Ben Gamble's experience showed how quickly companies had to respond as the crisis unfolded. Our next guest reflects on what finance leaders learned after the dust began to settle. Larry Roseman, CFO of Thumbtack, built his career across public accounting, investment banking, and operating finance with leadership roles at eBay before joining Thumbtack. Having lived through multiple market disruptions, Larry explains why the weekend wasn't simply a baking crisis. It became a turning point in how many CFOs thought about liquidity, capital allocation, and profitable growth.

15:46The saying never let a good crisis go to waste. You know, the SVB, First Republic Banking kind of crisis that occurred a couple of years ago. I was going to Palm Springs for the tennis tournament down there and like literally getting on the plane and landing and the whole thing sort of blowing up, being holed up in the hotel room for days. and then once banks opened up again on Monday, figuring out how it was going to play out. And then ultimately within a few days after that, we sort of knew how it was going to shake out. From a sort of operating perspective, we had the ability to split up our operating cash so that if there ever was another crisis like this, we had multiple places where we can draw funds.

16:39We revisited our covenants and made sure that that wasn't going to put us at risk. We revisited our investment policy to make sure that we were sweeping cash in a way that enabled us to prevent this from happening. I will say that using that experience within my organization and in some regard, I think our industry really enabled us to focus again, and I think rightly, on profitable growth. this was a a moment in time when all of a sudden now ceos and business people uh realized okay we we need to we need to understand how to how to focus on on the full prenum it's not all about revenue it's about generating profitable growth and you know i think the pendulum swung really far uh you know coming out of that crisis and i think it's sort of swung now to a place that's healthy, which is, sure, growth, I think, is still worth more than a point of profitability, but it's not out of whack, right?

17:49You still have to invest. You have to invest profitably, but ultimately, you have to generate on free cash flow. It was a complete mindset shift that I think ultimately will enable us and others to create a lot of value. Coming out of that, I think lots of companies cut costs. So you really started to think about being even more disciplined about current investment levels. And then we were a customer. We had all of our cash at SVB. and it's sort of not germane to the outcome, but there was a time there where we thought we were going to lose all of our cash. And there was some tense days during that crisis when looking to sort of move money out of the bank and ensuring that you can make payroll.

18:51And we were, yeah, it was a high stakes, high-pressure situation that ultimately resolved itself appropriately. We had money that was not at the bank, that was in custodial accounts, that was safe the whole time, even though we didn't know that. So that was the catalyst for us sort of saying, okay, this is a new time, we're entering a new sort of chapter, and how do we think about profitable growth?

19:26Larry Roseman reminds us that the Silicon Valley bank crisis permanently changed the way many CFOs think about liquidity and treasury management. But what if you had already identified the risk and simply hadn't expected events to unfold so quickly? That's the perspective Stacey Tamarkin shared with us while serving as CFO of CubeCost. Today she's Chief Operating Officer of Oregon Public Broadcasting Her story is a candid reminder that even thoughtful contingency planning can be overtaken by events

20:15as a finance leader in 2023 um we were a little bit busy um dealing with the fallout from the svb meltdown um we happened to be fully concentrated in svb at the time and so that was another interesting journey that we had to take and another challenge to survive and get through. We actually started that year with myself and my finance director asking the question of, should we diversify our banking relationships? Is this a place of outsized risk? And we talked about it. We discussed it with the CEO and we were all kind of like, we'll eat the risk. It'll be okay. We'll figure it out. And let's table this discussion and then raise it again in six months.

21:06Of course, three months later, SVB melts down and we have to scramble along with all the other companies. I don't think that we ever saw that we were truly at risk of losing the business. It was more just the challenge of finding sources of short-term funding in case our main funding was frozen for an extended period of time. We needed to make payroll. I can't say that if I had it to do over again, I would make a different decision. And I don't think the business would have made a different decision. And I think that's one of the unique things about finance leadership at a startup is it just comes with the need to have a slightly higher risk tolerance.

21:50And are these black swan events going to happen from time to time? Absolutely. But the key is really maintaining a mindset of flexibility and adaptability and learning to deal with it as it comes versus trying to address every risk all at once because there's just not time and resources to go after everything.

22:17AI is changing the finance function, but how much business value is it actually delivering? According to new research from Salesforce, 90 % of finance leaders using AI report a positive return on investment. And as AI agents enter the picture, finance leaders are seeing opportunities to improve productivity, reduce costs, and strengthen forecasting. But there's another side to the story. CFOs are also confronting growing revenue complexity with more subscription, consumption-based, and hybrid business models to manage. And that raises an important question. How can finance leaders gain the visibility they need to make better decisions while putting AI to work?

23:07Salesforce explores these challenges and the opportunities ahead in its latest CFO research. Discover what finance leaders are saying about AI, revenue complexity, and the evolving CFO role. Visit salesforce.com slash CFO report. That's salesforce.com slash CFO report. Stacey Tamarkin's experience is a reminder that Even when finance leaders recognize a risk Events can move faster than expected Our final perspective comes from Dan Murphy CFO of Commerce Tools Today, Dan continues his finance leadership journey After building a career that spans public accounting Data and information businesses Public company finance and multiple software CFO roles.

24:00Along the way, he learned to embrace change rather than fear it. A mindset that shaped one simple treasury practice that proved invaluable when uncertainty arrived.

24:18We were banked at Silicon Valley Bank and I've always, always had at least two relationships from a banking perspective. I actually like three. I don't care how big a company I am, but I always like to have at least two, if not three. And so when I got to Uncork, we had one, it was Silicon Valley Bank and decided to actually put another one in place with JP Morgan, which was important. And, you know, those things started to move if you were just paying attention. And I always have, you know, alerts and I'm always looking for things around key vendors of mine, including my banks. And there was a note that came out.

24:57It was a tweet about a week and a half to two weeks prior to, you know, things hitting the fan with Silicon Valley Bank. And I remember going to our board and saying, listen, I don't know if this is real or not. I have no idea. But in order to be safe, I'm going to move a chunk of our money out of Silicon Valley Bank and move it over to JP Morgan just to be safe. And I'll move it back if nothing happens. Board was okay. We moved that money. And I'm sure you have plenty of stories about this, but when that weekend hit, I mentor quite a few CFOs and having discussions with them. One thing that I should have done a better job, just always have two bank accounts.

25:37They were stuck with one. It was Silicon Valley Bank. They were concerned about what they were going to do, where they can move their money. So to me, just kind of having that basis, really, really important.

25:50Looking back, it's easy to focus on the event itself. But that's not what these finance leaders remember. They remember the uncertainty. They remember the decisions that couldn't wait. And they remember the realization that treasury management isn't simply about maximizing returns. It's about preserving options when the unexpected arrives. Each of these leaders came away with a different lesson. Together, they remind us that resilience isn't built during a crisis it's built long before the crisis begins

26:31for cfo thought leader thank you for listening

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27:21Thank you.