Tech CFO Spotlight: Mike Ellis, Flywire

When tech companies grow, they can grow fast. Lots of money out, lots of money in.

That creates both challenges and opportunities for the one tasked with keeping these businesses financially healthy—the Tech CFO.

We wanted to spotlight some of these executives to get their takes on the role of CFO, as well as the unique challenges the world has thrown their way this year. Who better to start with than Flywire’s own Mike Ellis.

Tell us about yourself and your career path to this point.

Sure. I was classically trained as a public accountant. I spent about 10 years in public accounting, seven of which was with PricewaterhouseCoopers.

The last two, I predominantly worked in their mergers and acquisitions group, which was basically working for private equity and venture capital firms in evaluating acquisition candidates. I found that to be exceptionally rewarding work. It was less about being prescriptive with a client and more about working with them to figure out the best outcome for the business, which I really enjoyed.

After that, I went to a dot-com start-up as their first finance professional as VP of Finance. That was my first role with a private company.

From there, I've basically been in FinTech ever since, with three CFO roles. First with Eze Castle Software, which provides trade-order management software solutions to institutional investors. Then with CashStar, which delivers digital gift cards and gifting services to the largest retailers in the world. And most recently, of course, with Flywire for the last five years.

Tell us about your decision to join Flywire. What drew you to this role?

There were a lot of things that drove me to Flywire.

First and foremost, it’s a FinTech business, and I felt really comfortable with that. I was also drawn to the expansiveness of the CFO position at the time, based on the company’s relative size. So being able to oversee and work with the legal team, the people and culture team, overseeing the operations of the business—those were all really important aspects in my decision to come over to Flywire.

But, ultimately, it comes down to the people that you get to work with every single day. It’s really about figuring out your own weaknesses and the strengths of those who would be around you. If you can put yourself around people for 40-60 hours a week, where you’re going to be learning from their experiences and skills to make yourself a better person, you can’t ask for much more than that. And that was the type of opportunity I had at Flywire.

If you can put yourself around people for 40-60 hours a week, where you’re going to be learning from their experiences and skills to make yourself a better person, you can’t ask for much more than that.

In your experience, what makes a great CFO?

First, you have to be proficient in your finance & accounting skills. You can't be a great CFO unless you can do the necessary tasks including issuing financial results in a timely manner, having excellent board relationships, and being able to talk about your business both externally and internally.

After you get through all of the blocking and tackling, the thing that really separates great CFOs from good CFOs is the ability to understand how their product is actually used in the market, and using that skill to leverage it to the strategy of the business.

A great CFO gets leveraged and pulled into the more strategic discussions that the CEO has. And if you don't know the product, and if you don't know how the product intersects with its clients, you really can't be a voice that helps the business move forward. It doesn't mean you can't speak about the past, it doesn't mean that you can't tell investors how good the business is. But your voice won't be as great as it could be if you know what the market is looking for, what your clients are looking for, and what the company delivers, in a very detailed way.

A great CFO gets leveraged and pulled into the more strategic discussions that the CEO has. And if you don't know the product, and if you don't know how the product intersects with its clients, you really can't be a voice that helps the business move forward.

How do you approach the business response to a crisis, like the current pandemic?

Well, we just talked about a great CFO being one that understands the business and the market really well, and that factors heavily here.

The fact is that COVID has created such a level of uncertainty that you really have to get back to basics. That means understanding what your capital position looks like today, and how much running room you actually have under a post-COVID model.

So what we look at is, under multiple different outcomes, how are we going to perform? And what do we need to do right now to protect shareholder value? Ultimately, that’s the role of the CFO—protecting shareholder value, or constituent value. A constituent can be an employee, a vendor, a partner, a customer, or an investor. So you have to have all of those people in mind as you’re thinking about how to operate your business.

After you get back to the basics of the business and the modeling under different scenarios, you can then evaluate the drivers of the business. From there, collaborating with other business stakeholders is critical in understanding which business drivers to pressure test and which business risks we should take to move the business forward. To some degree, it comes down to a few educated guesses, because there’s just so much we still don’t know about how COVID will play out.

When you determine that cuts are needed, how do you go about making those hard decisions?

CFOs are looking at every single line item within the P&L. Every cost is on the table whether it’s people, facilities, insurance or software. You have to go line by line and you have to do it with a team.

With respect to the harder decisions around people, you have to strike the right balance between a collaborative effort and “on a need to know” basis. You can’t do it in a vacuum, because you will undoubtedly make mistakes either due to your own blind spots or not having enough functional diversity around the table to consider and evaluate all of the business risks.

As an example, the CFO may suggest that we have excess capacity within the product function, but may not have all of the salient details about what the product team is being tasked to deliver. The sales leader may need to step in to say,“No, no, wait a minute. I’ve got eight things that I’m waiting on from the product team, and I don’t have them yet. They are not overstaffed.”

You have to have that give and take as it relates to the decision, and that's how you get to compromise.

The CFO office has to be the truth channel, it has to be the one that brings us all back to reality.

How do you approach fostering your relationship with your CEO and other executives?

In my view, the key to developing good relationships in business is to over-communicate as opposed to under-communicating, and sometimes that's hard.

The CFO office has to be the truth channel, it has to be the one that brings us all back to reality. A mentor of mine used the phrase, “Facts are our friends” often, and I have really gravitated to that approach as a leader of the finance function. There have been a few times in my career where I have seen a level of “irrational exuberance” which sometimes can blur decisioning. It’s important to be the one who maintains focus, and is grounded on where you're trying to drive the business. Unfortunately, we all sometimes get caught up in the highs and lows of business performance, but we shouldn’t let these emotions get in the way of facts.

I try to stay calm in demeanor, whether delivering good news or bad news, and allow others in the room (could be the CEO or CMO or CRO) to be the cheerleader. I allow the other executives in those verticals or other departments that are driving the business forward to be those cheerleaders. The CFO should be very clear, concise and accurate and I think that's how you develop trust.

If you don't have trust, the CEO is not going to come to you with problems, and then you lose those opportunities to help improve the business.

If you don't have trust, the CEO is not going to come to you with problems, and then you lose those opportunities to help improve the business.

Final question. If you weren’t a CFO, and could do anything, what would your dream job be?

I think I would have liked to have been a teacher and coach. I really enjoy teaching and coaching people in areas where I have obtained some firsthand, hard fought knowledge. I find it incredibly rewarding when you’re teaching or coaching and you get to see the excitement when the student or player is successful, and knowing you played a small part in that success.

For Tech CFOs like Mike Ellis, reducing costs and simplifying processes is the key to success. Learn more about how Flywire helps software and technology companies lower costs and solve global receivables.