The following is a Holiday Replay of a popular 2022 episode.
Last October, shortly after being named CFO of machine learning start-up MOLOCO, Brandon Maultasch decided to forgo yet another welcome coffee to instead engage with a wide flock of MOLOCO employees on the virtues of discounted cash analysis.
“The last thing you want a new people leader talking to the entire company about!,” confesses Maultasch, before launching a stirring defense of the fall discussion that he refers to as a “teach-in.”
“We have 65 data scientists and machine learning engineers at the company. If they can build the things that they build, they are smart enough to understand finance, which isn’t all that complicated,” remarks Maultasch, whose approach is notable as much for what it does focus on as for what it doesn’t.
By exploring a framework for discounted cash analysis, Maultasch rejected the more traditional point of engagement for incoming CFOs: the company’s future IPO.
“The IPO is an important milestone, but it’s not the destination,” notes Maultasch. “The destination is building a generationally important company that adds value in the long run. I wanted to make people understand that the durability of cash flows is what drives long-term value creation.”
Once armed with a deeper understanding of discounted cash flows, Maultasch says, employees at large can bring forth more of the insights, processes, and technical solutions that are needed to move the levers of value creation.
“I want to line align our conversations around durability and long-term margins. These are the levers that move our revenue, move our profitability, and move our position in the value chain,” he adds.
According to Maultasch, an added benefit from “teach-in” discussions is that they sometimes expose what the finance team has gotten wrong.
“Some of the things that we thought were inputs turn out to be outputs,” he observes, “so it’s this process of discussion, argument, and learning that aligns everyone toward building a great company.” –Jack Sweeney
