Financial Decision-Making Frameworks for High-Growth Businesses

February 28, 2023 Mimi Torrington

executives discussing new financial decision-making frameworks

Finance leaders often face a unique set of challenges when it comes to managing risk and making informed financial decisions in high-growth businesses. With the potential for rapid expansion, they must be able to identify the winning strategies to maximize their chances of success. To learn the art of effective risk management, financial decision-making frameworks, and informed financial decisions, we invited Emil Vasilev.

Emil is the VP of Finance at Hero, a digital in-home healthcare company that helps members manage their daily medication needs. Prior to that, he held several financial roles at companies such as Total Brain,, Corsair, and Barclays Capital. Emil also sits on the board of SKY Schools USA and is a meditation instructor for The Art of Living.

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Welcome back to CFO Weekly, where we're talking with financial leaders about how to build efficiency in their teams, create time for strategy, and ultimately get results. With your host, Megan Meese, let's jump right in.

Megan - 00:00:31: Today, my guest is Emil Vasilev. Emil is the Vice President of Finance at Hero Health, a digital, in-home healthcare company that helps members manage their daily medication needs. Emil joined Hero Health from Total Brain, a neuroscience-based mental health company where he oversaw all financial and investor relations aspects of the business. Prior to that, Emil held several roles in private equity and investment banking, including at Corsair Capital, a global growth and private equity firm with $12 billion in assets under management, where he invested in financial and technology businesses in the US, Europe, and Asia. Emil sits on the board of SKY Schools, a premier social-emotional learning program that has impacted 111,000 plus students, educators, and parents from 212 schools across the US. He is also a meditation instructor for the Art of Living Foundation, a UN Educational NGO with a presence in more than 155 countries focused on health, sustainable development, conflict resolution, and disaster relief. Emil has a BA in Economics from Amherst College.

Megan - 00:01:43: Emil, thank you very much for being my guest today.

Emil - 00:01:46: It's my pleasure, Megan. Thanks for having me.

Megan - 00:01:48: Yeah. You're a finance executive, an advisor, and an angel investor with a history of working across Bcbacked and public companies, private equity, and growth, investing M and A, and investment banking. And today we'll be discussing your story and learning from the experiences you've gained along the way. And I'm excited to hear from you.

- 00:02:09: So let's get started.

Emil - 00:02:10: Let's do it.

Megan - 00:02:11: All right, first and as always, let's start with you, your story, and how it is that you got to where you are today.

Emil - 00:02:19: Wow. That could be a one-hour-long answer or a five-minute one, but I'll give you the cliff notes. Originally, I'm from Bulgaria. I grew up there and came to the US for university. Was lucky enough to get a full ride at a place called Amherst College up in Massachusetts and ended up in New York working on Wall Street after school. Did investment banking at Barclays, focusing on the financial services sector, and then did private equity for a couple of years. Ended up saying no to Wharton for an MBA. My family, my mother in particular, was literally crying on the phone when I told her that. And at that point, I decided to pursue operating roles in mostly in tech startups. So I've been doing that ever since over the last six, seven years.

Megan - 00:03:30: I'm just curious, why did you say no to Wharton? That's a big decision.

Emil - 00:03:35: Yeah, it was one of those things where deep inside, I knew business school was not the best path for me. And I was just more excited about being an operator and actually learning how to build a business from the ground up. And there was an opportunity that came up at the time to work with a friend of a friend at a portfolio company of TPG Growth. So that was my transition from pure finance into more of an operating role. And yeah, life kind of happens at that point.

Megan - 00:04:20: Yeah. So as you look back on your career, are there stories or career moves that stand out in your mind as being a turning point for you?

Emil - 00:04:30: It's a good question. I think that was certainly that whole experience was a turning point because a lot of us in finance, especially after a couple of years, is on a certain track or trajectory where it's really hard to pivot because the terms, the money that we make and the economic terms are positive, and it's hard to just say no or pivot somewhere else where there's more risk. The golden handcuffs. At that point in my life, I just felt like I just had that feeling that I had to pursue something else. And if I were aligned with what I'm actually interested in, the success and the material comfort will come.

Megan - 00:05:32: And today you're the VP at Hero. Is that correct?

Emil - 00:05:38: Yeah, that's right.

Megan - 00:05:39: So can you tell us a little bit about your role at Hero?

Emil - 00:05:43: Sure. So my role there is to oversee all aspects of finance and accounting and fundraising and investor relations. The company is in digital health, more specifically in remote monitoring and medication management. And so we have about 150 people in the US. And then in Europe as well, and in Asia, some people there. And yeah, the focus is on helping people who take five plus medications to help with their adherence and help their caregivers and doctors be in the loop on what's happening.

Megan - 00:06:42: That's a very big need these days, I'm sure, and probably growing by the day.

Emil - 00:06:48: Yes, absolutely. We recently became eligible for Medicare, and the whole product did. So that opened a lot of doors for us to really access in a very direct way the people who need this the most.

Megan - 00:07:06: And what attracted you to this role at this company?

Emil - 00:07:12: Well, I think it was a combination of different factors. I had been in health care prior. I was at a mental health company before this, and I had friends in common with the founder, CEO who reached out, and I liked the fact that they were relatively early stage when I joined, so there was a lot of opportunity to contribute, to shape the actual company and also benefit from an upside. So all these factors together, and importantly, I think the people looking back when I was interviewing, what stood out to me here was that the people were both competent, who I talked to as well as humble, and that's a rare combination. Truly, that is what kind of sealed the deal for me.

Megan - 00:08:18: And talk to us about your framework for effectively managing risk and making informed financial decisions.

Emil - 00:08:26: Yeah. So this varies by the stage of development of a business. In the case of Hero and then other companies I've worked with, sort of between Seed and call It Series C stage of growth. From a financial perspective, there are a few critical components to risk management. One is obviously cash burn and runway, which finance professionals were directly responsible for. Another is operational efficiency. And that supports the burden in some ways, but also it ensures that operationally, the business can keep up with whatever top-line growth it's experiencing or can even enable more top-line growth. So that's the second layer. And the third is just pure call It growth finance. So how do you, in a nimble manner, mold the finance function and all of its aspects, including accounting, fundraising, FP&A model, et cetera, to fit the needs of a high growth company where within three to six months you could have doubled in size from a revenue perspective or employee count. And how do you kind of keep up with that? So those three aspects I would say are most important.

Megan - 00:10:18: And how do you balance the risk that must be necessary for a start-up environment with the controls that are necessary for finance to succeed?

Emil - 00:10:31: Yeah, I think an example, a very direct example of that is companies, when they reach call it 10 million of ERR, depending on the circumstances, of course, may require an audit of financial audits. Right. An audited account. So through that process, which I've gone through a number of times, what I have found is that, yes, of course, it's great to establish all the proper checks and balances. And that's a requirement. And you do that and at the same time, you have to be commercial about your outlook and what that means. What I mean by that is that administratively excelling at everything is not necessarily the best use of a business's resources and your own time and your team's time. So I wouldn't say doing the bare minimum because that may not sort of hold when something changes. But doing sufficient administrators from an administrative perspective, doing a sufficient amount, and kind of leaving some room for improvement for the quarters and years to come is one outlook that I find valuable for a growing company especially.

Megan - 00:12:09: That's great advice. So can you talk to us about the role of self-reflection and continuous improvement in your framework for peak performance?

Emil - 00:12:19: Sure. So in my personal life, and maybe, I'm sure, actually, a lot of us can relate to that, especially in finance, where we're sort of go, go, go all the time and we're extra competitive and we want to win. What happens is, yes, we can achieve things sometimes very quickly, sometimes slowly, over time, slower than we want it. But in the process of this achievement, what happens is there's a hidden task tax. And that hidden tax is usually on our health, whether that's physical health or mental health. And you could include relationships and family in that bucket of mental health. And we pay that as individuals, as people. The company doesn't pay that. The company benefits. Shareholders benefit from our hard work, which is great. We get paid for it. There's an exchange. But this is an externality, a negative externality that we as individuals incur, and we're the only ones that are actually able to police that and to set proper boundaries and also to set ourselves up for health rather than disease or lack of health. So at a high level in my personal life. And this came up for me in a big way when I was just starting out in investment banking when I was an analyst where working until 01:00 a.m every day and then being in my early 20s partying in New York City on the weekends between those two things that were just burnt out after a year or two of doing that. And I felt like something else had to happen in my life for me to actually continue to live a happy, productive life. And that's when I turned my attention to mind-body practices, breath work, and meditation especially, and also started watching certain aspects of my routine. And I'm happy to get more into that. There are a few different things that I watch out for, but yeah.

Megan - 00:15:06: I saw that you're a meditation teacher.

Emil - 00:15:08: Yes, I am.

Megan - 00:15:10: So, yeah. What is it that we should be watching out for? I'm interested to know.

Emil - 00:15:16: Yeah. So there are different sources of our energy on a daily basis. Right. And the reason why it's important to look into that is that when we're low energy, we have all been there, we feel a certain way. We feel tired, exhausted, and dejected. Even if a small thing comes up, a small challenge, we just get completely thrown off. And it's like, wow, really? I have to deal with this right now. That's the attitude. Sounds familiar. No, exactly. And the flip side of that is, okay, we're high energy, enthusiastic, energized, even a big challenge when our energy is high seems very easy to overcome. The attitude may be like, oh, I have no idea how I'm going to do it, but I'll just go through it. I'll do it. There is some valor in there. Right. And so we've also experienced that. But in this day and age, with work from home and all the Zoom meetings, and all the things we all want to accomplish personally and professionally, we oftentimes end up in the exhausted bucket. And if that happens, continues to happen over a long period of time, we get burnt out and we experience quarter-life crisis, midlife crisis, et cetera, where we start to question our choices in a very fundamental way. And it's really not fun. Now, like, 30 or 40% of people in America, dealing in America have symptoms of depression. Right. That's not in my book. The sign of the most developed nation in the country. That's not the sign in the world. That's not a sign of true progress. So in a very practical way, what I encourage people to look at and what I look at myself on a daily basis is four things my sleep. And these are things we all know but sometimes we just completely forget. So sleep, right? The right amount of sleep. If we sleep too long, we feel groggy. If we sleep too little, we also feel groggy and irritable. So the right quantity of sleep I also find that going to bed before ten and sleeping through those hours of between 10:00 P.M. And 02:00 A.M. Is much more bang for my buck than even sleeping a long time, to the point where I have even experimented with. If I've had a lot of work and normally I would stay up until midnight or 01:00 A.M. to finish it, I would put my pen down at 9:30 10:00 and then wake up really early at like 03:00 or 230, and then finish it in the early hours of the morning. Obviously, that's an extreme thing, but that's just to show that those hours between ten and two, which in modern neuroscience is now also discovering that that's a very critical part of the night when the brain and the body recover. So that's more important than food and drink is the second, right? And we all know how we feel after a heavy lunch versus a lighter, more nutritious lunch at 230 P.M. When the crash happens or doesn't. So that's, I would say, the second sort of source, the main source of energy to watch out for. Then the third is the breath. This one is overlooked. And the technique that I do on a daily basis, and have been for ten years now, is taught by the Art of Living Foundation, a UN nonprofit. And that is a form of rhythmic breathing that is very effective. And it's cited by the recent bestseller, New York Times bestseller Breath as if not one of the most potent or powerful breathing techniques out there. So breath can be a very powerful source of energy and if we know how to harness it, in a matter of minutes, we can change our outlook, and shift our energy level. Right? And the last piece to this framework is what I would call a calm, collected state of mind. You could call it a meditative state of mind. And that can actually be a source of real tangible energy. An easy way to think about it is just to remember a time when you spent an hour sitting or listening to someone who is complaining to you and how you feel then. That's the worst, right? Yeah, it's very unpleasant. Your body may not have moved for a full hour, but you just feel drained and exhausted. Right? So this negativity can actually drain us and watch out for that and instead replace it with different things that can be uplifting, which we all do. Right? For some people, spending time with family is uplifting or reading a novel or listening to an inspiring lecture, or meditating. To me, that's sort of the most efficient way to get there. Because in the busy schedule, if I only have X amount of time for myself in the day, I know I can devote 20 minutes in the morning, 20 minutes in the afternoon, in the beginning, to start my day, and then in the end to kind of clear the slate before I can spend time with family and friends. I have found that that has just completely transformed the way I live.

Megan - 00:21:53: What about exercise?

Emil - 00:21:55: Yeah, totally. I would put that in the same bucket where the benefit goes both to the body as well as the mind. I think a lot of us nowadays, and I saw some recent stats around that, that the number one reason people exercise now is actually for mental health. So to take a break, to let go of stress, et cetera. So totally on point.

Megan - 00:22:21: Yeah. There's so much negativity in the world. You're right. Like, surrounding yourself with positive people and positive things is a big source of good energy. It seems like it's very easy these days to be bogged down by just everything that's around you. That's just so negative.

Emil - 00:22:42: Yeah.

Megan - 00:22:43: So how do you adapt and evolve your framework over time as a company is growing to stay relevant?

Emil - 00:22:52: Yeah, so I think from the point of view of a personal framework, so the things that we just mentioned, I think that's relevant regardless of workload, regardless of size. I think from the point of view of the actual to do as a finance professional in the day job that you have, there is different things to optimize for different stages of a business early on in the cycle. You have to establish the processes, set the right expectations, around budget, around expenses, really create a culture around it that in my experience, the best way to do it is just to create a culture of frugality from the get-go, where it's much easier not to spend money than to spend it and have to cut it later on. So I think that's one important aspect that naturally evolves over time as the company grows. But starting with that as a foundational piece can be very beneficial. And just treating the company's money as your own money. Right. Not everyone can do it. But assuming a few things, including ownership structure and options and just the overall cohesiveness of culture exists that is possible for people who are at the exact team level or anywhere in the company to really adopt. I think that ownership mentality is critical and is the other side of the coin with sort of setting up spending or budgeting framework. I think naturally, as a business goes through the ups and downs of its growth cycle, it's important to know when to grow and when to just go all out on growth versus when to be very conservative and preserve either cash or preserve the team's time for something else. And with that, with this second piece, obviously macro environment plays a big role, availability of capital plays a big role but also just whether you found a product market fit for us at Hero, for instance, we found a huge unlock in the business after we became eligible for Medicare. And in the months coming up to that, when we were expecting this new program to launch, we proactively decided to save our money on marketing and preserve it until we have this new thing going on where we could spend it much more efficiently. And I think many companies have been asking themselves the same question in the last call it's twelve to 15 months can I afford to keep growing at the same rate that I had been? And what are the optimal tradeoffs between unit economics on the DTC or beta B side and my growth rate, right? Have I grown enough to warrant investors being interested in me for the next fundraising round and trading that off with am I going to have enough cash to last until I'm big enough to be of interest to investors? So I think that depending on where a company is, that's a second sort of important topic that comes up. And I think related to that, and oftentimes in a business's later stages, optimization is what comes up as a third important sort of bucket of things to watch out for is when a business is growing, there is an engine behind it. Now it's time to optimize it and really crank out on every lever possible even and squeeze out everything in terms of efficiency that can be squeezed out in order to have a bit of a margin of safety when it comes to things that you cannot control. So control the things that you can do to such a degree, to the maximum or optimum degree and then that buys you more cushion or more ability to deal with things that come up inevitably that you cannot control.

Megan - 00:28:25: And you mentioned creating a culture of frugality but how do you foster a culture of transparency, accountability, and collaboration within your team and how does that contribute to a company's peak performance?

Emil - 00:28:41: I would say that that is one of the foundational layers of peak performance is trust and trust to me is related to all these things that you mentioned transparency and accountability and it starts from the top, right? It's people notice even if you're kind of saying the right things but you're not actually doing them, people notice and you may get away with it for some time but after a while, it becomes very apparent to people and that's not a formula for medium to long term success. So I think you walk the talk, right? I think that's an important aspect and you behave like a normal human being and put yourself in the shoes of the people you work with and see if I'm them, would this be an interesting or good life-supporting place to work at or not? And if not, can this be improved or for whatever reason? If it cannot be, then you figure out how to live with it and kind of adjust around it or help people adjust around it.

Megan - 00:30:08: And how do you make sure that the company has the right resources and personnel to effectively manage finance, especially these days when talent is very scarce?

Emil - 00:30:20: Yeah, that's a good question. I think what we've discovered in different companies is that nowadays with remote work, even in the finance function, you can work with people from around the world. You can have people on both the strategic finance side as well as the accounting side who are as capable, as hungry if not more hungry, and more cost-effective for the company to hire who are outside of the United States. So I think that's one and also within the United States, going to not only the main hubs for talent can be a good strategy because it's less competitive there, so better talent can be available and also exploring hybrid full-time part-time roles that can work for many organizations. I have found that with accounting and some strategic finance roles as well, working with someone on a fractional basis can be very cost-effective because you get access to a higher caliber of talent that you may not need on a full-time basis and you get that in a very cost-effective way. So those are to me the different puzzle pieces and figuring out the optimal sort of setup is up to a particular organization's circumstances. But I think there are a lot of new developments in how finance and accounting works that are now available to all of us, especially since the pandemic.

Megan - 00:32:31: And can you discuss your experience with M and A and how that shaped your approach to financial decision-making?

Emil - 00:32:38: Sure. So the most experience I have with M and A is from my days in private equity and investment banking. There, I think one of the big lessons that is applicable to me now in an operating role is just the concept of cultural fit which I think is more important the smaller an organization is. So cultural fit and alignment are oftentimes overlooked. When synergies make sense, purchase price makes sense, and the different puts and takes of a deal make sense, this can get forgotten. And to me, that's sort of the other side of the coin, of the incentivization coin. So if you're going to acquihire or buy a business, you're going to ensure that the key members stay on for a transitional period. But it's part of that aligning people culturally can be as important. Right? And that's easier said than done. That's where it becomes an art and less of a science. But I think prescreening for that from the get-go can save people a lot of headaches down the road.

Megan - 00:34:15: I'm just curious, are there any tools you use for screening? I know some companies have Cultural Index Surveys or Predictive Indexes. Is there anything that you guys are using?

Emil - 00:34:30: Yeah, in different circumstances. I've used culture surveys that are less from an M and A point of view, but more of a day-to-day operations point of view. Culture surveys on a regular basis, I think are a must-have for finance or executive leadership and HR leadership. You really need to understand what people are thinking and set it up in a way that's truly fully anonymized and therefore can be more valuable because people would have the normal tendency not to be fully transparent with their employer. And so how to glean valuable information from those is critical. And one way of doing that is just setting that up on a regular basis and reinforcing just the anonymous nature of those surveys and also listening to the output right, and actually taking action against it. I think that's critical. And I think in the context of just more of M and A and Acqui-hires and things like that, there are various personality tests of varying degrees of sophistication that are out there that I know a lot of firms. When a PE firm wants to replace the CEO, for instance, some of the more institutional players would use that. A person would literally sit down for 3 hours with a psychiatrist or a psychologist and go through different aspects, behavioral aspects which are being added to their overall file. So I think those things are also around, but not necessarily applicable to every situation.

Megan - 00:36:33: And can you talk about the importance of strong communication and collaboration with other departments and stakeholders at Hero or the other places you've worked?

Emil - 00:36:45: Yeah, so I think that's critical and it's not rocket science. Sometimes for whatever reason, we're just hesitant to reach out and set up structures. But talking through things is oftentimes just the most efficient way to get to an outcome specific example for Hero, it's a relatively complex business where there's hardware, there's software, there are services, and there's a subscription component. And so a critical link for finance has been the partnership with operations who are actually in charge of getting we have a piece of hardware as part of the Hero platform. So they're in charge of getting different parts for that hardware, assembling it, delivering inventory, and then ultimately shipping it to the end user. So managing that supply-demand dynamic on a weekly basis is critical, especially with disruptions to this global supply chain, lead times increasing, and costs increasing, that has been a critical collaboration. And similarly, a part of the supply-demand sort of topic is just the collaboration between marketing and finance. So setting proper guardrails for the marketing team on profitable spending, and profitable growth spending. So certain LTV to CAC metrics or payback metrics basically create a dynamic forecast for the business and similarly are looked at on a weekly basis with members from both sides. I think it's absolutely critical for businesses that have those components.

Megan - 00:38:56: And if our listeners take away just one thing from this conversation, what would you want it to be?

Emil - 00:39:04: I would say that as we're galloping behind our pursuits and our goals, realizing that we'll reach them faster in a more satisfactory way or satisfying way, if, in the process, we don't lose sight of our own health and our own well-being. There's a saying that I heard from one of my mentors that we, as business people, spend half of our health to gain wealth and then spend half of our wealth to gain back to health.

Megan - 00:39:45: Yeah.

Emil - 00:39:45: So just pondering whether that's an intelligent equation or not is what I would leave our audience with.

Megan - 00:39:54: I love that. Lastly, as a finance leader, what keeps you up at night? What is around the corner that concerns you?

Emil - 00:40:05: Nothing keeps me up at night.

Megan - 00:40:07: That's good.

Emil - 00:40:07: But during the day, what I'm concerned about is the macro fundraising environment and unit economics or marketing spend efficiency.

Megan - 00:40:24: Emil, thank you so much for being my guest today.

Emil - 00:40:27: Thank you, Megan. It's been my pleasure. Thank you for the invite.

Megan - 00:40:30: Yeah. I really enjoyed speaking with you, and I appreciate you taking the time to be here with us today. And I wish you and KIRO all the best. Sounds like you're both doing amazing things. And to all of our listeners, please tune in next week. And until then, take care.

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In this episode, we discuss:

  • How can finance professionals effectively manage risks and make informed decisions?

  • Balancing the necessary risk in a startup environment with the controls finance needs to succeed

  • What is the role of self-reflection and continuous improvement in achieving peak finance performance?

  • How can you adapt and evolve strategies as your company grows to stay relevant?

  • Fostering a culture of transparency, accountability, and collaboration within your team

  • Ensuring the company has the right resources and personnel to effectively manage finance

Managing Financial Risks - Decision-Making Frameworks

Emil's framework for effectively managing risk and making informed financial decisions depends on the development stage of your business. From a finance perspective, it goes down to three components - cash burn and runway, operational efficiency, and growth finance.

“From an administrative perspective, doing a sufficient amount and leaving room for improvement for the quarters and years to come is one outlook that I find valuable for a growing company,” Vasilev said.

managing financial risks and frameworks quote

Self-Reflection and Continuous Improvement

Your finance career goals and ambitions always come with a price or a hidden tax on your physical and mental health. If that continues over a long period, you might get burnt out. Start establishing proper boundaries, set yourself up for health, and find sources of positive energy, like mind-body practices, breath work, meditation, sleep routine, healthy food and drink, a calm and collected state of mind, personal hobbies, and exercise.

“In finance, we're extra competitive, and we want to win. What happens is, yes, we can achieve things, but in the process of this achievement, there's a hidden tax on our health, whether that's physical health or mental health. And we pay that as individuals, as people. The company doesn't pay that,” Vasilev said.

Optimization Strategies for Later Stages of Businesses - Financial Decision-Making Frameworks

Adopt an ownership mentality when it comes to budgeting and spending and be aware of macro-environment factors when making decisions about growth. Create a culture of frugality and foster transparency, accountability, and collaboration within a team to achieve peak performance.

“Naturally, as a business goes through the ups and downs of its growth cycle, it's important to know when to grow and go all out on growth versus when to be very conservative and preserve either cash or preserve the team's time for something else, ” Vasilev said.

financial decision making frameworks optimization strategies quote

Creating a Culture of Frugality and Transparency

Trust is the cornerstone of fostering a culture of transparency, accountability, and collaboration within your team, which starts from the top and is based on transparency and accountability.

“One of the foundational layers of peak performance is trust,” Vasilev said.

Emil Vasilev, VP of Finance at Hero.

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