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Scott Orn

Scott Orn, CFA

Mark Khavkin, CFO of Pantheon, talks about the role of finance in a late-stage startup

Posted on: 12/01/2021

Mark Khavkin

Mark Khavkin

CFO - Pantheon

Mark Khavkin of Pantheon - Podcast Summary

Mark Khavkin discusses his experience and the importance of finance in startups, and how finance helps companies operate cohesively with common goals. We also discuss finance’s role in forecasting, resource management, and overall strategy.

Mark Khavkin of Pantheon - Podcast Transcript

Scott: Hey, it’s Scott Orn, Kruze Consulting. And thanks for joining us on Founders and Friends for another awesome podcast. Let’s give a quick shout out to the Kruze Consulting accounting team. We’re very fortunate. We have a ton of people at Kruze who work on the monthly books for our clients and get them all set up, due diligence ready, rocking every month, answering all the clients’ questions, making all those adjustments. And there is no better moment for a founder, and for us really, when the founder says, “Hey, I think I’m going to get a term sheet. Are my books ready for diligence?” And we get to say, “Yes, they are. Fire away. Send them over. Give them access.” That is a great feeling. It’s the feeling that lets us know we’ve done a job very well done. And nothing is better than watching that cash hit the bank account. So, if you are a venture backed startup, you’re going out to fundraise, maybe check us out. Check us out at We love what we do. At taping here, I think we have 575 clients. Clients raised over a billion dollars this year, so we know what we’re doing and hopefully we can help you be successful in your fundraise. All right, let’s get to the podcast. Thanks.
Singer: When your troubles are mounting, in tax or accounting. You go to Kruze Founders and Friends. It’s Kruze Consulting, Founders and Friends with your host, Scotty Orn.
Scott: Welcome to Founders and Friends podcast with Scott Orn at Kruze Consulting. And today my very special guest is Mark Khavkin of Pantheon. Welcome, Mark.
Mark: Thank you, Scott. Good to be here. I’m a fan.
Scott: Oh, thanks man. Well, you are a super knowledgeable CFO and I forget how we were connected, but I think we started emailing and chatting probably about a year ago. I wanted to have you on because you have a really interesting perspective. A lot of the people I interview are early stage founders or early stage professionals. I’ll let you introduce yourself, but you’re at the later stage and for a finance professional at the later stage, I thought you could shed a lot of light on what you do and how you helped the company grow and all that kind of stuff. So, do you mind just retracing your career a little bit and letting us know how you got to Pantheon?
Mark: Yeah, absolutely. We actually met quite a few years ago, I was asking for advice and you were super helpful. So definitely played a little bit of a part here. Quickly about my career, so I started in a fairly traditional post undergrad career route that is typical for people who studied finance. Went into Wall Street, did a little bit of portfolio management, just right out of school. Then went to business school, got my CFA somewhere along the way, dreamt about staying on the investment side, had an offer from a prominent hedge fund in Boston. But that was 2008, and 2008 was not very welcoming to newly graduated hedge fund manager.
Scott: Only if you were the stress debt hedge fund or something.
Mark: Maybe. Maybe [crosstalk] So I left the states. Actually, I really wanted to stay in finance, that hedge fund offers absolutely blew up in June. And I went to central Europe to work in a private equity firm and did about three years of investing throughout the region, mostly in financial institutions, banks, insurance companies, and things like that. And then about three years later, I realized I wanted to come home to the bay area where I grew up, went to Berkeley, had most of my friends, my family is here. So, I came back and saw a very different emotional landscape. The finance world, and late aughts, early 2010s, was a little bit distraught. People were just coming off the great recession and people were super scared for their jobs. The industry was being commoditized. Abundance of money was around. And then in technology, in the bay area, it was a completely different landscape. Everyone was happy. Everyone was raising money, iPhone just came out. Opportunities were growing on trees, so to say. So, I decided to move to leave the dark side of Wall Street and join the technology boom here in the bay area. A couple of jobs later, I found myself at company called Upwork. It’s a marketplace for freelancers.
Scott: That’s how we met.
Mark: Yes, yes, yes. So Upwork, at the time, was pre-public. Two predecessor companies just merged. We were going through a very interesting and promising merger, getting started to do this old pre-IPO song and dance. And this opportunity came about five years ago to join a much smaller B2B company coming off series C, called Pantheon. Just over $15 million in annual recurring revenue, 70 people or so. But I had the opportunity to take over the entire finance group. Finance, accounting, data, pricing, analytics, even legal. So, everything I could dream about as a finance leader, and be able to participate in building this company. So now five years later, we are sort of classified as pre-IPO. Now a unicorn. Just raised $100 million from SoftBank and it’s a 400-person company. So just really enjoyed and was lucky to take the job and that somebody gave me the opportunity to take that on at Pantheon. Looking forward to the next part of the journey.
Scott: Yes, it’s got to be so rewarding. Because five years is a long time in operational finance, to be at one company. You look back, is it just incredibly rewarding to see the growth from 70 to 400 people? That’s incredible.
Mark: It’s absolutely incredible. The company has changed so much we’ve up leveled each other. We have maintained some of the culture, or most of the culture. But the level at which all of the execs operate with each other, our teams operate, the way people are empowered, the problems we solve day to day. Everything is so, so different and it’s incredibly rewarding. I can’t even imagine what’s going to happen in the next 10 years.
Scott: Yes. That’s awesome. Now, are you still running all finance, all legal, or is legal broken up, or broken out from your function? How is this job structured now?
Mark: No, thankfully legal has, for the sake of everyone involved, we have a GC, the GC as customary reports to the CO. But the expansion came from more in depth toward different kinds of work. So, I still obviously have…well the new part is corp dev and strategy, there’s FP&A, strategic finance now broken up. Obviously, all of the accounting features some of the finance systems and analytics is a completely different organization. Now with a whole lot more wherewithal, a whole lot more gravitas and influence on the organization. There’re now actually things to analyze and predict at scale. And more people who rely on the data that we are able to gather and analyze and make action decisions on.
Scott: That’s amazing. So, I think the job of a CFO at a later stage company is two things, probably. Keep the trains rolling on time, keep things from breaking. But then the second aspect is how to fuel the company’s growth and be a partner with the rest of the management team. What’s your overall strategy? Let’s focus on the growth for now. And then we can come back to the keeping the trains running on time. But how do you help propel this company forward to an IPO someday?
Mark: So, the way I started to think about the world, at some point through this five year journey, is I outline the vision of the team. Three things that I took out, the three things that are most important to us, or to my team. One is to figure out what are the strategic objectives of the company. We know the mission, we know the vision, but those are five, 10 years of perpetual duration. Now we need to figure out, okay, what is the two to three-year strategy? And this is where it all starts for finance. This is where my team needs to be the critical part of ideating this and making sure this is achievable, this is well understood, this is aligned with product strategy, this is aligned with go to market strategy. But this two to three-year actual strategy is part of what my team needs to drive. And I’ll go in a second to what strategy to me is, but this is one bucket. The second bucket is making sure that the company, as a whole, all the teams within the company, operate cohesively. So, people are working, quarter to quarter, to accomplish the same goals. That makes sense [crosstalk]
Scott: It’s interesting as a financial leader that you’re taking responsibility for all those groups working together. Because not all finance leaders think about that. Sometimes finance leaders think about, I’m the numbers person, but it’s really great that you’re taking emotional responsibility for everyone getting along and working well together.
Mark: Make no mistake. I’m also a numbers person. Yes. Everybody in the company is an expert and potentially the best at what they do. But it’s the job of the finance, as a centralized organization, to make sure that resources are allocated in a way that these people do the best that they can do and everybody is moving in the same direction. And then they’re empowered and have the tools and information to do their jobs in the best and in the most aligned way. So, one is, let’s have the strategy, then let’s all make sure we work together to achieve that strategy. And then the third part is closer to traditional finance, I would say, is that we do all of those things at an acceptable and agreed upon level of risk. That we are not being too conservative, but also, we are not betting the house on something that’s a moonshot and has 1% likelihood of being a success. And yes, that’s what the investors want you to do.
Scott: But not being too conservative is a great point because, especially if you’re trying to get to an IPO, you’re threading the needle in a way, because you don’t want the company to blow up or bet too much like you’re talking about. But sometimes companies are actually too conservative, but to post those growth rates that IPO investors want to see, you got to be doing something very, very well and really pushing the envelope. So that’s an interesting point there too, not being too conservative.
Mark: But that goes also to the point of deciding on the IPO timing. The IPO timing should depend, to a significant degree, to the level of readiness as determined by how much risk you want to take on in the development and growth of your firm. Because it’s obviously harder to take on greater risks with your product, with your go to market strategy, with all of those things if you are under the microscope of quarterly earnings. So, you want to get the riskiest part of your strategy out of the way, assuming that you have funds in the private markets. But then you want to go public, they call for the right reasons. And you don’t want the corporate structure of the company to dictate your growth strategy, if you can afford.
Scott: I totally agree. And also, I used to work investment banking before I went to Lighthouse and did venture debt, and the worst thing that can happen to a company when they go public is to miss that first quarter or the second quarter. It’s almost like you can’t recover from that as a business because all the institutional owners, the fidelities, all those types of folks just sell.
Mark: They’re in a penalty box for years and years and years.
Scott: Yes. Yes. So, I think you’re making a really good point about working out the kinks, getting the growth foundation all set up and having a clear runway to hit your numbers, post IPO. That’s when you want to do the IPO, not when you’re still maybe changing your business or introducing a new product or whatever it is.
Mark: Exactly. Or pivoting or creating a category or doing something that you have very high confidence in. So those three things, back my mission as a finance team. Develop a strategy that’s aligned with the mission, vision. Making sure that there’s an environment to operate cohesively. And doing it at the right level of risk. So now I just wanted to talk about what is strategy. That’s the biggest thing I have to debate. Not that I am some sort of a guru from HBS, I’m not. But I’ve decided to narrow this down. What does strategy mean for myself and for my team and the context of growing the company. There are a few things that I like to study and I like to bring to the table in those conversations. They may sound simple, but when you actually do the work and put all of them together frequently it’s eye-opening and it then enables to do everything that’s downstream. So, first is, for the company in the context of your mission, what is the value you create as a company with your product specifically? What is the value? Then the second question is, for whom is this value created? And for which use cases? Third one is how you monetize this value. And then finally is, how you are differentiated from people who are trying to do the same thing.
Scott: Yes. Yes. Actually, it’s a great exercise because I’m going in my head about Kruze Consulting and answering all four of those questions. And it is like your north star as a company. Who are we helping? Exactly how are we helping? How are we monetizing that? That’s a really good framework for thinking about this. Hey, it’s Scott or, and we’re going to take a quick break from the podcast to give a shout out to the Kruze tax team. Gosh, it’s so nice to have an in-house tax team. I can’t even tell you. We have some really amazing professionals on team. I think it’s 13 people now and we do everything from your federal state income tax return, state franchise tax filings, R&D tax credits, those are pretty popular these days. And guess what? They’re there for you when you go through diligence. A lot of people don’t know this, but you actually go through tax diligence not just operational financial diligence, but you do go through tax diligence. So, it’s nice to have Vanessa Kruze on the phone with your VCs, in with the accounting firm they hired to diligence all your stuff, and the law firm, they hired to diligence all your stuff. Vanessa knows what she’s doing. She’s done this a million times. And it’s not just Vanessa. We have a really great team of tax professionals that will do those calls too. It’s sometimes the difference between getting around close or having it take another two weeks because something was disorganized and the tax compliance wasn’t done correctly. We hear those horror stories from clients that come to us. So, hey, if you want Kruze’s tax team on your side, we’re here for you. Check us out at Thanks.
Mark: So, it’s almost like you have a strategic offside in August and you need to have four decks answering each one of those questions. That is your table stakes. This is your conversation. This is how the finance world starts. And if you have those, then everything downstream becomes significantly easier, A: to do and to brainstorm and B; to align everybody else around.
Scott: That last part about the alignment, I think is a really good point too, because especially when it’s written or a presentation that everyone can attend and watch and listen to, it preemptively answers a lot of questions for the team. And people can self-check. No matter what organization. They’re in the finance organization, marketing organization, R&D organization, they can think about, well, am I actually contributing to the success of our customers and creating value and ultimately getting paid for that value? If I’m not, I’m probably doing something wrong or something’s off and we need to talk about it. So, I really like making these things public and talking it through with everybody.
Mark: And they serve as guardrails for what people can do and here’s the critical moment. You are not making decisions for people because all of these people in the company are much better at what they do than you are. But this is how you influence people to do the thing that’s meant to accomplish the same north star for everybody. And then everybody gets to do them the best way they can, which is hopefully the best way anybody can.
Scott: I like it. And they may have feedback for you. Someone told me one time, it was actually one of my business school professors, who was an innovation consultant. And he said one of the first people he interviews every time he goes into a company, he does Fortune 500 companies, he interviews the finance team. And he said the reason why is finance people are very good at abstraction. And they understand all the different aspects of the company. And they also follow the money through the company. And so sometimes they’re the most innovative and most plugged in to the corporate structure and all the stuff you’re talking about. So, I really like where you’re going with this. This is really smart.
Mark: It’s almost by definition. Finance team has the view over the whole business. This is where everything comes together. This is where resources are allocated. This is where you know what drives different revenue streams and what has been tried, not tried. You also see where people are not collaborating with each other correctly.
Scott: That’s totally true. And what’s not working.
Mark: And what’s not working. Exactly. So, if the finance team and the CEO, hopefully, but CEO may have a much higher view of this depending on the company. Well, in any case, so those things are aligned. You have the strategy, that’s still two to three years. Then as a finance professional, the finance team, you still need to make sure that there are enough resources in the organization to execute on all of those. So, the cap table, vision, the fundraising vision, the runway versus the burn, all of those things fall on you. And this is also where the risk consideration comes in. do you want to be well funded for next 10 years and be profitable, but grow slower? Or do you want to take risks every two years and bet it all on a feature that may work out so handsomely that Jeff Bezos will be [inaudible]
Scott: Wants to buy you.
Mark: That is really driven by the finance with an input from the board, and also given the board profile. It’s different [inaudible]
Scott: On those things about the burn rate and fundraising and the revenue drivers, how often are you checking in with the CEO and the rest of the executive team? And how often are you checking with the board? Is it every board meeting or is it more often than that? I’ve never been a late stage CFO. I actually don’t know the answers to this. What’s the messaging, what’s the keeping people in the loop process?
Mark: We have all been spoiled in the last five, six years by the abundance of private capital. Quarterly is the regular cadence. And this goes for the CEO, the executive team and the board. But the conversation is, because of this abundance of capital and our track record as a company, the conversation is easier than it would be if we were a cash strapped business in 2008. I was on the investor side. In 2008, I was in the private equity firm. That was a very different conversation with our portfolio companies than I’m having now on this side of the table with my investors.
Scott: And you guys have a lot of momentum and probably people are throwing IPO style valuations at you, but raising the money privately. So, you’re having your cake and eating it too right now.
Mark: The focus is very much on growth. The focus is very much on developing the product innovation that we believe in. So, the focus is that. And the board over the last five years of working with me, it has confidence that they’re not going to get a surprise. Keeping fingers crossed, but I haven’t surprised them yet.
Scott: Maybe talk about that for a second. That’s an important…establishing your credibility as a CFO is super important because those people have to know they can count on you. They’ve marked up their portfolio. They’re talking about you to their limited partners and saying what a great company Pantheon is or whatever company, if it’s a different company you’re working at. How do you maintain that trust and credibility with them?
Mark: One word: forecast.
Scott: I love it. I love it. And can you say a few words about your forecasting technique? Of re forecasting often or once a year. How do you do it?
Mark: We forecast every three months, every quarterly meeting. At this stage, we’re in a public so I don’t have to forecast it to the penny. The idea is to understand the drivers and to be able to look back and see what has worked and what hasn’t worked. Right. And so, it’s not actually that important that you said you will deliver $75 million and you deliver $74.9, because one driver could have doubled and the other driver could have halved, and mathematically it obviously doesn’t cancel each other. But you need to understand what worked and what didn’t and unpack it and arrive to this conclusion. So, giving the board the confidence that you understand the drivers and can predict this some way out. If both of those things work, great. But it’s the understanding of the drivers that is very inspiring for that cohort.
Scott: And when you’re talking to those board members and talking about the drivers, are you giving them a look underneath the hood of the car and saying, I don’t know your business well enough, but, “Direct has been amazing. Actually, that doubled. Our channel relationships aren’t performing like we used to have them perform. We got to figure out how to fix that.” Is that the kind of commentary you’re giving them? That style of stuff?
Mark: Yes. That’s the kind of commentary you are giving them. The art is to give just enough, not more, not less. But just enough to have a productive, consultative discussion with them. Giving them too much, they can’t give you meaningful feedback. They can just say, “Okay, that’s working. That’s not working. But nothing that I don’t know.” If you don’t give them enough, they also can’t give you any sort of meaningful feedback. But if you, for example, paint it in the way you just described it, something works, but this channel’s not working. You can actually start having strategic fish, but channel it. What changed in the ecosystem? Is it the competition that is encroaching on your partners? Are your partners going out of business? Are you not providing them enough margin? Is this particular business becoming less profitable? So, you can engage in this type of a conversation. And that is what you want.
Scott: I love it. I love it. That’s really cool. And you’re doing that at the board meeting? Are you doing it before or doing it in separate check-ins? How are you delivering those messages?
Mark: We’re doing it at the board meetings. We do have check-ins. I’m sure my CEO has more check-ins than I do. But the board meetings are a great way for the entire executive team to get at the same table with the entire board. And the board, if well-constructed, can provide different viewpoints. So, on our board, somebody is more financially minded. Somebody is more sales and marketing minded. Somebody is more customer focused minded. So, we can get all of those viewpoints on the same issue that we have identified. And if we give them enough information, then the conversation actually flows, as opposed to just being, “Okay, this is good. This is not good. But I noticed.”
Scott: Love it. I love it. And then on the fundraising side, those people have their pulse on the fundraising market better than even CEO, CFO. Are they giving you constructive feedback of, “Hey Mark. You nailed your numbers again. Might want to think about raising capital.” Or “Hey, the numbers are looking good. I can see the upwards swing. Should we start writing an S1 right now?” How active are they on the feedback?
Mark: Very active. Yes. Yes. That’s that’s their job. Very active. All I can do in looking inwards is to determine the risk tolerance, but without understanding the outside facts. I can calculate and do scenario analysis on hypothetical burden. If we succeed, if sales and marketing increase and we are doing well, which could actually mean we burn more money. Or if sales and marketing is not doing well, product does not resonate, then maybe we need to do a little bit of a riff and then run different scenarios and say, “Okay, we have funding for between six and nine months. Or you 18 and 24 months.” Something like that. But the board can come in and say, “Well, the external environment is such that maybe you do want to wait a little bit more. Or maybe the external lines are such that it doesn’t matter what your risk tolerance is, you need to raise now because it’s not going to get better.” Outside in perspective that I just don’t have the time to develop because I’m running the business. So, they engage very actively and it’s super helpful.
Scott: How do you handle it when another member of the executive team, like the VP of marketing or the VP of R&D comes to you and says, “Mark, our marketing performance is amazing. I need more budget. Give me more money, Mark. Loosen up the purse strings.” How does that conversation go? How do you get to a resolution with that executive? What’s the process there?
Mark: Well, my first process is to say, “Okay, well how will this impact the entire company?” So yes, I can give marketing more budget to generate more leads, but do we have enough people in sales to take care of all those leads? Do we have enough people in support to ensure that we can migrate all of those customers? So, at first, I want to understand what else, around the company, we’ll have to do. And then, is this consistent with the strategy of the company as aligned on those first, initial strategy decks? And if it’s not aligned, maybe it’s time to revisit the strategy. Maybe the strategy’s incorrect. Maybe we assume that product A will resonate, but all of a sudden, it’s the product B that everybody is calling us about. So, this is where the work starts and I need to do it quickly because now I’m holding up the whole company.
Scott: But you’re doing that operational check in and operational diagnostic to make sure the company as a whole can handle it. And checking out any of the weak spots in the company that needs to be bolstered before yet you turn the spigot on.
Mark: Right. And is it consistent with what all of us have decided to do over the course of the next 12 to 24 months? And hopefully it is. And hopefully we can deploy more. Hopefully marketing just found a new avenue to find leads, but sales has been twiddling their thumbs and maybe they’re under capacity. Okay. Well then that’s an easier conversation. But there’s still downstream impact. You found something. What have you changed? Is it specific product? Do we have to deploy more resources into developing something specific that all those people are calling for? Has our ideal customer profile changed? Like have we opened up a new geography? Maybe we need to put reps in this new geography. Have we opened up a new industry and this industry requires a new certificate that we need to procure? Is finance calling us all of a sudden? Well, does that mean we need to get some sort of new compliance certificate to open this even more? And this is the job of the finance function. This is this alignment of all the groups, because we have the view of who does what.
Scott: I love it. I love the way you’re thinking about it strategically. It’s not just numbers, it’s actual people. And what I keep hearing you say over and over again is, is it what we agreed on? Is it what we all thought was best for the company over time? And is it consistent with our strategy? Which is beautiful because it’s not-
Mark: And if the answer is no, maybe we made the wrong call. But then everybody needs to get back in the room and change the call. And then everybody changes at the same time. Some of it is obviously visionary. I’m not successful a hundred percent of the time and misalignments still happen and it surprises me too.
Scott: We got to wrap up pretty soon, but talk about that for a second. You’re not a visionary. None of us are perfect. You’ve given marketing too much money or given R&D too much money. How do you reign it back in if it’s not producing? How do you have those conversations?
Mark: If the partners are invested in the success of the entire company and the data is clear, it’s not a tough conversation. And then the conversation is not stop doing this. You are wasting resources. The conversation should always be, let’s reallocate it to something that’s better producing. That’s the conversation that everyone loves to have. If you are helping them deploy capital where it works opposed to starving them of capital that they may think is better than not doing.
Scott: I love it. I love it. So, you have that conversation and you point to data. And if they’re bought into the company vision and long-term thinkers, it’s not too hard. The partners [crosstalk]
Mark: And the strategy. And again, if we blend into the strategy and then identify this is what we need to do the next two to three years, it becomes an easier conversation. If it’s like this but that.
Scott: I love it. I love it. Oh man. Well, this is amazing. Feels like we’ve been talking for five minutes. We’ve been talking for 30 minutes. Maybe we need to have you back and talk about some more stuff here. Some more operational stuff.
Mark: Anytime. You’re asking fantastic questions. I love it.
Scott: Thanks, man. Well, do you want to finish up here and let everyone know how they can find Pantheon, if they want to work with Pantheon. It’s a web ops company. Maybe give a little plug for your company here before we go.
Mark: Yes, absolutely. I would love to. And we’re always looking for top talent, especially in finance and in all of the areas that could help me drive this alignment. So, love talking to fantastic people in all stages of their careers. Feel free to reach out. Pantheon is a web ops platform. We built a set of tools and infrastructure to help teams manage portfolios of websites. So, we’re solving this age-old problem where it takes a village to build a website and maintain and make it agile and reactive to market environment. The village has marketers, content managers, designers, developers, engineers, security personnel, and many other functions. It’s very hard for them to collaborate in time, to make changes that are meaningful and relevant to the marketplace. And if they don’t the business results of the website suffer. And the CMOs can’t produce what their objectives are. Mostly it’s [inaudible]
Scott: This actually corresponds exactly with the way you talk about your company strategy and the finance function, like the data makes smart decisions, long term thinking. I love it. Mark, thank you so much for coming by and we’ll have to have you on again. Appreciate it.
Mark: Absolutely. Thank you, Scott. Always a pleasure.
Singer: So, when your troubles are mounting in tax or accounting, you go to Kruze Founders and Friends. It’s Kruze Consulting, Founders and Friends with your host, Scotty Orn.

Kruze Consulting is a leader in Startup Tax Filings, Payroll Tax Savings from R&D Tax Credits, professional advice and more! Find out why hundreds of seed and venture funded startups trust Kruze Consulting’s tax experts, software and process to save them time and hassle.

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