This start-up helps start-ups that can't afford full-time CFOs
Don't be fooled by Gene Godick's modest workstation, a cubicle among many, its only distinction his nameplate and the Villanova University desktop basketball hoop.
Don't be fooled by Gene Godick's modest workstation, a cubicle among many, its only distinction his nameplate and the Villanova University desktop basketball hoop.
His business acumen is worthy of a corner office.
Godick has 25 years of financial and executive experience, including leading one of the most successful initial public offerings during the internet boom as chief financial officer of VerticalNet. Post-tech bubble, he guided its restructuring from online B2B publisher to technology-solutions company. Then he cofounded and was CEO of Tafford Uniforms, an online retailer and cataloger of nursing uniforms that he and a partner sold in 2012.
So when a potential competitor offered to buy his current business, G-Squared Partners LLC, before it was even off the ground, Godick knew what that meant:
He was onto something.
"I said, 'No thanks. I want to do this on my own,' " he recalled recently.
Four years later, G-Squared, a Fort Washington-based supplier of part-time CFOs to early-stage companies, has 17 employees and expects to reach $2.6 million to $2.8 million in revenue in 2016, up from $1.5 million last year.
It is also one of 20 finalists in the inaugural Stellar StartUps competition sponsored by the parent company of the Inquirer, Daily News, and Philly.com. Winners in six categories will be announced Thursday evening at the new Pennovation Center in West Philadelphia, where some of the region's accomplished entrepreneurs will share their strategies and insights over cocktails and hors d'oeuvres.
"I was trying to figure out what I wanted to do with my life," Godick, 51, of Montgomery Township, said of G-Squared's origins. "A couple of [venture capitalists] suggested I start this business. They said the area could use this model."
One of them put him in touch with similar companies on the West Coast. After a few months of networking, Godick launched G-Squared with a bare-bones business plan and $400.
"My goal the first year was to figure out how to make enough money to pay my bills, survive without hiring anyone," he said. "Eleven months in, we picked up a big firm, bigger than we could handle."
A year later, G-Squared had four employees; it had double that a year after that.
"The proliferation of start-ups has really helped grow our business," Godick said. "For most clients, we're their entire finance function."
CFO work is handled by Godick and a former colleague at VerticalNet, Jon Cohen, who is managing director at G-Squared. They attend clients' board meetings, help them develop growth strategies, negotiate lines of credit, and sign checks for them. They even assist them in raising funds.
Most of the rest of G-Squared's employees are recent college graduates with accounting degrees. Their responsibilities are far less executive.
G-Squared's fees are competitive with local accounting firms - ranging from $65 to $250 an hour - but its services are broader, especially as they pertain to operations and strategy, Godick said.
Overall, he said, the cost is about half what it would be to employ a full-time CFO.
Currently, G-Squared's portfolio consists of 25 clients, most of them software start-ups with revenues ranging from nothing (G-Squared gets paid when the clients start making money) to $15 million a year.
Globo is a six-year-old technology company, newly relocated to Jenkintown, that has developed a language-translation platform. CEO Gene Schriver met Godick when they were using the same shared-office complex in Fort Washington.
As head of a fledgling but steadily growing, profitable company expecting $12 million in revenues this year, Schriver said he immediately recognized the value of outside CFO help.
"Gene just came in and completely changed our world in terms of our financial sophistication and organization, from doing outsourced billing and invoicing to high-level strategic guidance and consulting, and building things like annual budgets, projections for our investors, 13-week cash flows," said Schriver, who also is an attorney.
"If I had to do that stuff myself, I'd screw it up royally and it would take up all my time," he said, while acknowledging that the relationship - meant to be temporary - is nearing an end.
"Our current strategy is when we hit $20 million in revenue, probably sometime next year, we'll need to bring someone in full time," Schriver said. "As much as I want to handcuff Gene to our conference room at Globo forever, he's running his own business."
At G-Squared, the strategy includes serving current clients well and finding new ones even beyond the tech industry.
Becoming obsolete - a concern of many start-ups, especially tech-related ones - is not among Godick's worries.
"It's not like someone is going to come out with a better accountant," he said.
215-854-2466 @dmastrull