Ever fantasize about ditching the corporate establishment to start your own business? Former Vital Link Business Systems CFO Steve Peterson took that leap last September, when an investor-led management reshuffling left him out of work. After weeks of job-hunting and soul-probing, the veteran of 14 years at big companies like Capital Cities/ABC and News Corp. began to think about jumping off the corporate ladder. “Inventing a job,” he says, “almost seemed easier than looking for one.”
The process involved leveraging a variety of telecommunications-industry experiences, including data-center management. Within several weeks he recruited two former colleagues and developed a plan for repackaging and reselling sensors made by a local company that he had advised informally for years. The products offered by his new company, SentryTrack, monitor variables like temperature, humidity, and electrical usage at data centers and other environmentally sensitive locations.
Peterson says he is sure he made the right choice. “Being an entrepreneur can be nerve-racking financially, but it’s also exhilarating.”
Not surprisingly, given high CFO turnover and a tough job market these days, Peterson is in good company. “An increasing number of our clients are looking for alternatives to taking full-time jobs doing the same thing they’ve always done,” says Dave Corbett, founder of New Directions Inc., a Boston-based career-development center for senior executives. In fact, a down economy can be the perfect time to test one’s entrepreneurial mettle, says Stephen Spinelli, director of Babson College’s Arthur M. Blank Center for Entrepreneurship. “The worst case might be that you deepen your network” in pitching the idea. “And if nothing happens, you go back to the job search.”
The Thrill of a Sales Meeting
Of course, the ability to quantify the costs and benefits of a business opportunity gives entrepreneurial CFOs advantages over those who get going merely on hopes and dreams. But some former finance chiefs say their own start-ups offer a welcome chance to round out other skills, since traditional bailiwicks like investor relations and mergers and acquisitions may be irrelevant in a shoestring operation’s early stages.
Strategy and product design were the main concerns in the first stages of his venture, says Sanjay Muralidhar, who launched an investment-management software business with his brother last year, after holding major finance posts at Reader’s Digest and iVillage. The next tasks were recruitment and “building team spirit,” adds Muralidhar, 40, now CEO of the company, Mcube Investment Technologies LLC. With several large financial institutions evaluating the company’s software, his job is now “all about sales and marketing,” a field that he finds he loves. Finance skills come in handy for budgeting and structuring equity stakes for partners, Muralidhar notes. But “the highs from a good sales meeting” far exceed those from “anything you might do in finance.”
Even new ventures rooted in finance offer the chance to develop nonfinance skills. Sar Ramadan, a three-time public-company CFO, left Insightful Corp. in September to start his own international merger-advisory firm, Ramar International — and try his hand at being president. “I wanted to do something that utilizes my international experience and my deal-making skills — all the stuff I’ve been doing for other people throughout my career,” he says. “As a CFO, though, your function is limited to certain aspects of the business, and it’s always in an advisory role.”