Big numbers don’t scare John Kinzer (ACCT ’90). With two IPOs under his belt (Blackboard’s $81 million and HubSpot’s $144 million offering), Kinzer knows what it takes to move a company from being privately held to becoming publicly traded and owned.
“Going public is not a decision that should be taken lightly,” says the HubSpot chief financial officer. “When you are private, you have a lot of flexibility, however when you go public everything you do is under a microscope.”
Before joining HubSpot, Kinzer served as CFO for Blackboard, the educational technology company that he helped take public in 2004 and helped grow from $45 million to over $500 million in revenue before it was acquired by Providence Equity Partners for $1.8 billion in 2011.
Many companies choose the IPO path, he says, because they have taken “a material amount of venture capital funding, and their VC investors need to get liquidity and show returns for their investors.”
Other reasons for going public include the need to raise additional funding to grow the business and the desire to “gain credibility with your current and future customers by showing that you are properly capitalized.”
One size does not fit all
Going public is a viable option for some—but certainly not all—companies, Kinzer says. He emphasizes that the process of getting a company ready for an IPO needs to start well in advance of the actual event.
It can take a year to get the company prepared from a financial standpoint, and then the management team needs to work on how the story will be told and what metrics will be provided. The culmination of the process is the symbolic “ringing of the bell.” This should only be the start, however, Kinzer adds. “The proof is in the results the company delivers after the IPO.”
His Virginia Tech accounting education prepared him well for his first job at Arthur Andersen, he says. But as he gained more experience in public accounting, he began to feel a pull toward the finance side of business, which eventually put him on the CFO path.
Measure twice, cut once
An important part of a CFO’s job, Kinzer says, is to put in place a financial structure that can measure the returns on investments in areas like sales and marketing. “Our job isn’t to help improve a marketing campaign or put programs in place to sell more, but we can help the sales team structure a sales comp plan and the marketing team measure the ROI of the various marketing efforts.
If you get these measurements right, you can empower the marketing and sales leaders to operate mostly autonomously. This creates a great partnership with finance as opposed to putting each other at odds if finance is constantly second-guessing their decisions.”
Workplace compassion adds value
The detailed world of financial reporting, accounting, audits, and IPOs can appear to be a dry, buttoned-up type of environment, but it does not have to be that way. Kinzer says HubSpot is different from other companies where he has worked.
It has an open, flexible environment, and the only “real policy” is “use good judgment,” he says.
“I have never been at a company that cares so much about culture. We have a culture code presentation that is one of the most viewed decks on SlideShare.”
Captured in the acronym HEART (Humble, Effective, Adaptable, Remarkable, Transparent), the presentation of 150-plus pages emphasizes the traits HubSpot values in its employees. “A big reason I came here was that these traits really resonate with me. As we grow to a much larger company, we are working diligently to maintain this unique culture by hiring people who have these qualities.”
It is not just the culture that drew Kinzer to HubSpot, it’s also the fact that HubSpot’s software helps companies grow. In fact, he has assisted on five different sales deals where former colleagues have bought the software to help increase leads and grow customers at their companies.
Bringing his experience back to Blacksburg
Recognizing that he has benefited from the guidance of mentors and others, Kinzer seeks to give back.
A member of the advisory board of Pamplin’s Apex Systems Center for Innovation and Entrepreneurship, Kinzer hosted a visit in March by the students to HubSpot that the team said was a highlight of the “Entrepreneur Trek” to Boston. Later this year, he hopes to work and learn with students as one of the center’s entrepreneurs-in-residence.
“I am really excited about the direction that Dean Sumichrast is taking the Pamplin College of Business in and to be able to work closely with center executive director Derick Maggard to make sure the entrepreneurship program is successful.”
Kinzer advises business students to learn as much as possible about finance and accounting and hone their technical skills. But to be truly successful, he says, they need to have well developed “soft skills,” including the ability to build relationships, be great listeners, prioritize what they are working on, think laterally, and work well on teams.
“If you can excel in these areas, it will open up many great opportunities in your career.”