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“Always be frugal. Don't throw away money when you don't need to, because markets are volatile”

20-Minute Leaders

“Always be frugal. Don't throw away money when you don't need to, because markets are volatile”

Jacob Shulman, the CFO of JFrog and Mellanox, talks to Michael Matias about what it’s like to see his companies' revenues balloon

CTech | 12:17  31.12.2020

Jacob Shulman, Chief Financial Officer (CFO) at JFrog, provides companies with crucial financial advice. To him, it is one of the most exciting and fulfilling parts of his work. Shulman received his first CFO role at 32 and has since worked with multiple companies, including Mellanox.

As the current CFO of two fast growing, prominent companies, Shulman is responsible for suggesting possible investments and acquisitions and understanding how well the business is performing. Over the course of his career, Shulman has learned how important it is for a company to have a strong mission and passionate CEO, and always ensures that he is aligned with the goals of the businesses that he works with. Shulman is extremely dedicated to helping companies scale and flourish and can truly say that he loves the line of work he is in. In an interview with Michael Matias, creator of the 20 Minute Leaders video podcast, he spoke about his passion for entrepreneurship and the responsibility that weighs on the people who manage businesses' bottom line.

 

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Jacob, who are you?

I'm a simple guy trying to achieve my dream career.

What is your dream career?

I have a passion for business, and working with smart entrepreneurs to help them achieve their goals. I particularly enjoy the finance side of the business.

Is your position understanding the core of the company, and understanding how much money a company needs and how they’re going to use it?

Yes, absolutely. I have to understand a company’s needs, its core business, and the value I could get for that business. I also help the company in decision-making; would it make sense to raise capital now, or should we wait until the product is ready and raise later at a higher valuation?

Give me the day to day of a CFO.

When I wake up, the first thing I check is how the futures of the market look. I need to know where the company’s finances sit. Are shares up 5% or down 5%?

When you're an executive in a public company, do you constantly check Yahoo Finance to see what the stock price is?

Not constantly, but you do want to have an idea of what's going on in the market because investors might call in if there’s a significant movement in the stock. They’ll want to know what triggered it.

As the CFO, what are your three most significant roles?

My primary role is to help the CEO of the company understand where our finances stand whilst being on the lookout for additional investments that would boost our financial growth. Secondly, I help in ensuring the company complies with all the laws and regulations. Thirdly, I act as the stakeholder and investor liaison.

Why do you enjoy being the CFO?

I’ve always been drawn to the finance and investment sector, and over time I’ve developed a knack for understanding a company’s financial future just by taking a look at the financials, which is something I relish.

What do investors in public companies and VC investors consider before investing?

Investors in public companies and VC investors look at different considerations. Public company investors value the company on its historical financial performance. They invest in established businesses with a proven track record of success and with a promising future. Conversely, VC investors often don’t have a company’s financial history; they invest in the idea and the entrepreneur.

What is the most fun thing you take away from seeing these companies grow?

Seeing revenue growth. When I joined Mellanox, they were at $50 million in revenue, and when I left Mellanox, they were over one billion dollars in revenue.

How do smaller companies differ from large companies when it comes to operation?

Smaller companies focus on penetrating the market, and they do that by building processes that allow them to scale quickly. Established companies focus on management, coordination, and even maybe acquiring other companies and integrating them into the business.

What are some of the patterns that you've seen in terms of healthy ways of running finances?

It's all about the people; you want to work with people with integrity and people who are honest. Secondly, work with true professionals.

Will the CFO usually fit the role as the company grows, or do you usually see people shifting, changing CFOs?

It depends on the person. Many people enjoy working with smaller companies, and when the company reaches a certain level, they decide to leave and go back to smaller companies. Some enjoy working for big companies and others, like me, enjoy growing with the company.

Big growth as a strategy versus getting bottled up in the current finances, how do you balance the two, and what are the ways that you can think about the big picture?

You have to analyze the size of your market, your potential, your competition. Think of how big you want to get and what to invest in to get there versus maybe just milking the existing market.

On the strategic side, things don't change every day, but you have different markets, fast-changing markets, and established markets that don’t have many players. Things may not change as frequently for the latter.

Is being a CFO a scary job?

No, it's not, and it all comes with experience. I feel much more comfortable in my job versus my first CFO job which I got at 32. That was a bit scary.

What was it like getting your first CFO job at 32?

It felt like I had a huge weight on my shoulders. It took time to get used to the idea of the enormous financial responsibility I had.

How did that turn out in the end?

It was very successful. I had joined a company that was going through restructuring, and the restructuring was a success. I also gained a ton of experience in different areas.

Would you say fast-growing companies excite you?

Certainly. I enjoy dealing with different things every day; I’m not fond of routine.

 

If you were to give financial advice to entrepreneurs, what are the most important things that the CEO should keep in mind?

Practice frugality. Practice smart investing.

When dealing with money, how granular does a company get?

It depends on materiality. For instance, in a $500-deal, $100 is material to that deal, but in a $500 million-deal, $100 is nothing. Focusing on materiality is what helps you think strategically.

Describe yourself in three words.

Future. Experiences. Fun.

 

Michael Matias. Photo: Courtesy Michael Matias. Photo: Courtesy Michael Matias. Photo: Courtesy

Michael Matias, Forbes 30 Under 30, is the author of Age is Only an Int: Lessons I Learned as a Young Entrepreneur. He studies Artificial Intelligence at Stanford University, while working as a software engineer at Hippo Insurance and as a Senior Associate at J-Ventures. Matias previously served as an officer in the 8200 unit. 20MinuteLeaders is a tech entrepreneurship interview series featuring one-on-one interviews with fascinating founders, innovators and thought leaders sharing their journeys and experiences.

Contributing editors: Michael Matias, Amanda Katz

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