Andy Balchin: Without cash, you can’t run a business

After a few years my ambitions hadn’t yet been fulfilled and I made the move to Ashton Tate. In those days (1987) there were essentially three PC software companies – Microsoft (DOS operating system), Lotus (spreadsheet 1-2-3) and Ashton Tate (database – dBase). The move to Ashton Tate has probably defined the rest of my career – growth like I’ve never seen, extensive European travel and working for best Finance Director, Robin Taylor, that I’ve ever worked for.

After that I moved to Symantec, Electronics For Imaging (EFI) and then Documentum, SeeBeyond, Smartstream and now Clearswift. Each one of those companies has been a progression from the previous. There was certainly a time before SmartStream when I thought my whole works purpose was establishing and growing the European arm of a major US software company. Those were the days of working in small, single and very cramped serviced accommodation rooms with a diverse path-finding team of sales, technical and marketing people. To travel five days a week on a plane was common. We grew each of the US businesses at an incredible rate and were a fundamental part of allowing it to be sold on. One of my close ex-Deloitte friends says I’ve only made money through redundancy following takeover.

My biggest accomplishment, which I feel immensely proud of, is joining SmartStream as CFO; my first time as the number one finance person in the company. I joined SmartStream very soon after TA Associates (private equity) acquired the company. I was hired by Ken Archer, CEO, and he and I, in a strong partnership with TA and a great management team, took that company from £85m EV to £207m EV just 11 months later. In that short time I’ve never worked so hard, never learnt so much and never seen so many advisors! We went through the full main London Stock Exchange IPO listing process, only to pull it 11 hours before float. 

That was September 2007, just when the bottom began to fall out of the financial markets, so it was a brave yet correct call to pull the IPO. Instead we sold it within a month to the Dubai International Financial Centre (DIFC); an excellent yet appropriate return for a very profitable company growing at over 20 per cent and immensely fulfilling. A full listing process following a strategic/financial sale – and all within 11 months – while still having to operate and improve a growing business. Incredible.

In 2011 I was approached by Clearswift, via Lyceum and Martin Leuw. What an opportunity – another CFO role, private equity, in an organisation driven by innovation and at the forefront of adaptive data loss prevention within a growth environment. How could I turn it down? And at Clearswift we’re doing the thing I love to do most in business – drive profitable growth. And we’re well on the path to delivering.

What are the key challenges for an FD in a growing business? 

Ask anyone at Clearswift what Andy loves and they will all say cash. Andy loves cash. Without it you can’t run a business. In my mind there are three simple things to manage in a growing business – revenue, profit and cash. If you get those three things right – almost nothing else matters. Of course there are other things – building, maintaining and motivating a team, getting customer contracts right, ensuring that third party suppliers give you the best deal, understanding all your risks, but always keep the three fundamentals high on your list of priorities.

Any growing business must be nimble. Unless you are comfortable in a flat line business then you must always be prepared to change. Change is constant.
One thing I am absolutely not confused about and that is my role as CFO of Clearswift (indeed of any company) is about value creation and maximising shareholder value. Clearswift is private equity owned and they are super-smart people, so keeping up with them and keeping up with the pace of growth is a skill that you need to have. I think I have managed to disguise my lack of skills in that area very well.

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