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Rich Zhou

Plug-in Finance Department and CFO for startups, so they don’t have to build and hire a department themselves. Our plug-in finance department handles everything from the ground up (bookkeeping to corporate accounting to FP&A, CFO, fundraising, etc.). We are 70 per cent cheaper than having a full-time finance department, and best of all, we don’t need training or hand holding. This frees up more time for the founder(s) to focus on what drives their business’ top line: sales and technology.

Tell us about yourself?

I started my career at RBC capital markets and went into corporate finance in various industries. I was the first full-time finance hire for a leading Canadian Challenger Bank fintech company called KOHO which is backed by the Desmarais Family’s Portag3 Ventures, the venture arm of Power Corporation of Canada. Previously, I was the Finance Manager in charge of Walmart Canada Bank’s multi-billion dollar credit card portfolio, which was later sold to Stephen Smith (First National) and later rebranded to Duo Bank. I remember when I showed up on my first week at KOHO, there was barely a financial model present. It was more like napkin math. The general ledger was unorganized. The contractors and bookkeepers simply did not care, nor were they closely vested in the business to know what was going on. It was 2016, and the startup industry was “red hot”, which meant that a lot of companies could raise money on napkin math. That is no longer the case after WeWork, Uber, and the latest FTX blow-up. Investors want financial transparency and governance, and startups will be scrutinized more for the capital they want to raise. This can be said for a lot of our clients who contacted us after realizing that a bookkeeper, fractional CFO (mid-retired execs), full-time finance manager, and Big4 accounting firms could not help them.

If you could go back in time a year or two, what piece of advice would you give yourself?

The best advice I would give myself is to work with people who want to work with you. I was eager to build a business and was very assertive in my sale approach that we picked up some clients that did not value great accounting work and thought we were relatively expensive. Never sell something that people are not looking for. Ironically, the best clients are the ones that got burned by not having readily available financials for investors or tax filings. They are convinced of the importance of accounting only after they lose opportunities because of the lack of it.

What problem does your business solve?

Once a startup grows past its seed or infancy stage and reaches annual recurring revenues of $1 million, they find out very quickly that they need to manage the business from a financial perspective rather than flying blind like in the past. They not only need financials for external reporting and tax filing, but most importantly, they need to understand their position for making decisions for hiring, marketing, sales, etc. That is also when they notice that the $200 per month bookkeeper that is halfway around the world will not be sufficient and that hiring full-time finance professionals and execs will only take away the necessary cash flow for driving top-line sales. Not to mention, they’ll need a full-finance department because one person cannot handle all of the work required. We offer that Plug-in Finance Department that fills the gap until they can one day afford to hire their own internal team.

What is the inspiration behind your business?

They say 95 per cent of startups fail. I have a passion for financials because it serves the cold, hard truth. I’ve worked for many founders, and many do not come from a financial background. They are very optimistic and confident and sometimes stubborn. As you know, there is a fine line between confidence and arrogance. Financial data helps us communicate the truth about what is working and what isn’t. I have seen financial data drive decisions and majority consent when normally, without the data, there would be conflicts of opinion. Ultimately, I believe startups can have a lower probability of failure if there is financial transparency and a “coach” like us to guide them,

What is your magic sauce?

Our magic sauce is our “white glove” approach. Most people think when you outsource a department, you don’t get the level of care you would expect from in-house staff. We do things a bit differently. We get all our clients in a group chat on slack, and everything happens there. We refrain from using email unless highly important. The frequency and closeness we have with our clients are very high. We’re always on top of tasks, 24/7.

What is the plan for the next 5 years? What do you want to achieve?

The vision is to create a strong brand that, when startups start scaling, they think of “Aquifer” for their financial reporting shortfalls. We would also like to gain more Venture Capital clients as they would benefit from their portfolio startups having more financial transparency in terms of risk mitigation and fund performance reporting.

What is the biggest challenge you’ve faced so far?

We get referred every week to a startup, but some are too-early stage for us. They feel we are expensive and unnecessary when, at the same time, they have a problem they do not want to admit. We’ve now pivoted away from the early seed stage companies and focused on “late seed stage to Series A-B with $1 million ARR”. That way, we can charge for the level of care we provide, and they can financially sustain this level of service.

How can people get involved?

If you are a startup founder/co-founder looking to have your financial infrastructure installed for future fundraising and even day-to-day management purposes, please contact our Account Manager, James McBride –