Mark MacLeod has seen the finance world from just about every angle, and he’s got no time for B.S.
“I’m 52, I know exactly who I am, I don’t feel like compromising, and I have no time for a**holes,” he said in an interview with Retained Learnings. “Life’s too short.”
MacLeod also knows exactly what it takes to build a winning company. He began his career as a CPA in auditing and then moved into corporate finance before making his way into the tech industry. After a series of finance lead and CFO roles he eventually landed the top finance jobs with some of the country’s biggest names in tech, including FreshBooks and Shopify, before dabbling in investment banking.
In this interview, he reflects on his lifelong experiences in accounting and finance, career transitions to becoming a coach to CEOs, and best recommendations for finance leaders to level up in their performance.
From music to mathematics to moneyman
MacLeod says he first fell into accounting as a high school student trying to make sense of a world that couldn’t be more different than the one he knew growing up. MacLeod was born and raised on a small island in Scotland, and immigrated to Canada at the age of 11. As a kid from a poor family with a funny accent he spent much of his high school years seeking logic, patterns and things that just made intuitive sense, which initially led to music. At the time the longhaired drummer, like many aspiring rock stars, had little interest in academics.
That all changed during the final year of high school when MacLeod took an accounting class and immediately saw parallels with what was then his primary passion. “I’ve often felt those two worlds were very aligned,” he said. “Music is highly mathematical, and highly structured.”
Accounting also came with another perk; unlike most academic pursuits the university program included a co-op, which allowed MacLeod — the first in his family to attend postsecondary — the opportunity to earn tuition money from articling while pursuing his degree.
MacLeod graduated from Brock University in 1995 and earned his CPA designation in 1995, then spent a few “boring and painful” years in auditing before transitioning into corporate finance. He’s been studying what makes businesses successful, or not, ever since.
“That’s what made it interesting for me,” said MacLeod, who recalls taking his clients’ paperwork to restaurants after work to study their financials, challenging himself to determine their break-even.
MacLeod got his first opportunity to join the high growth start-up world in 1999. “I ended up helping a client raise a Series A funding round, and then joined them as their first finance leader,” he said. While working for the start-up MacLeod also pursued his MBA at McGill University, a decision he came close to reversing at least three times before eventually graduating in 2003.
During the pandemic MacLeod, like many, took some time to reflect on his career, and concluded the aspect he most enjoyed were the one-on-one coaching and advisory conversations with business leaders. That is ultimately what inspired his latest career transition.
“I bought my first book on coaching back in 2002 and concluded that I lacked the gray hair and moral authority to crush it as a coach,” said MacLeod. “You can be the judge on moral authority, but I’ve got some white hair now, so I can check that box.”
Now, as an executive coach, he’s sharing his more than 30 years of experience, a series of battle-tested guiding principals and his no-nonsense attitude with those who need it most. MacLeod says his role as an investor and coach has provided insight into how expectations of finance leaders have evolved since.
The role of the CFO is expanding: Here’s what to expect
“There’s been a huge expansion of the CFO role over the last few years, and it’s something I welcome,” he said. “More and more businesses are data-driven, and I think the CFO’s role is to be that one source of truth for all the different functions of the business, and help them make more data-driven decisions.”
At the same time MacLeod says finance leaders are under greater pressure today, especially given the current state of the market. He explains that start-ups and tech companies are under more financial scrutiny, particularly those that raised capital in the overinflated pandemic market. The cooling of capital markets, coupled with the rising cost and competitiveness of talent, has put an onus on finance leaders to improve operational efficiency across the board.
“There’s a huge imperative now to find ways to do more with less,” he said. “Reduce headcount, eliminate things that aren’t adding value, automate, streamline and generate more revenue per employee than you had done in the past in order to rationalize your business model and get the margins back.”
MacLeod adds that such responsibilities go well beyond those of finance leaders of the relatively recent past. In fact, when he began his career professionals like himself were expected to stay in their bean-counting lane, which usually didn’t include a seat at the decision-making table.
“Finance used to be quite distant from the business, and didn’t deeply understand how the business works,” he said. “Now finance needs to deeply understand how the business works so it can be a trusted advisor to every function.”
Crafting a distinct leadership edge: It’s about guiding principles
MacLeod is accustomed to balancing his responsibilities as both a departmental leader and a top advisor. Using that influence responsibly is also something he takes from his side-career as a DJ, which he developed in parallel with his day job.
“When I’m DJ-ing I am in complete control of that room; I decide when we go up, I decide when we go down, I will look at a track and instantly know ‘yeah, that’s going to work,’” he said. “As a CFO you need to have deep command and mastery over the business; you know all the knobs and levers, you’ve got the early warning signals, you know exactly how it works so you can be a sounding board to the executives of the company.”
Whether making music, practicing yoga, martial arts or cross fit training, serving as CFO, running a venture capital firm, or coaching business leaders, MacLeod doesn’t believe in putting in any less than his full effort. He continues to preach the value of mastery — and the idea that all pursuits are a journey with no final destination — to the executives he coaches and the artists he signs to his record label, Deep Down.
As someone who has always sought out logic, structure and predictability — and as someone who has been entrenched in the startup world for over 30 years — MacLeod has developed a few guiding principles that, when applied correctly, can be instrumental to a business’s success.
At a very basic level he says companies die when they run out of money, simple as that; everything else in an organization’s early days should therefore come second to literally buying time. “You can keep screwing up as long as you have money,” says MacLeod, adding that having more runway allows the business to keep working towards developing a winning formula. “When you have a proven repeatable machine and the market is pulling you, go as aggressive as you can.”
MacLeod adds that CEOs and executives can’t unlock the full potential of their business until they develop that repeatable recipe for ongoing revenue growth, the importance of which can’t be overstated.
“In my experience, the rate of revenue growth is the single biggest driver in valuation — it is the thing that attracts investors, it attracts ambitious talent, it attracts strategic partners and buyers — it’s a magnet,” he said. “Unlock revenue growth in your business, and hang on for dear life.”
MacLeod adds that his responsibility as a coach is, in part, to teach executives how to cling to the rocket ship as it’s taking off. Specifically, he says CEOs and executives must learn to grow their own expertise at a pace equal to or greater than the growth rate of their business, or risk dragging it down.
“If your business is doubling every year, then you need to at least double as a leader, so that you are as effective in a year from now as you are today,” he said. “You look at all the biggest outcomes in the start-up world and they tend to be founder-led start to finish, so there’s a 100% correlation between your performance as CEO and the outcome of the business. That, to me, is the purpose of coaching.”
“In my experience, the rate of revenue growth is the single biggest driver in valuation — it is the thing that attracts investors, it attracts ambitious talent, it attracts strategic partners and buyers — it’s a magnet,” he said. “Unlock revenue growth in your business, and hang on for dear life.”Mark McLeod
The power of professional coaching
When MacLeod left his job in corporate finance to help a start-up raise its Series A he had high hopes for the company, which he describes as “DocuSign, but two decades too early.” Its ultimate struggles demonstrated the importance of timing, a lesson MacLeod carries with him to this day.
That’s why, despite having an interest in coaching for much of his career, he felt the timing was finally right in 2020. Not only was he confident in his own potential as a coach, but MacLeod says he had also witnessed how the industry’s attitude towards the practice has evolved since he began his career.
“Back then it was a stigma; If your board said ‘hey, I think you would benefit from working with a coach’ it was perceived as ‘you have a deficiency or are lacking in some way,’” he said. “What CEOs are coming to realize is this is actually just a key tool, given the expectations on their shoulders.”
MacLeod explains that the CEO who raises a $30 million funding round should dedicate the same resources towards their own development as a professional athlete that earns $30 million in salary. They should also strive to put in professional sports-level care when building out their team.
The CEO-CFO partnership
When it comes time to pick their finance leader — which MacLeod believes shouldn’t be given a CFO title until the company is mature enough to truly need one — he advises CEOs to find someone with complementing strengths. He explains that there are two kinds of finance leaders: “technicians” like himself, who typically come from a CPA background and have a strong understanding of accounting and finance rules; and “deal makers,” who typically come from a venture or investing background, and are more focussed on strategy.
MacLead advises CEOs to pick their finance leaders based on the kind of expertise they need at their disposal, and to help fill any gaps in their own expertise. “Either persona can work,” he said. “It’s about assembling a complete team around the strengths of the leader.”
Beyond numbers: What it takes for finance leaders to master their role
No matter their background, however, MacLeod believes all finance leaders need to master more than just finance, and seek to really understand how the business works. That, he says, will eventually enable them to create a dependable, repeatable formula, akin to a math equation or a piece of sheet music, that just makes sense.
“You need to understand, for example, that for every 1,000 customers we add we need a new customer support rep — you need to figure out that formula so that you can turn the business into a recipe,” advises MacLeod. “That’s why it’s not enough for a finance leader to only know finance; you actually need to have some base level understanding of all the other functions.”
Being a well-rounded finance leader isn’t limited to business operations, either. MacLeod knows how hard it can be for executives to pull themselves away from their work, but cautions against that sort of isolation. He explains that the industry has long maintained an unhealthy culture of fetishizing work, but has some hope that the pandemic gave everyone, including those at the top, the opportunity to re-evaluate what’s important in life.