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In this episode of ‪What Worked, Tyler interviews Philip Kean, Managing Consultant at Lane Gate Advisory, a fractional CFO firm with a focus on treasury and cash management services.

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Philip shares his insights about:

• Accidentally getting into finance with a real estate background
• How startups miss out on free money through banking mistakes
• The platforms he uses to get his clients on the right track

We'd love for you to connect with us:

• Mike Wu‍
• Tyler Rachal
• Philip Kean

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Transcript edited for clarity:

Tyler Rachal

 Welcome back everybody to another episode of America's favorite podcast, the world's favorite podcast. No, I kid, but, we are small and mighty what works podcast. I'm back with an amazing guest today in Phillip Kean. Phillip, we played the small world game. We had the boarding school connection. You went to Lawrenceville, if I'm not mistaken. 

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Philip Kean

Lawrenceville.

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Tyler Rachal

That's right. And then we've got some shared connections. So shout out to anybody who's listening to this who went to Lawrenceville with Philip. And then also I think we have some wonderful crossover. went to Deerfield Academy. Boarding schools, it's a lot like Hogwarts, right? We're all connected in that way but I am thrilled to welcome Philip. I have been getting to know Philip and his firm, Lane Gate Advisory and through our work here at Hireframe, we work with a number of fractional executives and Philip has a tremendous business. 

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Rather than me bastardizing it and trying to explain it myself, I will ask you, Philip, would you mind sharing a little bit about what is Lane Gate Advisory? What do you guys do and who do you do it for?

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Philip Kean

Sure, yeah. Lane Gate Advisory does two primary things. We do traditional fractional, I say traditional, I guess fractional CFOs have only been around for like three years, so not that traditional. But we do traditional fractional…

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Tyler Rachal

Traditional enough.

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Philip Kean

Traditional enough fractional CFO services, primarily in the tech sector, a little bit media entertainment, prop tech as well. And we also do something called Treasury as a Service, which is cash management, FX execution, everything that you'd expect to see in a large organization in terms of a treasury function we bring to smaller companies who've raised VC capital, might have FX needs and are being kind of underserviced by their incumbent banking partners. We've been doing it for about two years. It's been really exciting. Lots of different companies doing different things and lots of varied engagements, which always keeps things interesting.

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Tyler Rachal

Very cool. And yeah, two years in, especially they say the same thing for startup time, right? Two years in is effectively a lifetime. So congratulations on making it two years. A lot of people only make it a few months. I want to put a pin in you mentioned sort of providing these treasury treasury and cash management services to startups, which is effectively kind of a little bit of an underserved market. I want to get back to that. So we will get back to that. 

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But before we jump into that, I am just curious how the heck you got started in this. Where did your experience come from in banking specifically?

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Philip Kean

Sure, by accident. So I studied history, went to a bit of a party school, College of Charleston. 

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Tyler Rachal

Oh, that's right. Yes.

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Philip Kean

So saying I studied history is probably a little generous. 

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Tyler Rachal

The history of The history of beer.

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Philip Kean

That's right. But after graduation, I moved to New York. I’m from New Jersey so I did as everyone else from New Jersey does and moved to the city. I worked in commercial real estate for a few years. This was in the heady times of 2005 when I started. And then the world kind of ended in 2006, 2007, 2008. And I was just a little bored not having that much to do in the real estate space and hopped on a plane to Abu Dhabi, Dubai, actually, originally, to work in private equity real estate. Lehman happened like two weeks after I landed. So Dubai was kind of dead almost overnight. Ended up at a company in Abu Dhabi doing similar institutional real estate work. 

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And then one day the treasurer was let go. They were a quasi sovereign entity, so a high credit rated entity. And they needed to raise around one and a half billion dollars in bond financing from international institutional investors. And they kind of just pointed at me and told me to do it. And I still don't really know why, but in the Middle East, that's kind of how things work. Right?

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Tyler Rachal

Really?

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Philip Kean

Yeah, yeah, it's a very interesting environment, right? If you're capable, they kind of just throw things at you. And that's one of the things they threw at me. So…

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Tyler Rachal

Just a casual one billion, one and a half billion, hey, here, you do this.

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Philip Kean

Sure. That's basically exactly what happened. I didn't even know what a balance sheet was. I had never worked with banks. I was in a finance adjacent field in commercial real estate, but really, really not. And yeah for a few weeks, I didn't really sleep. I was just living and breathing loan documents and digesting investopedia, like it was breakfast, lunch and dinner. because I didn't know what anything meant. And, luckily, had some really good attorneys to lean on as well. A couple of weeks after that, we had docs and I was flying private with the sheikh across the U.S. and Europe doing road shows with insurers and bankers. And I've been in finance ever since.

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So bit of a roundabout way to do it. Definitely didn't have a plan, but I do find if you just take risks with your life and your decisions, as long as they're calculated, you can often be presented with cool opportunities like that.

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Tyler Rachal

And that is a cool opportunity. It's funny. I am mentoring someone right now, they're a college, junior, they're entering thei senior year next year. And they were asking me for advice, cause they're trying to get an internship right now. And it's funny because I found myself using the expression a lot, you just want to be in the room is what I always say. I think oftentimes people that are new to the work workforce, they're, thinking I have to work my dream job or the job that I think is my dream job off the rip. When I look back on my career experience, I think the most powerful experience and really where my foundation came from was just kind of literally being in the room for different things that were happening and learning that way. You were in the room and you were also in the private jet, which is pretty cool too. So that's incredible.

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I am curious, I was going to back up for a second because I worked in commercial real estate too. What aspect of commercial real estate were you in?

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Philip Kean

I worked for a company called Massey Knakal Realty, run by this guy Bob Knakal, who's kind of a real estate influencer on LinkedIn now. It was subsequently purchased by Cushman Wakefield. 

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Tyler Rachal

Okay, sure, yes.

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Philip Kean

I did building sales in New York City, specifically in North Brooklyn. So Williamsburg, I'm sure you know, is a very hip neighborhood. That was like the territory I covered. It was up and coming, it had already kind of arrived by 2005. So I was selling multifamily, mixed use, industrial buildings to investors. Mostly what I was selling and valuing were ground up development sites. If you go to Williamsburg now, it's all condos and new construction. That wasn't the case then. It was kind of old warehouses and ramshackle multifamilies that have since been redeveloped.

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So yeah, I mean, that was great. It whipped me into shape as well, having really enjoyed myself in university. I had a boss who was very demanding, but who I also got along with really well. I got a lot of really good habits doing that.

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Tyler Rachal

I'm connecting the dots here because now it makes a lot of sense. I too worked in commercial real estate when I first graduated, had a degree that was very different from what I ended up doing. I guess the most relevant point was that within my school, there was a planning and development part of it. So kind of urban planning, but I sold industrial in Northeast Philadelphia. And yeah, I just remember getting almost an MBA on the streets in terms of a lot of the stuff related to finance and numbers that I did none of that in college. I too studied the history of beer in college and the value and importance of people that are willing to take the time to explain things to you, I just think that's, that's huge. And now it all makes sense. How you were able to take that opportunity in Abu Dhabi. 

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Okay. So circling back, you got this great experience and you really started to get a familiarity with banking. So with Lane Gate right now, you're serving startups and you mentioned they're an almost underserved market in terms of banking. What is it that is happening with startups in that regard? How are banks not serving them and where are you filling the gaps?

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Philip Kean

It's kind of twofold. It's banks not really serving them, but it's also companies in the tech sector and financial people working for those companies that don't really know how to identify the banks are underserving them. So there's lots of opportunities. It can be as simple as let's say I'm XYZ incorporated and I just raised a $30 million series A round. and one of my investors, strongly suggested I open an account with JP Morgan. This is one anecdote that I see a million times a day, JP Morgan doesn't really have a really great tech coverage group at all. They don't have good relationship managers. They'll kind of stick you with someone who's been out of college for two years. They'll give you a bad money market product with high fees and only options to kind of use one of them. It's, you know, they're kind of online portals from the Stone Ages and doesn't integrate well with modern tech. Let's say you also have a need to purchase foreign currency because you have a subsidiary in Estonia where your R&D team sits or something like that. JP Morgan's not going to tell you, you can just get access to our Spot FX currency desk and book trades at market. They're going to say, just set up a wire to your Estonian entity and you can do that every month you need to make payroll. But what they don't tell you is like they're charging 3 % on every transaction that goes cross border. They won't tell you that you're under earning by 20 basis points versus other almost identical risk-free overnight instruments. They won't tell you that if you need to borrow money in two years, they have no balance sheet for a company in your sector.

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And you won't know any of those things because if you're in tech, chances are you've never worked in a cash management or treasury capacity. You've worked in financial planning and analysis, or you've worked in controllership, which is all really important, particularly FP &A for a startup. But you could be leaving a lot of money on the table. 

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As an example, I was the treasurer of UiPath. Huge company, it went public in 2021. They hired me not by mistake, but they had a CFO who was kind of not super experienced and had advice that they should hire a Treasury person. If I had a US based CFO who'd come from that traditional FP &A background, they would have been in the mindset that you don't need any Treasury help until you're a public company. But what I was able to do in like two weeks is find $600,000 in annual savings on FX trades, reallocate their cash so that they got an incremental million dollars a year in risk-free interest and like 20 other things. Just because that's something I know how to do. And we take that to tech companies all over the world right now. And there's like 20 other things I could list that are just ways that are just low hanging fruit to add a lot of tangible value.

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Tyler Rachal

Found money. Incredible. And I get all of that because I'll just say as a startup founder, can I take it one step further with a JP Morgan or some similar ilk is I just don't think they care. It's just you're just such a small part of their business that it's reflected in, no knock on the many great people I'm sure that work at those businesses. But it's very clear that so many of them, you described it perfectly, they're one or two years out of college, they're still learning so much. They have roles that are like advisor manager, whatever, and they can't really advise you on anything. And that's not a knock on them. Their company is sometimes so big, they can't really do anything. 

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I will actually circle back on that. You mentioned that their VCs are telling them to set up that account. Is it because of stability? Is it because of the Silicon Valley bank fiasco?

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Philip Kean

Yeah, it's definitely a reactionary measure from what happened with SVB. But there are other banks with the same credit rating that JP Morgan has. So basically, what they're saying is like, move your funds to a higher credit institution where you're not at risk for a run on the bank. So sure, JP Morgan ticks those boxes, but so does HSBC. So does Fifth Third Bank. There are a lot of single A credit banks that are much better positioned to help you as a startup. Some of the silver lining about what happened with SVB is there's this huge SVB diaspora at a handful of banks where really great relationship people have gone and kind of made their own imprint on these older institutions. That didn't really happen at JP Morgan. It did and a lot of them have left. And I just think that the ticket values of these deals are just too small for them to have given it the attention that they should have. 

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But you've got like an HSBC has got 75 plus people from SVB and all really great people who understand the credit of a startup.They also have really good money market products. They've got a balance sheet for venture debt. They've got an international footprint. So it's not to say that if you're a startup, moving your money to HSBC is going to solve all your problems because you're still going to be leaving money on the table if you don't really know what you're doing. But it's certainly a step in the right direction. But yeah, at the end of the day, you should be diversifying like where you keep your cash. There's some really cool tools, most of them are free. It's just about knowing how to find them and leveraging them to the best of your ability.

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Tyler Rachal

The knowing how to find, I think I can't emphasize that enough as a founder who's dealt with a lot of these issues. I think that this would be my infomercial for your business. I think that this information is relatively hard to find, hard to make sense of and having someone like yourself, who has I’m sure relationships, firsthand, working knowledge with a lot of these groups. And then also you're aware of the tools that's half the battle right there. 

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I will ask, so you have some really cool points here in terms of your personal experience, I'm picturing you in private jets with sheikhs. I'm picturing you with the CFO of UiPath, as you guys are looking to go public. And then now I'm also seeing, you mentioned Estonia, so I assume you're working with a lot of startups of varying sizes and they have entities and people all over the world and everything like that. What is the lesson that you've learned working with all these different types of personalities, success levels, size of business, etc, etc. Egos. What have you learned in terms of working with these folks?

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Philip Kean

Yeah, just don't be afraid of anyone. Try to be an open book whenever possible. Try to be really amenable. I think no matter who you're talking to, if you can employ kindness, humor, and empathy in those conversations, it's very disarming to them. And you're going to be able to accomplish whatever you set out to accomplish in the first place.

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But if you're in Romania or Estonia or New York, you're all just people. So just try to work with one another, try to structure your engagements so that you can work efficiently with one another and don't keep it all to business, right? Get to know who you're working with, even if they're two levels above you or five levels below you. Be a human being. If you're smart and you know what you're doing, you'll get good results. But just be a kind, empathetic person throughout the process, and people will really take to that, I found. Yeah.

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Tyler Rachal

Yeah, that makes complete sense. And I will say, I'm smiling because I know a little bit about you. I feel like this doesn't just stop with Lane Gate and your clients. You're invested in the local community and I'm sure you kind of bring this. You're a firefighter. What does your hat say? Is it a firefighter…

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Philip Kean

It is, yeah. Cold Spring Fire Company number one.

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Tyler Rachal

Okay, cool. There you go. So you're an active firefighter in your local department.

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Philip Kean

Correct.

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Tyler Rachal

Amazing. Where does the connections also between your Lane Gate life and that and what you've learned? How do you apply that to a totally different place?

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Philip Kean

Sure, I'm a firefighter, I'm also their treasurer. 

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Tyler Rachal

There you go.

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Philip Kean

So I have taken a lot of my own lessons that I've learned to that voluntary role. I shouldn't say voluntary, I was kind of volun-told to take that role by my chief.

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Tyler Rachal

I imagine there's not a lot of Philip Keans that walk into a fire house. So I would, if I was your chief, I'd be like, yeah, buddy, you're going to do this, cause we have to have you do that.

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Philip Kean

Sure. So yeah, any tool that I use, especially free tools with my clients, not just on the treasury side, but on the fractional CFO side as well. I immediately on week one started using those in the fire company. Ramp is a great one, I'm sure most of your listeners use Ramp or have used Ramp in the past. 

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Tyler Rachal

We're ramp users, so yes.

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Philip Kean

I'm also on the board of my local library. I manage their endowment. And anytime I look under the hood of any of these small and local businesses or municipal services or whatever. They're doing business like circa 1996. Everything's on paper checks, the accounting is all wrong, everything is in person. It's just really, really antiquated. They're banking with local credit unions who have effectively like junk status from a credit perspective which right now in today's insane market is not really where you want to be keeping your cash because it might not be there in a few months

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Tyler Rachal

Yikes, yikes, yikes, yikes.

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Philip Kean

So yeah, I take what I've done on a macro level down to the local level, right? So it's killing all paper transactions when possible, getting them safer and higher yield investments in treasuries versus like the Hudson Valley Credit Union, two months certificate of deposit.

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Tyler Rachal

Yeah, no knock on them. Good people at the Hudson Valley Credit Union, but you know, just not gonna get you the yield that you're looking for.

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Philip Kean

That's right, they're very lovely people. Yeah, they'll get you the yield. It's the risk, it's the credit exposure that you need to worry about. And yeah, I mean, even just like processing invoices, you name it, like everything can just be automated. And none of these small local groups know how to do that. It's probably if you take it at a national stage, multi, multi, multi billion dollar opportunity, I'm sure someone will figure it out at some point.

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But it's nice to be able to help them at least, you know, one group at a time. Because no one in a fire department wants to be spending 10 hours a week processing invoices and booking transactions and QuickBooks. You know, you want to be out helping people and doing drills and all of that.

Tyler Rachal

Yeah. And as a taxpayer, I would hope they wouldn't be doing that stuff. Right. So anything that keeps them literally out of the books and out there in the world helping people. That's what I would want to support.

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I'm curious. How do you think this is probably a hard departure, but you mentioned billion dollar opportunity, right? And when we talk about massive opportunities right now in anything it's AI, AI, AI, AI. How do you think about AI as it pertains to your business? And more largely, where do you see the opportunities in AI for finance, cash management, treasury, et cetera?

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Philip Kean

Yeah, mean, the opportunities are endless. You've got a lot of tools right now, which have a lot of AI embedded in them. I've got two off the top of my head that are going to be total game changers that I'm already using fairly regularly. The way I think about it is obviously automating all of the annoying back in mid-office-y things that you need to think about and worry about and get done in a finance function just to keep the lights on and to keep people getting paid. And then two, it's around analytics and getting answers from your data quickly without spending a million hours trying to figure it out or asking someone to figure it out for you. 

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So there's a lot of really smart products. Rillet is a new ERP, which I'm kind of obsessed with right now. And it is like a QuickBooks, not only QuickBooks, it's a QuickBooks and NetSuite killer. You could start out with real it and take it through to a public company, I think. Even if you start with the platform at Series a or Earlier.

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Tyler Rachal

I have not heard of this I'll check them out, but that's so cool

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Philip Kean

It's great. It automates a lot of your SaaS reporting directly out of your financials. It's got embedded project management functionality that will first, it's smart enough through its AI to auto code the bulk of your transactions. And then it will project manage the close process for you. So that instead of closing after 10, 15, 20 days, you can do a 15-minute exercise once a week and be closed pretty consistently inside of the first business day of every month. And if you want to ask it questions, you can ask it questions, and it will give you typically really good answers about your numbers. 

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Tyler Rachal

So cool.

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Philip Kean

It's really cool. It integrates with all the other platforms that you typically see in a tech stack for a tech company with a finance organization. So it's tools like that. Tabs is another one. Tabs is like a RevRec and revenue and cash forecasting and accounts receivable automation platform. These are all things that give finance people headaches. And they're also things that finance people don't want to be doing. They're smart enough to do a lot of it for you. So I'm just excited about anything that eliminates something I hate doing.

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Tyler Rachal

Yeah, I can see the smile on your face and I'm nodding too. It makes complete sense in what you're mentioning because that's pretty much all of our customers, we're staffing resources that are taking a lot of those headaches. For the conversation around AI and my business, people ask all the time, are you nervous that some of these roles you're staffing are going to go away? It's not even a question of if they will go away. It's when, they will certainly go away. But, the opportunity that I see is, hopefully if AI does what it's supposed to do, we're all going to have a lot more time to tackle things. And then the question becomes what can we do with that time when we're freed up? I see the same opportunity. We're entirely focused on the human part of the the cycle, right? And if there's a world where no humans are needed, guess what? It's not just Hireframe that’s in trouble. It's all of us, probably, unless there's gonna be some sort of magical government stipend we're all gonna receive where we don’t have to work. 

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But the way that I see it is that my focus is really on, I think that there's a tremendous opportunity also with AI to really level up people and sort of take away some of the gap. So whereas people really would be like, I'd never staff this position outside of the United States. I think that's going to erode over time because there's going to be so much available in terms of what you talked about, the ability to ask questions, analysis, and all that sort of stuff. I just think there'll be a leveling of the playing field where the way in which we build companies will become a truly global thing versus just a local thing. Anyway, that's my little my little soapbox on AI, but it's gonna be interesting

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Philip Kean

I couldn't agree more. And it's also, by the way, a story that's repeated itself, since way before the Luddites. People always find a way to elevate themselves with new technology coming on board. And I totally agree with the global organization thing as well. I mean, I was fortunate to live overseas for eight years. I've worked for companies with huge global footprints. They're really good people all over the place. 

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Tyler Rachal

all over the place and a lot of similarities between all of us.

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Philip Kean

And as long as you treat them like good people, which they are, and unfortunately, not everyone out of the US will do that, you'll realize that you can get just as good of a product and outcome from them as if not better than a 3X more expensive individual here. Yeah, there's just a big soup of smart people on a global stage. It just gets more developed in terms of how they can work with each other successfully with every day that passes.

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Tyler Rachal

Without a doubt. And I think you're totally right when you say people always find a way. I just think that what we're in the midst of is we're in the midst of a transformation, a change. We're all reinventing ourselves, it's just you have to think differently. Anybody who is in the workforce here, at least in the US I'll say, and you're doing a job that you would describe as mindless, you really should think long and hard about what it is you want to do, in the future. How are you going to kind of reinvent yourself because that work is definitely going to change dramatically. 

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I do want to kind of close things out with a couple of things. I want to first give you the opportunity to do what I always call it like an infomercial. If somebody is out there listening and for Hireframe, we work with a number of startups. So I'm happy to pass along your information to all those folks, but if anybody is listening and they're considering why should I work with Philip and Lane Gate, what is a quick little elevator pitch for your business?

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Philip Kean

Sure, so this is the, but wait, there's more pitch. But wait, there's more. 

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Tyler Rachal

That's right. But wait, there's more. Yeah, exactly.

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Philip Kean

Yeah, I think I bring a lot of really good experience to the table, obviously. There are a lot of fractional CFO firms out there. There are not a lot of people doing treasury as a service out there. So you kind of have to bifurcate my little infomercial here. From a treasury management perspective, if you're sitting on a bunch of cash or you have needs in foreign currency, the value prop is pretty simple. If you want to make a bunch of free money without taking on any risk, probably even reducing your risk, that's a pretty achievable outcome in 85 % of the companies that I talk to. And it's something that I can quantify inside of 20 minutes in real dollar terms. Those are the really fun conversations to have because it's do you want $200,000 that you didn't think you were going to get this year? Give me a couple of weeks and I'll get that set up for you.

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From the fractional CFO side, we've got bandwidth for more customers. It's me. I've got a couple of former UiPathers working with me as well on that. Collectively, we have 40 years of experience in startup finance. We've raised $5 billion plus in equity capital, $5 billion plus in debt capital. And we've got a really cool productized approach to FP&A, which means our clients get a really great financial product, which is inclusive of world-class reporting, an awesome budgeting tool, and then access to people who've kind of seen it all. Everything from pre-seed to post IPO companies across multi-sectors. We can add a lot of strategic value and we do. You can just have to talk to one of our existing customers to confirm that, which they're all very happy to do.

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Tyler Rachal

Amazing. And I would say this, I've spoken now to a lot of fractional CFOs and I could say that your offering truly is different for those two reasons. It's the treasury and the cash management piece, which honestly, I just haven't heard people talk about. And I would just say as a founder, who's worked with one of those big banks, I will cut this infomercial for you. If you are a founder out there and you are working with one of these giant banks, guess what, buddy, they don't really probably care about you. And there's probably some really easy ways that you can get, just honestly, better service and better outcomes with Philip. So you should definitely hit them up. 

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And then I love the mention about the productized approach. When I talk to fractional CFOs, this is my criticism for anybody who's basically a consultant and advisor. It's very tempting to fall into a hole of being just so, so generalized and vague that it's like we help anyone who needs anything. And I really liked the fact that you've really narrowed it down to some tangible things they're going to get from you. You mentioned the budgeting tool. You mentioned the reporting. And then access to people that have experienced a lot. So, huge plug for Lane Gate.

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Last thing I'll ask here is that you've got a couple of things, right? You've got Lane Gate, you're a firefighter, you're helping out some local businesses. What do you want people to reach out to you for and where can they find you?

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Philip Kean

Yeah, they can find me through my website, is lanegateadvisory.com. They can email me at philip with 1 ‘L’ at lanegateadvisory.com. If they're interested in talking to someone about helping on the cash management front or fractional CFO front, obviously they can reach out to me. I like to have many hats at all times on my head. And even if they just have some interesting thoughts about what's going on in finance or the tech sector, always encourage people to reach out to me just to have a chat. Things are changing so fast. I find most things that are new and game changing just to be really interesting to discuss and to kind of dive into.

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Finance people aren't famous for being people people. I am probably a little bit different in that regard, I just love talking to people because.

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Tyler Rachal

Not probably, you are, yeah, definitely.

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Philip Kean

Yeah, you can learn something from any conversation with anyone, not anyone, but most people. So I just love to be connected in general to people in the space.

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Tyler Rachal

Yeah, you mentioned earlier humor and kindness. I don't know if I would think of those things with most finance folks, not a knock on them. I just feel like a lot of times they're just so singularly focused and dry that humor and kindness is definitely not something that comes across. If you are someone that enjoys working with people like that, Philip would be awesome. Thank you so much for coming on to What Worked. I really enjoyed the conversation and I hope, hope, hope anyone out there who's listening, please do reach out to Philip. He's down, sounds like always, at least for a conversation. And then you can go from there.

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Philip Kean

Thanks, Tyler.

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Tyler Rachal

You got it.

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