- Working for a private equity backed company
- Risks associated with joining a startup
- The benefits of going small
- Public accounting misconceptions
Jack started his career at EY and is now a finance exec at a PE-backed healthcare company. Enjoy the read!
I went to Rockhurst High School in Kansas City and then Mizzou for college. My dad is in banking and I had several relatives in real estate, so I kind of knew that I was headed towards business school. When I got to Mizzou, the accounting school was the most prestigious part of the business school and I decided to go for that.
After graduating, I went to EY and spent about three years there. I then went from EY to a really small company that rents semi-truck trailers. I was there for about nine months, and then after that, I went to Rx Savings. I've been there ever since.
A couple things ultimately led to my decision to leave. First, the job at the trailer company was right in front of me, so the door was open for me to jump to something else really quick. I was hesitant until EY changed up my busy season.
I had a couple of local clients where I got pretty deeply ingrained. I really enjoyed doing one of them in particular, it was right downtown and I was able to go home every night. I had a couple bad experiences with long, endless road stints where I'd be gone for 8-10 straight weeks and knew I didn’t want to do another one of those. Heading into my fourth busy season, EY told me that they were putting me on a client in downtown Des Moines for the entirety of busy season. I think that evening I picked up the phone and called the guy at the trailer company.
When I was talking to them, it sounded like a pretty good business model. They would buy rundown semi-truck trailers, clean them up and then would rent them out where they would pay for themselves really quickly. They were doing a few million bucks of revenue a year.
I got them off QuickBooks. I got them on a new accounting platform, which took pretty much the entire time I was there. They did not have a company health insurance plan when I got there, I got that set up for them. I brought in a real payroll and timekeeping system for their employees to use. So I helped them bring the business into the modern era.
Then after I was there for about nine months, all these big tasks they wanted me to do were done. I wasn’t going to get long-term what I needed out of the company and I thought I was leaving them in a better place than I found them.
I started talking to a number of executives and investors around town when I decided that the trailer company wasn't going to be a long-term fit to see what roles they knew were out there. One of them was Rx Savings Solutions. I got in touch with their CFO, who's now my boss. We went and had coffee and had a great conversation. I had a job offer a couple of days later. A couple things really got me in the door there.
One of them was my experience auditing healthcare clients, so they liked to see I was familiar with the healthcare space. And then what I did at the trailer company by implementing a new accounting platform was important. At the time Rx Savings was also on QuickBooks and the CFO wanted to get on a real system.
I came in and started looking at new accounting software and did the implementation. Being at a small company - I was employee number 50 at the time - there were a lot of day-to-day responsibilities coming my way pretty early on. I was part of the process of selecting the employee benefit package every year. I got involved in high-level strategic discussions early on. A lot of that is kudos to my current boss, who just threw me into the lion's den and said have at it.
I was promoted to Controller after I’d been there for about 18 months and then started to build a team under me. As the finance department has grown with the organization my role has just continued to grow. Now I'm the Executive Director of Finance. Things are going really well.
Rx Savings Solutions was started by a pharmacist by the name of Mike Rea who is our current CEO and founder. When Rx Savings was conceptualized, he was working as a pharmacist. He'd get a lot of people in on a daily basis that voiced their concerns about how to pay for their medications.
One of them was a lady by the name of Betty. She had an unexpected expense come up, I believe it was to help pay for the funeral costs of a family member, and she didn't have enough money to cover her meds that month. She asked Mike what she could not take for a month or two and not die. That hit Mike pretty hard. He went home that night and called a bunch of pharmacies that were still open, mostly on the west coast and Hawaii, and got pricing for alternative drugs that did the same thing. The next day, she called her doctor with the list Mike put together and the doctor agreed to switch her on all of them. She went back, filled it with Mike and I think it saved her a little over $3,000 a year just to make that switch on those meds. As a result, she was able to keep taking all of her meds and cover the unexpected funeral expenses.
Fast forward and he teamed up with software engineers to turn what he did overnight in a matter of six hours into an algorithm that does it in a split second millions of times a day. And that's what Rx Savings Solutions is today.
Overall, it’s like you have a few different bosses and some of them don't work at the company. For me I have the CFO, our executive team, and I have the PE guys that are an external party that I am spending part of my time with - completing reports, being on calls, doing work around tax matters. It just adds another layer of people that I have to report to on a monthly basis.
Also, working with PE firms you never really know what you're going to get. Sometimes it's a quick conversation and then other times they could grill you out of nowhere, which keeps me on my toes. This ultimately makes us a better company and they make me a better individual by holding me accountable.
As far as risks go, use your best judgment when evaluating a startup. Get all the info you can on their financial well-being, and try taking an objective view on whether they have a good product or not. Is it something the market really needs, or something you would buy personally? Just because a company has PE backing doesn’t mean it has a product worth selling. Also, don’t be afraid of losses, as long as they are manageable. I was very used to seeing losses after starting my public accounting career in the late stages of the housing crisis. Rx Savings is a profitable company now, but it took us a few years to get there and having experience seeing losses on the P&L probably kept me from losing my mind in those early days.
The next thing to consider is who you’re working for. A startup will inevitably be more successful if it has strong and experienced leaders at the helm. My boss had a great career prior to joining Rx and I knew I could learn a ton from him. I definitely factored that into my decision to join the company in 2017.
The third important thing for a startup to have is a good story, like the “Betty Story” I mentioned earlier. A good story will expedite growth in a lot of different ways – great for PR, sales, company culture, etc. If a startup has all three of these things – solid product, strong leadership, and a compelling story – chances of the company being a homerun are high.
For me I wanted to grow with an organization. That was one of my things with EY - I still would have to wait for each promotion for a certain time period regardless of how hard I worked.
Whereas I knew if I went to a smaller company, I could grow with the company. I could build my own niche at that company. The whole career path structure was flexible and I could maneuver it the way I saw fit. If someone wants that kind of freedom and wants to blaze their own trail, the small company is definitely the way to go. I wanted to be somewhere where I could feel my work was actually contributing to the company’s growth.
Something I like to tell myself and sort of live by is that experience is not purely a measure of time, which is what they look at it like in public accounting. Experience is a measure of the opportunity you've been exposed to over a period of time. I am 7-8 years into my career. But what I've seen in that time could be equal to what another finance professional has seen in 20 years at a larger company. What I’ve been thrown at a smaller company, a larger company wouldn’t let a 20 something, now 30 something year old touch.
I wanted to get onto the finance side of things, but, once you transition from accounting to finance, you still always have to be able to sit down and have that debits and credits conversation - no matter if you're a financial analyst or if you're a CFO. If your CEO asks about something like revenue recognition you have to be able to answer that question. Public accounting, and the accounting education are the bedrock of being able to answer questions like that.
There's just a lot of opinions on how and when to leave public accounting - like the misconception that you have to stay 5-7 years to be successful.
What I would tell people that are trying to get out is don't be stupid, but don't be scared either. You just have to be smart about what you're going for. Not everybody makes their best career move right out of the gate.
For me, at the trailer company, it was a stepping stone that actually in hindsight got me to where I am. Without what I did there, like the accounting software conversion, I wouldn't have been as appealing a candidate as I was for Rx. To the people that do make a misstep, they can recover and it's fine, especially considering most of the people leaving public accounting are in their 20s and early 30s. You can make a pretty big misstep and recover with that much time ahead of you.
Use your best judgment and feel when the time is right. If you had to put a minimum on it, get to senior. At least wait until you have some people that you're managing, doing some review work. That's where you really start to get those hard skills that you'll use at the next level.
If you want to get into finance, don’t look for entry-level, but second-level finance jobs, like financial analysts, or find a role where you'll be reporting to the Director/VP of Finance or CFO. If you're reporting to one of them, you'll still be doing some accounting, but you'll get involved in a lot of other stuff. It’s important to note you can position yourself to get into finance at a company without having to pause and get an MBA. A lot of people do that, and there’s nothing wrong with it, but it’s not always 100% necessary.
I knew if I got a financial analyst role at Rx, I was still going to be closing the books, but the other half of my work was going to be focused on looking forward. And that's a good distinction that my boss said to me, early on, while accounting is looking backwards, finance is looking forwards. You have to be able to look backwards accurately in order to have a forecast that's worth anything, but ultimately a solid forecast can be exponentially more valuable to the organization.
I wish I knew that I didn’t have to be afraid I was going to get pigeonholed into some cubicle accounting job and never be able to get out of it. I wish I knew at that time that it wouldn't be the case.
And I also wish I knew the importance of being good at both finance and accounting, and how a combination of the two could add value to an organization. There were clearly times when I was in public accounting that I questioned the path I took. Whereas now I'm so glad I majored in accounting because it makes me more valuable as an individual.
I’d like to be the CEO of a company someday. And then beyond that, I would love to be an individual investor. Not for a firm, but on my own to invest in local start-ups, sit on the board, help them grow, etc. Lofty goals, but I feel I'm getting the on the job training I need to hopefully do that someday.