Justin McLoughlin

(Photo Credit: Justin McLoughlin)

Name: Justin McLoughlin​

Occupation: Founder & CEO, airCFO​

Favorite Restaurant in Town? Hot Chicken Takeover.

They have good food, but much more important than that is their mission: "HCT's about more than just chicken." HTC is an Ohio startup and the founder's vision is to staff his restaurants with (mostly) people needing a fresh start. Many people on their team were formerly homeless or previously incarcerated. I lived in San Francisco for a few years and my favorite restaurant there, Crossroads Cafe, had a similar mission.

I first tried HCT in Columbus, before I knew the story and mission. I fell in love with it after learning the story. I was happy to hear they added a couple locations up here, including one in Westlake.

Editors Note: Joe DeLoss, founder of Hot Chicken Takeover, was recently featured on our partner podcast, Lay of The Land. Check out the full episode here!

What's something useful, magical, or wonderful about Cleveland?

Aside from the obvious (cost of living, all 4 seasons, 3 pro sports teams, lakes and Metroparks) it's the city's toughness.

We can endure quite a bit (see: Cleveland Browns) and keep on moving forward. We don't give up easily. We keep fighting to reinvent the city and keep Cleveland relevant.

We stand up for our city and for each other. And if anyone talks trash about Cleveland, we'll make sure they don't get away with it (that means you, Joakim Noah).

Q. Justin, you are the founder of airCFO. What exactly is airCFO and why does it exist?

airCFO is an accounting, finance and tax firm for early-stage, high-growth startups. We operate as a fractional, remote team for startups and currenty support about 125 companies. Our job is to make sure they all have best-in-class financial reporting, models, and processes to ensure their back-office scales properly along with the rest of the business.

We exist to keep founder's out of the weeds and out of trouble. We provide a bridge from startup to scale-up; scale-up meaning when our clients exit, go public, or get large enough to build their own in-house finance department.

In summary, airCFO’s vision is to serve as a best-in-class advisor for high-growth startups and become recognized as the premier workplace for talented, startup-minded professionals.

Q. Just a few years ago, airCFO's entire team was in Cleveland. Today, you are focused in Cleveland with a distributed workforce. Tell me about that decision and change.

The decision came out of a need for talent to keep up with growth. We struggled to find enough finance professionals in Cleveland that also had prior experience operating alongside high-growth tech startups. So we started looking outside Cleveland.

Our first remote hire was in January 2019 in New York City. By the middle of 2019, we fully embraced remote hiring. I think 8 out of 10 new hires in 2019 were outside of Cleveland.

One downside though is we had a hybrid culture developing, and that wasn't good for the team. Thankfully, one of those 2019 hires was our new Director of People, Sky. She was remote as well (Austin, TX) and spent a good part of her first year helping us go fully remote and unify airCFO's remote culture.

For the Cleveland team, our lease was up at the end of 2019, so we reserved some desks at a co-working space (Limelight in Ohio City) for those that still wanted to come to an office, and everyone else works from home.

Fortunately, we were ahead of the curve coming into 2020. In the end, going fully remote was great for many reasons and today we are back to one unified culture.

Q. What are the most common mistakes that early-stage founders make in regards to bookkeeping? What is the simplest way for founders to overcome this trap?

The most common mistake I see is early-stage founders and teams trying to make one full-time role out of piecing together all the back-office duties such as bookkeeping, FP&A, tax, human resources and even business operations, and then expect to find one person to be good at everything.

In my experience it is rare to find one person that can excel in all of these areas, especially in a fast moving startup. It won't be hard to find someone that wants to help in all those areas, but that doesn't make them qualified.

I have seen startups hire someone a junior bookkeeper and hope he can act as the fractional CFO to prepare dashboards and lead diligence during a fundraise. Or on the other side, I have seen startups hire a seasoned Controller or CFO, but expect her to do all the "blocking and tackling" (i.e bookkeeping, payroll and accounts payable/receivable). Either way there is a mismatch and it usually ends in frustration for both the employee and employer.

Just because someone is a good bookkeeper, doesn't mean they know how to build models, or vice versa.

To overcome that mistake, I would challenge the assumption that you need a FTE in the first place, especially if you are Series A or earlier. There are a lot of firms like ours that can offer fractional support and provide specialists in different areas as opposed to seeking out a jack of all trades. Often, the cost of hiring a few different fractional contractors will not be much more than one FTE.

Q. What's rarer in a startup: a great forward-looking financial model or great backward-looking accounting records?

A good working financial model. Most models are built for one-time use, such as a fundraise cycle, and then archived somewhere only to surface again in 18 - 24 months when it's time to prepare for another fundraise.

A good working financial model should also operate as a budget and allow a team to measure budget-versus-actual progress in between fundraises.

Accounting records are very important, because they are the basis for a good working financial mode, but I see many more good sets of accounting records than I do good financial models.

Q: What's one phrase you learned from one of your employee's that's stuck with you?

You can have ANYTHING you want, but not EVERYTHING you want.

Our employee told me this when she needed to step back from full-time work at airCFO to focus on her family.

For me, that phrase helps me stay focused. It's fun to dream about all the different things we can go after at airCFO. We have a team that can do anything, but that doesn't mean we have the resources or the time to do everything we want to. We're approached weekly by other startups or vendors wanting to our time to "partner up" and help airCFO explore other revenue or service lines. We pass on almost everything now.

As a services startup we've also thought about building a product, i.e. our own fin-tech software application, but then I remind myself of that phrase to stay grounded in our current mission.

We have a long way to go to accomplish our vision to serve as a best-in-class advisor for high-growth startups and become recognized as the premier workplace for talented, startup-minded professionals. Once we accomplish that, maybe then we'll start going after EVERYTHING.