How to Create Engaging Board Packs for Investors w/ Ankush Bhatia | Fractional CFO

Ankush Bhatia: 0:00

I think the key thing to think about board packs is you're always in sell mode. You're always selling.

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‍Anshika Arora: 0:06

Today we're talking about what you need to consider when you're creating a board pack and presenting it to your stakeholders. We spoke super high level about the structure of the board pack and what it should look like, as well as, really in depth, on how to incorporate storytelling and what to do when perhaps your metrics aren't looking as green as you'd like. We're honoured to have Ankush on the podcast, who is a commercially focused finance leader with over 15 years of experience across London and New York businesses as a CFO, both private equity and venture backed. He started his career in investment banking and brings the right balance between having an analytical mind as well as a really creative problem solving outlook.

Anshika Arora: 0:41

I'm Anshika. I'm the founder of Eternity, a CRM designed to streamline the wedding industry for couples and businesses alike, and I'm so excited to be hosting the BAE LAB host podcast today, which is powered by HSBC Innovation Banking. Let's get into it. Thank you so much, Ankush, for joining us on today's episode of the BAE LAB podcast. I'm so excited to have you on and talk all things around building a board pack, so let's get straight into it. To start off with what is the main purpose of a board pack and how can it really set the tone for a productive board meeting?

Ankush Bhatia: 1:12

Yeah, so I mean, fundamentally, the purpose of a board pack is to inform the existing investors about what's going on in the business. They have information rights, they have a right to know how the business is progressing. But I think the key thing to think about boat packs is you're always in sell mode. You're always selling Because, remember, these are existing investors who might come on on the follow-on round and if they don't follow on, the new ones are probably going to be like why aren't they coming in? And also, a big thing that people don't realize is it's very common indeed that future investors ask for the boat packs from the last six to nine months. So you know it's important to make sure that the board pack is structured in a way that you know you're always in Selmo, things are progressing. But also, it's not about just being positive. It's okay to like put your challenges in there, get the feedback. Also, decision making it's a way to get like formal decisions made.

Anshika Arora: 2:00

Absolutely, and at BAE we love tangible takeaways. So I know a lot of founders out there listening are probably wondering right, what should the structure actually be? You're saying I should focus on the wins as well as what maybe could have gone. The number one next thing to follow is the list of follow-up items from the last board meeting.

Ankush Bhatia: 2:16

I think it shows the board that you're actually like followed up on what they asked. You have a plan in there or you have a timeline for when it can be done, and then the format usually should be executive summary. That's the CEO, he's talking about the overall business. You know what's going right, what's going wrong, touching on different aspects, followed by performance. This is usually where the CFO comes in, and I don't mean I mean performance across the business.

Ankush Bhatia: 2:50

So this can be key metrics on the financial side, it can be metrics on the marketing or the op side on product, but overall a view about like how the business is progressing, if our unit economics getting better. And then I think after that it's usually a mix of like. If there are any strategic things you want to do, whether it's launching a new geography, a new product, and in boards I've seen after that it's a such combination of between marketing, ops, product rotating, not all of them at once, maybe one of them a particular topic, and you end with the financials. But the financials is usually like a checkmark, like you have the P&L, the cash flow, so you know that the checks and balances are in place, but the punchy metrics are always at the front.

Anshika Arora: 3:28

Yeah, amazing, and I love how you've positioned it, because essentially you're telling a story and I think that's a really important thing and we always hear that that your board packs should be a storytelling piece. How can we really use that to drive meaningful discussions? Because the people that you have in the room, on the cap table or on the board, obviously you wanted them on board for a reason and it needs to be a two-way conversation and often it's a great time to use those meetings to get exactly what you want out of those people. What's the best advice that you would give to drive meaningful discussions through that board pack?

Ankush Bhatia: 3:58

Yeah, I think in my experience, you know and I think of myself primarily as an operator as opposed to a CFO, as a co-pilot to the CEO who's going to come in with him and build a business and I think, for founders, if you don't have that, what they should be doing is sitting with the investors when new investors come on board and ask them in the first three months, okay, what are the top six, seven key metrics you care about? Like, what is it that's going to make you fall on in the next round? And something you want us to track Because I think it's important. Otherwise, people get caught up in like 15, 20 metrics and then you really can't show improvement on anything and you end up going nowhere. So, having that core list of six, seven metrics and then rigorously tracking them, showing like improvements in them over time whether it's on a quarterly basis I think it builds confidence with the board. You know the storytelling, they know you're following a path.

Ankush Bhatia: 4:46

And then I think the other thing is also, I mean about like new things. I mean I've worked in businesses where you know things have not gone well in the current market because of macro conditions at place. But a lot about building a startup is about resilience and perseverance, and we have come in with an alternate plan and said, look, this didn't work, but we have an idea for this new product, or there is this acquisition that we could do, that could like get us back on track. So I think it's always about the storytelling, the good and the bad, and the bad is followed by like what's our plan now?

Anshika Arora: 5:18

I love that because I think especially a lot of founders you're not always going to have a great day. There's going to be some days where something doesn't go right, there's going to be days where you underperform on those metrics and, by the way, I absolutely love that trap, that trick around asking your investors and your cap table on your board which metrics do they actually care about? Because I think to build that relationship, you don't just want information jargon thrown their way. You actually want to make it very tangible and meaningful. So I think that's a really helpful piece of advice. Yeah and just..

Ankush Bhatia:

But when it comes?

Ankush Bhatia: 5:48

I was just going to add to that and there is a fine balance here. That especially happens when you jump from seed to series A, because you're suddenly going from high net worth individuals who might have come in in the seed, and you're getting into series A where you're getting, like, proper VCs coming on board and there can be a difference out here, because a lot of the guys on the high net worth and the guys coming in next can actually be focused on like, well, I want growth and that's why I think it's very useful to get that consensus in the room to about what are we going to focus on. It also gets everyone on the same page.

Anshika Arora: 6:18

Actually, that's a really interesting question. I have based off of what you've just said. A lot of the time, as founders, you will have your existing investors and then you'll have those that you're trying to warm up for future rounds. So they always say the best time to actually meet those people and future investors are when you're not fundraising and build up those relationships organically. But how much do you think it's worth asking those warm leads and potential future investors about what metrics are important to them and implementing them in present board packs? Do you think that that's spreading yourself too thin? Do you think it's something which could be useful? I'm just so interested to hear your thoughts on that.

Ankush Bhatia: 6:57

Yeah, no, that's a really good. That's a really good point actually, and actually, honestly, that's the way it's worked for like us, like in most of the three startups I've worked at startup skill ups uh, we have like started talking to people like 12 months before we wanted to raise around. We have gone to them, we have showed, we have showed them our deck. We have actually said like, look, this is what we have done. Is there something we are missing? Is there something we're not thinking about? And sometimes it throws like great ideas out there. They're like well, you know, can you think about this as well? And then you're like okay, if it makes sense, you can take it back's usually not miles out, like it's not like in the sense that you've completely missed a key metric, but it's probably more variations about like how people like to think about it. I think it's a really, really good idea. Getting someone on board in six months, when you want to close around, is very tough.

Ankush Bhatia: 7:45

Getting them on the journey they already know the management, they already know how the business is progressing makes it super easy.

Anshika Arora:

Yeah, absolutely, and I think one of the podcasts that we recently did, we actually spoke about the important or importance of uh stakeholder updates each month and even just adding people to that mailing list even if they you've just met them for a coffee or you've just met them for a networking event but you think they'd be a good contact because the amount that you could then generate interest by them just reading that email once a month from you, it's so much warmer and it's definitely something that I found beneficial in my own business.

Ankush Bhatia: 8:18

Absolutely, and founders shouldn't be shy to share good news. It's good to get people excited. I mean, you're always in sale mode, so definitely.

Anshika Arora: 8:26

Pretty much, and going from good news on the other side of the spectrum when there's bad news I, and going from good news on the other side of the spectrum when there's bad news. I know you touched upon this briefly that when you're perhaps underperforming or something's not going right. I'd like to hone in a little bit more on that because I think that's the most daunting thing for founders is to send that update when you know that it's been a slow month or a slow few months. And how do you keep the morale high and still keep the motivation going and make sure that your board or your cap table don't actually lose interest or lose sight of what you're building?

Ankush Bhatia: 8:58

Yeah, absolutely so. I always say this there is a board meeting and then there's a real board meeting, and then there is the board meeting. I don't think. I think if there's bad news, it should not be the first time they're hearing about it in the board. That is just going to be disastrous. Imagine having five, six people around the room and all of them are hearing about it for the first time. That can never go good for anyone. You need to convey that message before the board meeting. You need to have those individual conversations with the investors, explain to them what's happening and, more importantly, have a plan in place about like okay, we recognize this, we understand what's happening, we're working on this right now. Give us some time, next board meeting or we can have an update in a month and we'll come back and report on this.

Ankush Bhatia: 9:37

And I've not worked in a single business where things have not gone wrong. You know they always do, but it's more about managing it. I think the one thing investors hate is when they ask a question and management has no clue. Like they don't want to be the one pointing out that have you thought about this? Like this seems completely off and management has no clue what they're talking about. That is a disaster. So I think bad news is okay, but it's all about managing it and having a plan in place. You know that's key.

Amardeep Parmar: 10:10

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Anshika Arora: 10:50

Absolutely, and I know that we touched briefly around financial metrics. I want to talk a little bit more on that, and I know you said that they belong near the end of the pack, just to make sure that everything's in check. Other than the, say, p&l cash flows, are there any other key financial metrics that you think every business should have? I know that it does vary based on the model that you're using, but any high level metrics.

Ankush Bhatia: 11:13

Yeah, absolutely. So I've worked a lot across like B2C, e-commerce, marketplaces, fintech, consumer lending businesses, so you know. But I've also been an M&A banker so I've done a bit of buy and build. So quite quite spread out. But I think, just looking at that theme, so the financials, the core financials, you know at the back P&L cash flow, but you're on your month-on-month comparisons showing where the shifts are. That's more of checks and balances. That makes investors happy that the finance department knows what they're doing. They can see what they want.

Ankush Bhatia: 11:44

The front should be punchy and this is like more your ARR, your MRR, your gross subscriptions, your net subscriptions, where your churn is, your retention cohorts, your LTV, your CAC, and then you know you can talk a little bit more about, like your gross margins, your fraud rate, depending on where the numbers are. Those are, I think, the punchy numbers that businesses care about because they kind of revolve around the unit economics and eventually what you're going to be valued at. And there is a mix out here because some of these things like ltv, cac, like if you look at the roi, it's you're not going to change it month on month, like you can't make such big shifts that the ltv just moves. So this comes with a bit of a plan and you're like, okay, you know what I understand? The board wants this to go towards profitability.

Ankush Bhatia: 12:26

What are the biggest drivers? I can do that. Okay, I think I can improve my gross margins, but I three months. So let's work on a plan to do that. Let's work with our suppliers, delivery guys, cut those costs down and then show what we can do. So I think that's where I think investors get really like love that kind of stuff. I think it also helps to like. I mean, I came from an investment banking background so you know I've always been quite happy to show it in charts and tables and numbers, very visual like, not just like things written down, so it's very visual, it tells a story. And I believe in the hockey sticks.

Anshika Arora: 12:56

You know things are like looking good, they're improving, yeah amazing and I love how you've mentioned there that even through your finances, you can do the storytelling piece. So this is where we currently are, this is what we want to implement, this is where we want to be, and I think that's that's a really important piece. That numbers by themselves just aren't probably enough when it comes to non-financial metrics. Are there any other ones that you see in great world packs that you've looked at, which founders should implement? Yeah, absolutely.

Ankush Bhatia: 13:24

I mean, um, on on the marketing side again, my background has been in a lot of b2c businesses. So, on the marketing, these are rich with marketing data you know conversion rates, cost per clicks, the CACs across different channels, referral rates, because e-commerce businesses, you know, get fueled on marketing and how it is. And there is actually a lot of things out here because you know, nowadays you have quite a bit of brand building with media for equity etc. Which can like help as well. On the other side, I think on the operational side, uh, there's quite a bit as well around operational efficiency.

Ankush Bhatia: 13:58

So I worked in a kids bike subscription business, so it's quite critical for us to know what's our total fleet size, how many of the bikes are out with customers like what's the operational efficiency size? How many of the bikes are out with customers like what's the operational efficiency? How soon do they come back and go out? Because every extra day they're sitting in our warehouse. Is them not earning money? So, while it's a very ops-focused metric, it drives like finance kind of like we were very involved because it drives my revenue, my P&L, how many bikes I need to buy. So I do think like, at the end of the day. That's why finance is such a cool place, because it kind of tells you the story across the business. Numbers tell you what's going on throughout the business absolutely, it's the foundation, isn't it?

Anshika Arora: 14:35

and I guess, just to close off, what are some of the most common mistakes that you see founders making when they create their board packs?

Ankush Bhatia: 14:42

Yeah, absolutely so. I think the number one thing is to probably over-promise and build too ambitious a plan. I mean this is something that goes wrong many, many times Because you know in the start I mean, see, everyone has a plan. Then everyone refocuses a plan when investors are on board and talks about, like, realistically, what are we going to do. I think it's important to get that plan right Because you're held to it. One, investors love to do a budget versus forecast comparison. And again going back to my DD plan, your debt investors, your equity investors coming in, they all want to see how you performed against your budget. So I think it's important to balance, like ambition with what's realistic. You can't have too boring a plan because it doesn't show ambition. And actually that's something as a CFO I do a lot. When marketing and other people come in and say that's a plan if it's not ambitious, I'm quite I'm good to raise up my hand and say like well that doesn't make sense.

Ankush Bhatia: 15:34

How are we gonna? How people gonna invest in us? So that is the number one thing. The other things are a bit smaller. You know, it's a bit about clarity of structure or not having the right ask in there. Remember, board meetings are a great way to get decision making, get everyone on the same page and get your approvals. So, not having any of that missed out, I think it's an opportunity.

Anshika Arora: 15:53

Consult yeah, absolutely no, I love that it's. It really is bringing everyone together in conjunction and hearing the right opinions to make sure that there's that fine balance between over ambitious or way too cautious. Um, absolutely love that. Thank you so much, Ankush. I've learned so much through this and I'm sure anyone else listening definitely has as well. As you know, with BAE we always round off with the same three questions that we ask everyone, which are probably arguably a bit more difficult to answer. So to start off with, who are three Asians in Britain that you think are doing incredible pieces of work that the audience should check out?

Ankush Bhatia: 16:26

Yeah, sure. So I think my first shout out should go to Vinay Solanki. He's actually the head of Channel 4 Ventures. He's a really, really great guy to know like I know him because he invested in hustle while I was there, but since then, like he is a super friendly guy. If you're in a consumer space and you want to build your brand, I think Channel 4 Ventures is a great way they do media for equity, great way to scale without using your cash, and Vinay generally is very smart and super helpful guy. I don't think I've seen a friendlier VC, so that's one.

Ankush Bhatia: 16:56

The second one is actually Farah Kabir. She is the CEO and founder of Hank's Condoms. So she was building the first vegan condoms. It's quite funny, actually. Condoms so she was building the first vegan condoms. It's quite funny. Actually, we both entered the startup world around the same time. I mean we're both ex-Goldman but worked in different departments and you know, I mean I remember when she was initially talking about it I was like, well, this is a space that has T-Rex and Trojan and you're going to go against some heavyweights, but you know, she's been resilient, perseverant and she's built a great band and now it's gone. More than that it's into wellness and intimacy for women and it's gone to the US, so definitely doing a great job.

Ankush Bhatia: 17:33

And then I think the third one is Arnie. His last name is a bit of a tongue twister Arnie Sriskandarajah, so I think I've murdered that name. But Arnie is someone I know. Actually, he introduced me to my first role at Sarah Care and he I mean his day job is he's the head of alternative strategies at Roundhill Capital, but he also runs quite a few things for early stage founders on the side. So he runs a group of 30 operators and VCs called Groundflow Ventures which invest out of our own money in early stage startups, mostly pre-seed, you know, and he's a great guy, you know. I mean, the people on that list are like VCs from like almost a lot of the big funds in London and they're all investing out of their own money. So you kind of like get access to them at quite an early stage and you get the input too.

Anshika Arora: 18:19

Amazing. Definitely check them out. Thank you so much. How can people find out more about you?

Ankush Bhatia: 18:23

Yeah, so the best way is my LinkedIn. You know I'm quite responsive out there. I think my LinkedIn has a good summary of my experience, so I think that's probably the best way.

Anshika Arora: 18:32

Amazing, and how can our audience help you?

Ankush Bhatia: 18:34

Yeah, so I mean you know I love working with new companies. I think I really thrive on like working with early stage and up to C, b, c, c stage companies. And you know if there are founders out there who need help with fundraising investor decks or even like series A, b founders who probably want like a CFO but don't like want a full time one yet, but someone who comes in and commercializes their function helps them think a lot more metrics and KPIs, definitely feel free to reach out to me on LinkedIn.

Anshika Arora: 19:01

Amazing. Any final words from you.

Ankush Bhatia: 19:03

No, thank you so much. I mean it's been great. I've been following you guys and your podcast, so really excited to be part of it.

Anshika Arora: 19:09

Amazing. Thank you so much. It was great having you on.

Ankush Bhatia: 19:12

Thank you so much.

Amardeep Parmar: 19:18

Thank you for watching. Don't forget to subscribe. See you next time.

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