May 31, 2024

How Fractional CFOs Leverage Invoice and other Funding for Ecommerce Brands

Samantha Lloyd

Typically, Clearco works with financial, business, operations, and marketing leaders to discover funding that works for their ecommerce brand. We've been working closely with Chief Financial Officers (CFOs) at ecommerce companies as well as Fractional-CFOs. Today, we speak with Irene de Gooyer-Collins, a strategic CFO at Growth Partners. Irene works primarily with consumer packaged goods (CPG) companies that are on a high growth path from $1M to $25M in revenue. She evalutates companies through a financial lens to provide strategic and practical advice on running the business, raising capital, funding operations, as well as their exit strategy.

Irene offers her clients over 25 years of experience as a finance leader in CPG, merges and acquisition (M&A), private equity and software and has successfully supported founders startup to exit.

Irene, what put you on the path to land in fractional CFOs for CPG and ecommerce brands?

Irene: I have worked in a wide range of companies, in size and stage spending almost my entire career in the CPG vertical. My expertise is with companies that are brand forward and products that are innovative. I have operational expertise in fashion, apparel, beauty, and retail with a deep experience in business financing and M&A.  Working in a brand and product intersection requires a different financial view to scale and finance. Understanding both digital marketing and inventory in a multi channel environment takes specific knowledge and I provide that on a fractional basis with Growth Partners.

Talk about the need for various funding, financing, or other loan options for ecommerce:

Irene: Ecommerce companies, where the customer acquisition strategy is digital, have unique needs for financing. They typically have a very short turnaround in spending to acquiring the customer and the resulting inbound sale(s). Inventory funding can work well with a longer supply chain cycle as there is a need for a longer term capital structure. Ecommerce companies need a combination of funding options and solutions, from more liquid options to more stable longer term solutions.  

Why are ecommerce businesses difficult to fund or finance traditionally?

Irene: The quick cycle of funding and repayment for advertising spend and sales financing is difficult for a traditional bank or lender that works within a loan structure. Getting funding for the slow and longer term capital for inventory and team building is challenging, especially in the early stages of a company's growth.

The combination of the “quick and slow” funding needs are difficult to combine for a single lender without a substantial operating line - supported by what collateral? Most ecommerce companies don’t have significant assets to underwrite a typical loan. I see most of the companies using a credit card to facilitate the funding needs or through their sales platform, with companies raising equity financing to support the inventory needs. That's where solutions like Clearco's Invoice Funding come in - offering an alternative to equity financing and traditional banks.

How does ecommerce growth benefits from funding?

Irene: Growth causes growth. With ecommerce companies, the momentum from acquisition carries forward, so you need to spend more on advertising and marketing that performs to build on and maintain that exposure.  Having the funding available to take advantage of this upward swing is key to growing the business. 

How do fractional CFOs evaluate and look for funding partners for ecommerce businesses?

Irene: This is where I combine both my financial view and growth objectives for the company.  I look for a partner that is uncomplicated to work with, understands the revenue growth model, has flexibility to support the variations in the funding needs and is cost effective. It is not normally a single solution, but rather a stack of options that, when combined, provides the least dilutive, least costly structure, and with the most strategic partners that can grow with the company.  

What is the top thing ecommerce and CPG needs funding for?

Irene: Ifind that ecommerce and CPG brands typically spend and require cash on hand for customer acquisition, content generation, inventory, and team members or expertise.

What are some of your favourite resources for ecommerce and CPG brands:

I am interested in the business side of retail and ecommerce, so I really like Business of Fashion and Women's Wear Daily newsletters as well as their websites.  I have been trying out The Glossy podcast to get an inside view of the founder perspective. 

What does Growth Partners do to support CPG/ecommerce?

Irene: The number one thing we hear from VCs and companies themselves is the lack of and therefore the need for a clear financial performance picture.   

It is really difficult for the growth companies to get the full finance function organized.  That means the technology platform, the transactions booked on time, the financial reporting and the decision making. Companies lack the facts in a timely manner to look at their results to see the bumps in the road before they become critical and don’t have the ability to assess the next big thing. Growth Partners provides all of this to companies that are not ready or cannot afford this type of expertise in house. We work with the VCs to support their portfolio companies.

What makes you excited about Clearco and its mission to provide access to funding for ecommerce, from a fractional-CFO perspective?

Clearco ticks all the boxes for a fractional CFO for an ecommerce business. Since we don’t want a funding structure that is complicated and requires a lot of oversight, Clearco makes sense. We need a clear and easy way to set up and maintain funding structures that, once running, support rather than hinder a company’s growth.

Give us a “day in the life” snapshot of your job:

Irene: The day in the life of a Fractional CFO is like a jumping game - I jump from reviewing a pitchdeck with a founder for an investment round to building a technology stack with the team for an inventory brand company.  I talk to a Venture Capitalist (VC) for funding for a portfolio company and then onto a call about conversion metrics for an Instagram campaign with a client.  Every day is a new day and it's exciting.

We look forward to meeting you in-person - what will you share with the Clearco team at our onsite?

Irene: Joining the Clearco team at their onsite to talk to the people who see a lot of ecommerce companies and to hear the financialpain points of those brands is a great opportunity. Clearco is the one that talks to the founders and financial and operations leaders about the growth path. You also see the hiccups along the way and what keeps them up at night, beyond the money! With Growth Partners, we can provide resources and share our knowledge and perspective on CPG and ecommerce brands and their relationship with the financial side of the business.

Is there a leader or person you look up to that inspired your journey?

Irene: I have been very fortunate to work with a number of inspiring entrepreneurs. The person I would highlight is the CEO of the first company I became CFO at, Kathryn From. I had the most incredible journey to build a company with a very lucrative exit to a multinational. Being a partner with her rather than just a CFO or employee taught me how to look at the business as a whole, and understand that my role let her sleep at night (her words!). I look to provide that perspective and guidance to all of our clients in the CPG space, as well.

What is a Fractional CFO and how do they support ecommerce businesses?

A Fractional Chief Financial Officer (CFO) is a financial expert who works with multiple organizations. Rather than the CFO being a full-time employee of a single company, a Fractional CFO offers their financial expertise to multiple clients and that means taking on multiple ecommerce clients. This means access to a wealth of knowledge and applicable skills across a hyper-targeted area of focus. Fractional CFOs can support brands in financial planning towards growth and success.

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Samantha Lloyd
Director of Marketing, Clearco

Samantha Lloyd is the Director of Marketing at Clearco. A longstanding marketer in the business-facing technology industry, Samantha focuses on accelerating startup and transformative growth at companies. In her free time, you can find Samantha dreaming of the ocean.