Startup CFO Says Tight Funding Market Creates More Sustainable Businesses

Tight Funding Market Creates More Sustainable Cos

When Quan Zhang, joined specialty healthcare startup Thirty Madison last month to become the company’s new chief financial officer (CFO) following a 20-year stint at Pfizer and Sanofi, she was prepared for — and looking forward to — the change.

Although the scale and funding protocols in her current capacity are distinctly different than her Big Pharma days, Zhang told PYMNTS there are still commonalities between an established company and a startup where she is tasked with leading it toward focused growth.

“We have a very ambitious growth plan for the company, so how do we best balance to continue to drive the outcome for our patients while remaining disciplined on our capital allocations and leveraging our talents and technology to deliver that vision?” Zhang said. “That is really what I try to balance; I try to set the roadmap from a capital allocation perspective that can support that vision.”

Zhang said she was motivated to move to the 5-year-old digital health startup because of its mission and prospects to grow beyond the 800,000 patients, or subscribers, that it currently serves.

“One thing I’ve learned is that when you’re in a startup, you always want to make sure that you dream big, keep a close eye on your cash — your runway — however, really take a calculated risk where you should,” Zhang said.

Facilitating Working Capital

To handle those subscriptions, Thirty Madison maintains well-established partnerships with billing companies and credit card processors.

With its direct-to-consumer (D2C) model, its business mix is mostly cash pay, with about 70% being cash pay and 30% being insurance or “enterprise” — meaning the patients’ employers.

“We’re always actively looking at our working capital as a whole,” Zhang said. “So, from our perspective, we’re looking at various options on how we can improve engagement and patient experience, but also facilitate the overall working capital structure for the company.”

The overall equity market has shifted over the last 12 months from looking at revenue multiples to looking at cash flow, break-even and path to profitability, and that makes it even more important for startups to balance their ambition for growth with their overall profitability and cash runway, Zhang said.

“That, for me, makes it much more interesting as a CFO coming in, in this dynamic,” Zhang said. “And, of course, with the equity market continuing to evolve, we are also laser-focused on continuing to drive the impact for patients, grow our top line, but also be very clear on our path to profitability.”

Unleashing Power With Technology

Remarking on the expanding role of CFOs and their growing involvement with technology throughout their organizations, Zhang said she started as a computer science major while an undergraduate before moving to finance.

She found that she enjoyed getting closer to business through finance while also leveraging technology. Now, at Thirty Madison, her role as CFO brings together her passion for patients, healthcare and technology.

“There’s a lot of power that can be unleashed collectively, but I also believe that Thirty Madison has a very, very good start already,” Zhang said.

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