Tom Donnelly of Datasite On 5 Things You Need To Succeed In The Modern World Of Finance & Fintech
An Interview With Jason Hartman
Know what makes your company tick. Regardless of the industry you’re in, a good finance professional needs to be involved in and understand how the company runs and makes money. They also need to have full command of the company’s products or services and customer problems that need solving.
As part of my series about the “How to Navigate and Succeed in the Modern World of Finance,” I had the pleasure of interviewing Tom Donnelly, Chief Financial Officer at Datasite.
Tom Donnelly is Chief Financial Officer at Datasite, a position he has held since 2015. Tom is responsible for overseeing all the financial planning and analysis for the company This includes all financial reports required for both internal and external stakeholders, managing cash flow, budgeting and analyzing return on investments, as well as corporate development. He also oversees several of the company’s shared services, including information technology and human resources. Prior to joining Datasite, Tom held a variety of financial leadership roles, most recently as chief executive officer and director of OptiMine Software, Inc. He has extensive executive experience in the technology sector, with expertise in operations, strategy and business development, financial planning, accounting and compliance, specializing in high-growth, high-technology companies. He holds a BA in Economics from St. Olaf College in Minnesota.
Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
For my first professional role, I relocated from the Midwest to take an accounting job on the East Coast for a defense sub-contractor performing large scale sourcing and logistical projects in the Middle East. This led to a crash course in defense federal acquisition regulations (DFARs) which was like a partial graduate degree in law and accounting. It was a fun and exciting company, and I was lucky enough to work for a superb CFO, who also gave me a crash course in cash flow, in particular how cash flows through a balance sheet and connecting that flow to how a business operates. I gained a lot of valuable lessons in the role that helped me to develop in my career.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
When I first graduated from college, unemployment was at a five-year high and the market for new graduates was extremely poor. In fact, I moved to the East Coast to get a job in business. Because of the market, I was earning money initially as a painting contractor, which I had done commercially in college. I had a large interior job in a large house, and the existing paint, although faded, had held up well through the years, so I decided to skip the sanding step in the process. I completed the job, and the customer was delighted. However, one month later, the customer called to let me know that large sections of the work had peeled, which led to a complete re-do. The lesson I learned that day and one I still keep top of mind is ‘don’t cut corners.’
Are you working on any exciting new projects now? How do you think that will help people?
We recently completed the first part of a significant investment in upgrading Datasite’s enterprise resource planning (ERP) system and all of its related processes, including collecting, storing, managing and interpreting data from many business activities. The project is set to improve the customer and employee experience, while also supporting our ambitious growth goals. The project included adding new technology and tools to assist with financial planning and analysis to ensure accurate and timely financial information that influences decision making and protects the assets of the company, as well better integrating all systems used by our front and middle offices and enablement teams.
Thank you for that. Let’s now shift to the central focus of our discussion. Extensive research suggests that “purpose driven businesses” are more successful in many areas. When your company started what was its WHY, its purpose?
Datasite is a leading SaaS-technology provider for the mergers and acquisition industry, empowering dealmakers in the investment banking, corporate development, private equity and legal professions around the world with the tools they need to succeed across the entire deal lifecycle. Our platform facilitates about 13,000 deals annually including corporate actions, such as mergers and acquisitions, restructurings or initial public offerings at their inception. The company has been around for more than 50 years and has offices in most major cities, supporting customers with 24/7/365 service in 18 languages.
Datasite was originally founded as Merrill Corporation in 1968 as a financial printing and typesetting business. In 2002, the company developed its Datasite platform and virtual data room application to help dealmakers share information in a secure space during the due diligence process.
Today, Datasite focuses solely on streamlining the M&A process, supporting advisors and their clients across the entire deal lifecycle with secure collaborative software that shortens timelines for buy-side and sell-side teams from deal sourcing and deal preparation to post-merger integration, while meeting regulatory compliance, including GDPR and CCPA requirements. Datasite’s use of breakthrough technologies, such as AI/ML-enabled capabilities to automate tasks, helps dealmakers be more efficient and effective.
If a fellow business leader would ask you for advice about whether to bootstrap or to look for VC capital, how would you help them weigh the pros and cons of that decision?
There are several key factors to consider in raising funds through venture capital (VC) or bootstrapping. Some questions to address in deciding which to pursue include understanding the market in which you will be operating, the uniqueness of the product, expected pace of growth, any challenges or limitations, and the length of the window of opportunity. It’s also important to note that one financing approach might be useful in launching a business while the other might be better post launch. It’s often not an all or nothing situation.
What measure do you use to determine the value of a company? What advice would you give to other leaders about how to get an optimal evaluation of their business?
I worked as a reviewer for entrepreneurs and startup companies across the state of Minnesota and have seen what goes into valuations of companies. Two key components to determining the value of a company are the value of company assets and its overall revenue. Beyond financial formulas, other considerations include geographical location, as well as potential strategic value to would-be acquirers.
What would you advise to a founder who initially went through years of successive growth, but has now reached a standstill? From your experience do you have any general advice about how to boost growth and “restart their engines”?
Business has had to deal with massive changes brought on by the global pandemic, inflation and international conflict. No company or business is the same as it was three years ago, and while some have been challenged by the circumstances, others have thrived. As a leader, it’s important to understand where the risks and opportunities in your business lie. Lean into the strengths of the business, including understanding where new customers or revenue streams can be generated, or new products or services can be offered to ignite new growth. This could mean something as big as a potential partnership or acquisition, or a new marketing or sales strategy.
What are the most common finance mistakes you have seen other businesses make? What should one keep in mind to avoid that?
One common finance mistake I’ve seen over the years is not investing to grow. When we decided that we wanted to focus solely on our platform and software applications, we invested to upgrade our platform. This included hiring a new development team and rebuilding the platform from scratch, based entirely on cloud technologies. The overhaul allowed Datasite to dramatically increase its global distribution scale as well as address other parts of the M&A life cycle besides due diligence. This same approach of investing to grow continues today. In the last two years, we’ve continued to invest in innovation and people to meet evolving customer needs. For example, we introduced several new applications including, Datasite Prepare, which leverages AI and machine learning to create faster, more efficient deal preparation. We’ve also expanded our market reach with our 2021 acquisition of Firmex, a leading virtual data room and subscription file-sharing provider based in Toronto. These efforts have helped raise our annual revenue by over 30% each year and increased our global headcount by more than 25%.
Ok, here is the main question of our discussion. Based on your experience and success, what are the five most important things one should know in order to succeed in the modern finance industry? Please share a story or an example for each.
- Know what makes your company tick. Regardless of the industry you’re in, a good finance professional needs to be involved in and understand how the company runs and makes money. They also need to have full command of the company’s products or services and customer problems that need solving.
- Have a deep understanding of the business environment. Every business operates in a complicated ecosystem of suppliers and partners. In finance, you need to stay on top of how these relationships, including customers, help drive the business
- Execute masterfully. The difference between being a really good company and an actual great company is execution. From an operational perspective, figure out what you absolutely need to nail today, so when the company becomes larger, it’s still easy to do business, still easy for employees to work, and still easy to run the business day-to-day.
- Credential up. Obtain the necessary and ever-evolving qualifications needed in the finance industry. As technology continues to modernize the space, more certifications and tools can be obtained and learned.
- Network whenever you have the chance. You never know how a partnership in this industry could serve you down the line.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
Be realistic and remember, good things take time. In an ever-changing industry, with new technology and solutions coming to market often, giving yourself time to adapt and analyze your own business’ needs is key.
How can our readers further follow your work online?
You can reach me on LinkedIn at Thomas Donnelly
This was very inspiring. Thank you so much for joining us!
