Raising Funds and Entering Hypergrowth During a Pandemic, with Pedro Barros of Remote
“With COVID hitting, going on a road show and meeting folks in person to pitch doesn’t happen anymore. And thanks to remote work, we actually were able to do more, faster! On the same day, we could meet all the leading investors in our cap table and have them invest at Remote, something that couldn’t have happened if we had to meet physically with investors scattered across the globe.”
Between an entrepreneurial journey founding his own VC fund, experience in investment banking and M&A in London, but also a stint at Codacy as Head of Finance, Pedro Barros has seen it all. He’s now VP of Finance at Remote, which helps companies easily set up business in new countries. Remote was already growing quickly before 2020, but the Covid pandemic placed a new emphasis on flexible, international teams.
We talked about Pedro’s journey up the finance ladder, Remote’s Series B fundraising, his insights on how to be a good leader, and his vision for the future of finance and remote work.
Table of contents
Entering a phase of hypergrowth propelled by COVID
I joined Remote about a year and a half ago. We used to be less than 20 people then, and we’re close to 500 today - the journey has been tremendous to say the least. Just on the finance team, we’re over 25 people now. Our main activities consist in creating our own entities across the world so that we can employ folks on our clients’ behalf. This helps them reduce risks of permanent establishment, or risks of misqualification.
Over the last two years, we've raised around 200 million from leading investors to enable our mission of global wealth distribution. We want to allow folks from anywhere to be employed by anyone, and it’s working remarkably well! This has exposed us to hypergrowth, which I hadn't experienced before. However, with the right leadership and team, it's a journey that you can really have fun in and really learn a lot about.
Our growth has been accelerated by COVID. Before 2020, remote work was an ongoing trend, but the pandemic propelled it. For companies now to remain competitive, they need to be really open to it. There's still a lot to be done, in terms of work processes, efficiency, care for employees... It's a journey that I think is just beginning now. But it's here to stay, and at Remote, we now are at the forefront of it, and we'll continue enabling companies to embrace it.
The key responsibilities of a VP of Finance
I deal with all the traditional finance responsibilities, from accounting, to tax, treasury, and planning. At Remote, this is relatively interesting since we’re present in 50 countries and have close to 70 entities incorporated by now. We’re flowing large amounts of capital across the world already, being responsible for people's salaries, so the sums at stake are very significant.
From a controlling, compliance and treasury perspective, it's tremendous work. The other significant perspective would be the tech side. Transfer pricing and intercompany agreements are a day to day thing, not a one-off project exposure in terms of permanent establishment.
I'm also highly involved in product development, either internal solutions that we need to implement, or thinking about the bigger picture of where Remote can go. Employment is just the tip of the iceberg, but there is much more that can be done and we will be doing so.
The structure and responsibilities of the finance team at Remote
For the first nine months, I was by myself on the finance team. It's something I don't recommend, especially in a hypergrowth company. I leveraged a lot of outsourced help, not only from advisors, but also through a shared service center with Ernst & Young in the Netherlands, which allowed us to scale fast and efficiently.
But soon I realized that I had to bring insourced expertise to the team. I started hiring, and brought in two directors - one for a Group Controller, another for a Group Treasury. One worked for Expedia, the other for Uber, so they had been exposed to the type of early stage dynamic environment that we’re currently in.
That kickstarted the growth of our team. Today, we've around 25 people in four departments: accounting, treasury, tax, and financial planning and analysis. These teams are all led by very experienced directors. And we’re increasingly growing the team with a regional focus. Our ambition is to continue insourcing as much as we can.
Since payroll and benefits is part of our offer at Remote, we've a dedicated team working on it, and they are working very closely with our in-house finance team. From salary payments to any tax implications, or income tax considerations, we unblock challenges in countries together. We’re facing more and more countries with high volatility in their currency, either through inflation, or FX volatility, which we try to overcome as a joint challenge.
Insourcing vs outsourcing: when to choose which?
For me, choosing between insourcing and outsourcing was always about control and velocity more than anything else. At Remote, we got to the point of not being in full control of how things were being done anymore. Naturally, there was some lack of visibility when things moved to our partners. And even having established things properly beforehand, there was a disconnect sometimes - we lost control. That’s always a great threshold for you to start insourcing some of the functions, however I don't think you should insource everything from the onset.
Then, there’s velocity. At the rate at which we’re growing, we cannot lose energy having to put out outsourced agents in the constant loop of how the company's moving, or our strategy. Having internal employees who really understand our full context and have the full picture is much more efficient.
Another critical point for us, is also the values’ alignment in a team. When we hire, we hire for values, for cultural diversity. When you work with an outsourced agent, they may be the best people in the world, but they were not hired or they're not onboarded with the same set of values as Remote’s.
From Head of Finance to VP of Finance: Pedro’s journey up the finance ladder
When you switch roles and evolve from Head of Finance to VP, expectations change - and mostly from within yourself. But of course, it's not because you change your title that you are a new person.
For me, it equated to moving from an operational role to a more strategic role, where I was defining our way forward. I was challenging not only the business, but also our internal team to go faster, to think creatively, to challenge themselves to do better.
What also changed massively and drastically was growing the team at the Director level. I'm still super hands-on, because no company goes on a hypergrowth trajectory with just strategic folks, or hands-off folks! So, I continue to work closely with the business, but the reality is that I hired the best people in the world to do their job, so it's not up to me to tell them how they should be doing it anymore. It’s more about me learning from them and enabling them the best way possible, removing barriers and points of friction.
Building a solid remote work culture
I came from super traditional industries, such as investment banking, M&A, and strategy. In these, you have to be in the office and I don't think they even allowed me to be outside of the office ever.
But then, COVID hit, and I joined Remote, which was very well prepared to accommodate and to work in a fully distributed way. And that is the key thing about building a remote culture. Remote is ready and dedicates time and resources to enable employees to be distributed across the world, through documentation, transparency, and communication.
We meet virtually frequently, we create dynamics, we've a game night, we've a weekly all-hands meeting and monthly presentations. I think the concern of losing the culture when going remote is more about the fear of losing control. At Remote, one of our key values is ownership, so we don't have control by default, we really encourage each one of us to make their decisions and push things forward proactively.
Given that, it’s true that fully remote work may not be for every company, because it requires a lot of work. And either you're prepared to put in that effort, or you aren’t. But I think that companies that don't enable remote, or are not remote first, will have a significant disadvantage compared to companies like Remote, where for example, I can hire anyone. I can hire the best folks in the world! My team is spread from San Francisco to Eastern Europe. How can someone that is office-based and can only hire from their postcode do that? There's a lot of talent scarcity, so not enabling remote is a critical disadvantage on the long run.
Best practices for efficient remote finance teams
At Remote, we’re very ‘documentation-heavy’. There are no office conversations, what happens is a document. Even if it's two bullet points, it's documented, and it's put in front of everyone to comment, to challenge, to build upon. And that is a critical aspect in my opinion for efficient remote work.
The other important thing to do is to get your tools in order. You need to have the right tools for the challenges that you will encounter. If you are focusing on two countries, the US and the UK, it’s easy to get a bunch of tools like QuickBooks, Xeros... But if you want to move global and be present in multiple countries, you need to think about larger scale ERPs and finance systems. At Remote, we’re currently investing heavily in that.
Last summer, we started a project to implement SAP. We've already implemented 43 countries, which is the threshold of the offering that we got. Now, we’re moving to a Second Tier offering to be able to bring in all countries we’re present in.
Raising a Series B fully remotely: Pedro’s insights
Remote is now a Series B firm, whose last round reached $150 million, led by Accel. Previously, we had a $35 million round led by Index Ventures with Two Sigma, Sequoia, and General Catalyst. So, we've very interesting VCs in our cap table, who really believe in what we’re building.
The Series B happened last July. Actually, the last two rounds were done in almost full lockdown. We’re not afraid of it: Remote is led by seasoned entrepreneurs. It's not their first company, and I think having that experience at the top level makes a huge difference.
The way I've supported it was very operational. I met and worked with all the prospective investors, organized presentations, shared information, models,... I was very operational, but also always aligned with how our founders envisioned the fundraising to go.
With COVID hitting, going on a road show and meeting folks in person to pitch does not happen anymore. And thanks to remote work, we actually were able to do more, faster! On the same day, we could have met all the leading investors that we've in our cap table and have them invest at Remote, something that could not have happened if we had to meet physically with investors scattered across the globe.
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