THE APRIL 18TH TAX DEADLINE IS APPROACHING FAST
DON'T FORGET TO CLAIM YOUR R&D TAX CREDIT! BOOK A CALL TODAY
ATTENTION: THE APRIL 18TH TAX DEADLINE IS APPROACHING FAST - DON'T FORGET TO CLAIM YOUR R&D TAX CREDIT!BOOK A CALL TODAY
How does someone become VP of Finance and Capital Markets at Ramp, the finance automation platform helping over 13,000 businesses save time and money? “Right place, right time,” Alex Song says. “It can look like everything was deliberate, but I kind of got lucky with this opportunity.” If you believe that, we have a bridge to sell you…
In reality, Alex rode a double major from Stanford and an MBA from Harvard into a series of positions where his unique brand of precision, accuracy, and academic rigor allowed him to thrive. His decade in the investment world taught him valuable tools that he now uses at Ramp as an operator. Most of all, the unforgiving natures of the public markets instilled one especially valuable lesson. “Across every job I've had in the investment world, there is a respect for rigor and hard work,” he says. “If you're intelligent and you have the aptitude, you're resourceful and you work hard, you should be able to get to the answer, whatever the answer may be.”
After a few years at BlackRock and Morgan Stanley, Alex made the move to Bain Capital, where he worked as an investment analyst. Bain is based in Boston, far from Wall Street and its sales culture. “You weren't in the flow of things in New York City, where you have to contend with brokers calling you up and inundating you with all sorts of ideas,” he says. Instead, Alex had time in the office to dive deep into research, working through data to identify good investment opportunities. “I really liked the sheer academic rigor of that particular job. It was a large organization run by academically-oriented people, who were deeply thoughtful,” he says.
Alex left Bain to pursue his MBA from Harvard and took a job at Crayhill Capital Management after graduating. The firm had just been founded by two portfolio managers from Magnetar, which is a $30 billion, well-established, 20-year-old hedge fund. He chose the firm because he would be the first employee at the burgeoning company. It was exciting to get in on the ground floor; he loved the startup energy.
“That experience taught me two things. One: I’m drawn to more entrepreneurial experiences. And two: there’s real tangible value in entrepreneurial grit,” he says. “To succeed at a startup, you can't just be an investment manager; you have to build a business. I love the business-building component.”
He stayed at Crayhill for almost four years, and more than any other job, that was the one that most prepared him for his role at Ramp. “I joined Crayhill as the first finance hire, and wore many different hats while also being an investor,” he says. “When I first started, I had a specific set of mandates, but at a startup, the reality is: you also have to pay attention to the business-building stuff. You have to build a team, be able to communicate effectively, and be able to be a mentor and a friend to the people around you.”
A decade into his career, Alex began to have the entrepreneurial itch to help build a business again. He was working at Sculptor Capital by then and had begun searching for the next opportunity. Always the analytic thinker, Alex realized that hedge funds were dwarfed in relative GDP share by companies on the operator side. “On top of that, accelerated personal and professional growth also mattered,” he says.
In July 2020, when he joined Ramp, the company was barely a year old. Alex arrived with a mandate to build out a capital markets program and a strategy around the balance sheet. His years on the buy side gave him specific insight into how Ramp’s business should operate and how they should manage working capital. But his other important role was to bring Ramp’s financial reporting in-house.
Alex had honed his entrepreneurial skills in his years at Crayhill and began to build a finance team at Ramp. Accounting was an important first step, and he knew he needed to create a dynamic finance operation. “As a leader, hiring is integral. There was probably one point when I was probably spending more than 50% of my time recruiting, interviewing, and sourcing candidates,” he says.
But finding the right candidate is only the first step in team building. “I certainly place a lot of emphasis on nourishing and mentoring new talent,” Alex says.
Over his three years at Ramp, Alex has grown the finance team to 13 people — they are divided between strategic finance, FP&A, accounting, payroll, and capital markets.
Alex recommends a book called The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success. “The main thesis is that your job as a CEO or a management team is capital allocation and thinking through how to efficiently allocate capital,” he says. “Ultimately, that's the role that finance plays: as a startup, you are constantly making a series of short-term and long-term bets.”
Some companies lean towards instant ROI plays like Facebook ad buys, while others invest in hiring engineers for projects that may not ship for several quarters and may not monetize for multiple years. “The question really is, if you're trying to maximize long-term value for your stakeholders, what is the right decision there?” he says. “If you think about it, that capital allocation exercise is an investment decision. So, having the lens of an investor in an operating role is a valuable combined hybrid view.”
For any company, capital-allocation decisions are paramount, but it’s especially important for a rapidly growing startup like Ramp, which more than doubled its revenue run rate in the first six months of 2022 and doubled headcount YoY. “It's kind of like chaos theory, where any initial bump can have unintended consequences years down the line. We want to make sure that we are curating and course-correcting constantly,” he says.
That’s why Alex stresses that good reporting is table stakes for a growing business. “And I don't mean just accounting. Accounting is essential, but you also need good business intelligence, good internal reporting, and good metrics,” he says. “If you can't collect and measure good data, you can't make good decisions.”
At Ramp, he’s built a financial team obsessed with creating and leveraging clean, unbiased data. His years in investing demonstrated how advantageous good data can be. It’s helped Ramp grow into an $8 billion company in under three years. “In the hedge-fund industry, when you are collecting data, sourcing data, or buying data, it has to be statistically significant and it has to be accurate and unbiased. Those are the table stakes; you just need mastery over statistics,” Alex says. “I find that, by and large, most people, most of the time, work with very biased data sets and they don't even know it. They think they're making good decisions, but most of the time they're not.”
Hedge funds taught him the value of hard work and getting to an answer. He’s brought that same ethic to Ramp. “If you have questions that you want answers to, there's always going to be an answer,” he says. “In almost every other industry, you can just say, ‘Well, this data just isn't available’ or ‘I don't know who to ask for that’ or ‘that data probably doesn't exist.’ But in the hedge-fund industry, uniquely, there's a lot less respect for the status quo and a lot more respect for just sheer grit and hard work. If the data set doesn't exist, create it, or go buy it, or go partner with subject-matter experts and create that data together. The public market is unforgiving.”