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| Larry Schaefer |
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Chief Financial Officer
Larry Schaefer brings to PSI the financial oversight to ensure that leading-edge accounting, budgeting, financial reporting, cash management, investor relations and human resources systems are put in place to meet the expanding needs of our rapidly growing company. He brings more than 20 years experience as CFO, CPA, Controller, Director of Operations and Director of Planning in public, privately held, and venture-backed companies. His mix of rapid-growth technology, manufacturing, and International business is well suited to the tasks at hand. Larry holds a Bachelor of Science in Accounting, an MBA, and has been a licensed CPA in Illinois.
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History
Oct 1999 - Dec 2002
Irvine, California
LLC Co-manager / CFO
Founding member of this software tool company providing sub-contracted services to global systems integration firms utilizing its proprietary technology.
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Dec 1996 - Sept 1999
Dynasty Technologies, Inc.
Redwood Shores, California
Chief Financial Officer
Invited to join my consulting client as a member of the new investor’s turnaround team. Dynasty provided 4GL component-based enterprise application development technology. Customers were corporate IT organizations, systems integrators, and software houses throughout the world. Dynasty followed an enterprise direct sales model and employed more than 120 in three offices in the US and seven in Europe and Asia. The company was founded in 1991 and venture backed.
Served with the COO as a two person executive team during turnaround period of October 1996 to March 1998. Developed fiscal and business strategies designed to bring the company toward profitability in the short term while positioning the company for additional investment to fuel growth. Instilled the idea of target customers to gain visibility within the financial community as a precondition to a private placement. Solicited banks for a private placement partner. Prepared a private placement round in conjunction with Volpe Brown Whelan as a prelude to a planned IPO. Drove investment in a GUI technology start-up including the purchase of shares from Tandem Computer’s venture portfolio. This investment subsequently returned a gain of $5m. Advocated and handled the acquisition of the five sales channel affiliates in Europe allowing Dynasty to receive full margin for client contracts matching the reality of the situation. Advocated and handled the closing of the seven US regional sales offices to focus resources and gain pipeline credibility by centralizing sales effort while reducing expenses. Relocated the HQ to Redwood Shores from Chicago to enhance customer and venture visibility. Administered a worldwide reduction in force reflecting the strategic changes to the operating model while protecting core knowledge in-house. The net effect of these restructuring actions was to drop cash burn from an annual rate of $16m to $4m. Generated the $16m additional investment required during this period from the existing investor base.
Gained control over the worldwide financial operations utilizing an overseas accounting services firm to implement my corporate policies and procedures in our overseas offices. The immediate benefits of local compliance knowledge, heightened internal control, and uniform dashboard reporting immediately produced cost efficiencies and improved cash forecasting. A two-fold initiative of developing uniform customer contracts (utilizing Wilson, Sonsini, et al) and establishing a standard price list met SOP 97-2 revenue recognition requirements in customer application development contracts involving delivery, support, and licenses. A Softrax license tracking system was implemented. The result was no surprise accounting with audited statements by KPMG. Practiced tough, creative cash flow management. A factoring relationship with Silicon Valley Bank was established while successfully exiting from a defaulted line of credit at American National Bank. Secured an asset leasing agreement while successfully closing a Comdisco line. Departmental headcount was restructured to create a lean financial team focused on effective company-wide execution of the business strategies by adding in-house legal while outsourcing HR duties (Administaff) and trimming clerical support with a hands-on style.
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Feb 1997 – Mar 1998 (Concurrent with Dynasty)
Ditto.com
Emeryville, CA
Financial Advisor
A visual search engine, the company was funded by the same European VC fund as Dynasty. I was placed on the payroll in a part-time capacity to support the CEO in the early start-up period. Clarified the e-business strategy with a financial model of the business plan supporting investment required to fill-in the technology, create an infrastructure, and capture market awareness. Negotiated an incentive package for founders necessary to retain technology knowledge. Created financial systems, selected legal, audit, leasing, and banking resources, and hired the controller.
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Sep 1995 – Nov 1996 (detailed below under Schaefer & Associates)
May 1994 – Aug 1995
Seagate Software / Palindrome
Naperville, Illinois
Director, Operations and Planning
I joined my consulting client when the Board contacted an investment bank to begin IPO/acquisition preparation. Palindrome was the market leading developer of backup and archival software for the Novell platform with sales in the $20m range and employees in the high 100’s. Their product solution consisted of software bundled with OEM hardware that was sold through distribution channels with strong customer support. The company, founded in 1988, was venture capital backed until its acquisition by Seagate Software in 1994.
Pre-acquisition focus as an employee was to continue the financial planning and budget analysis I had been performing as a consultant. My in-depth financial model facilitated board analysis of run rates, bench marking against industry ratios, and performing “what-if” analysis designed to control cash burn and maximize valuation. The relatively low per unit channel sale revenue matched against the unexpectedly complicated customer support issues and high turnover in the VAR channel continued to cloud the viability of the business plan. These issues forced rigorous drill down planning to restudy costs and revenue assumptions at the most detailed level. During this period I developed an intricate financial modeling process I continue to follow today. During the negotiation phase of the Seagate acquisition this same financial model was easily adapted to produce “combined entity” models supporting valuation discussions.
Post-acquisition duties as a Seagate employee focused on operating efficiencies. Initiated a program of outsourcing software fulfillment to reduce cost by 30% in under-utilized assembly labor, minimum order purchases, and waste while improving QC, serialization control, and shrink-wrap appearance. Tackled a serious hardware inventory obsolescence and overstock situation caused by customer in-warranty exchanges which built-up a supply of vendor repaired, slightly used machines. I negotiated with the vendors to extend warranty periods adding three months life to this inventory. I advocated a change in the customer warranty program eliminating cross shipment of replacement units instead offering one-day repair turnaround achieved by certifying our shop as a manufacturer’s repair center for our OEM branded items. I initiated a program converting the old inventory drives into a rental asset capable of recouping their cost in conjunction with a refurbishment repair program. Finally, a fire sale on same spec used machines providing customers an economical on-site redundant system without disturbing our sales channel relationships. These various programs cleared out slow moving and obsolete inventory in excess of $1.8m without a write-off, improved customer satisfaction, and turned repairs into a profit center.
Jul 1987 – Apr 1994 & Sep 1995 – Nov 1996
Schaefer & Associates
Lisle,Illinois
CPA Sole Practitioner
Served as consulting CFO with several start-ups including Palindrome, Dynasty, and Apropos, a developer of client/server based call management systems. Developed the marketing, sales, and communications skills needed to survive as an independent consultant for more than seven years.
Focused on providing the insight and actions to address the financial issues involved in moving from a technology idea to a revenue producing business with a growing market valuation. Worked closely with the founder to build viable business plans capable of attracting investors and sustaining due diligence. Created financial systems and hired accounting personnel for the newly funded start-ups.
Apr 1983 – Jun 1987
Triangle Home Products, Inc.
Chicago, Illinois
Controller
Manufacturer of lighting components operating three plants in the US with thirty-three regional warehouses to meet the JIT requirements of the modular housing industry.
I joined this former audit client, reporting to the CFO, responsible for SEC reporting, bank line compliance and the audit relationship. Moved the company from manual accounting to a Lawson accounting package. Successfully spearheaded implementation of an inventory control system for the warehouses tied to the new corporate accounting software reducing inventory 25% while increasing customer satisfaction.
Jul 1978 – Apr 1983
Sunbeam Corporation
Oak Brook, Illinois
Group Controller, Industrial Division
Returned to Sunbeam after a stint in public accounting and grad school. Reported to the Executive Vice President of Sunbeam. This was a valuable period providing insight into executive operations at the Fortune 500 level and the entrepreneurial management style of the subsidiary presidents (mostly former owners).
Responsible for reporting Group segment numbers and budgets. Served in interim financial positions within the Group as required. Represented Group in divestments, performed preliminary due diligence at acquisition candidates, initiated program to leveraged resources through collective purchasing.
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Jun 1973 – Jun 1978
Ernst & Young
Chicago, Illinois
Senior Staff Auditor
Promoted to senior in-charge working primarily on one large SEC client, Stone Container.
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Jun 1971 – Aug 1972
Sunbeam Corporation
Chicago, Illinois
Financial Management Trainee
Recruited from college to this program of rotating accounting duties. Prepared for CPA exam evenings. Left to return to school for MBA program and teaching assistantship.
EDUCATION
Masters in Business Administration,
Northern Illinois University, DeKalb, Illinois - 1973
Bachelor of Science in Accountancy,
Northern Illinois University, DeKalb, Illinois - 1971
Certificate of Completion, Liberal Arts,
University of Chicago, Chicago, Illinois - 1987
Certified Public Accountant,
Illinois – 1972
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