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Gary Dolman, Co-Founder and former CFO of Monzo, in conversation with Capdesk

Ahead of a webinar hosted by equity management platform Capdesk on the lessons learned by ‘startup to scale-up CFOs’, the equity management platform sat down with Gary Dolman, one of the Co-Founders of Monzo, who served as Monzo’s CFO from its inception in 2015 until February 2019.

– How did you find going from a relative ‘lone wolf’ finance lead in Monzo to managing a bigger team? Did your previous corporate experience make it easier?

Being a CFO in a startup is never easy. Right at the beginning of my startup career I was told that every week would feel like the most important week in the life of the company. How true that proved to be. Without doubt my time at Monzo was the most challenging of my entire career. It was also the most enjoyable.

As a ‘lone wolf’ you often feel so far from your comfort zone that you need a telescope to see where you’ve come from. However, it’s incredibly energising to work with a massively talented team that has no fear of taking on new challenges to drive the business forward. Their support and encouragement was truly commendable.

At times my prior experience could hinder rather than help me at Monzo, as everyone was encouraged to think about how you would set things up if IT was not a limiting factor. This was a very different scenario to my prior life in the corporate world where IT resources were limited by the number of skilled people and maintenance of legacy systems.

That said, the problem-solving skills I acquired in the corporate world stood me in good stead, as did my ability to spot and resolve problems quickly. And as the team grew, my previously learnt managerial skills came to the fore.

– What are the major changes in culture between an early-stage startup to a scale-up growth business?

Gary Dolman, one of Monzo's co-founders
Gary Dolman, one of Monzo’s co-founders

In an early-stage startup, you can have ten people standing in a circle talking about their hopes and fears for the day ahead. You know everyone in the company by name and quite a bit of their history. People can rotate jobs and cover each others’ backs. People accept that all jobs need to be done and muck in.

At Monzo I folded up hundreds of letters with prepaid cards to send out to customers; I answered queries on the help desk. It was great fun and there was a real sense of teamwork. As the business scales and slowly becomes more departmentalised, that can’t continue. The challenge is to maintain the startup ethos of being willing to experiment – to try five different things to find the one that really works. As the customer base inevitably increases, experimentation is still possible, but it needs to be managed in a controlled way.

– What are the key challenges that a CFO faces during the startup and scale-up process?

A CFO needs to wear many hats. At the outset they might be a team of one or two that needs to be able to undertake many tasks, many of which they will be new to and, frankly, have little interest in. Running the payroll is a classic example of this. They may well utilise an outsourced accounting firm for core processes but certainly cannot abdicate responsibility. Like the rest of the organisation, finance needs to be lean and accept that ‘scrappy is happy’. Many finance professionals find this very challenging.

As the business expands the CFO must continually evaluate whether they have the people and the systems capability to keep in step with the business. Hiring good people takes time and effort and if they fall behind it can be hard to catch up. The CFO also needs to keep an eye on the technical debt that their department is building up and have a plan and timescale to rectify this. Wherever possible the CFO should look to use automation rather than people. However, this requires IT engineering time – for which there will be fierce competition.

I’d encourage all startup CFOs to find a mentor: someone who has been through it before, who can help them avoid the typical mistakes made in early-stage businesses.

– How can a company keep employees motivated and engaged as it transforms from a startup to a scale-up, eventually becoming a large enterprise?

Options, distributed as part of an employee share scheme, typically play a large part in motivating employees, especially when the company seeks to conserve cash and pay salaries below market value. As the business expands it will face upward wage pressure for a few reasons, including an org structure that requires hiring senior managers who have higher minimum cash requirements.

Strong communication between founders and management teams is necessary to make sure remuneration is allocated fairly between people. I’d recommend setting up an equity rewards scheme and having it regularly reviewed by finance and HR. The two departments need to be joined at the hip on this, because the fallout from a dysfunctional equity scheme can be huge.

One of the other challenges of moving beyond the startup phase is fitting staff to constantly evolving roles. There are some people who only feel comfortable in an early-stage startup and can feel displaced or resentful as company needs change. This is not a crime! It’s very helpful if this is discussed openly within the company. There’s no shame in saying “I’ve enjoyed this leg of the journey and I’d really like to repeat it elsewhere”.

Equally, if more senior people are brought in to deal with the demands of a bigger company, staff need to be reassured that this is not a reflection of their efforts or abilities but a natural part of the growth journey. When assessing employees, there are two questions: Is this person able to grow in pace with the company? Do they want to be part of a bigger (often by necessity more ‘formal’) business?

– What trends have you witnessed for startups over the last five years in terms of objectives and milestones, particularly with respect to balancing growth and profitability?

At the outset the objectives have remained the same: to gather together a strong team of co-founders, to identify a market problem and solution, and to obtain funding to deliver an MVP. Proof of product and market fit follows on from that and then it becomes all about de-risking the proposition by increasing your base of paying customers.

Four or five years ago the main objective at this point would have been growth in customer numbers. That shifted towards a focus on reaching positive customer economics whereby the marginal revenue from each new customer was in excess of the marginal cost. Scaling up the business would then mean that the fixed costs were covered in due course. More recently, there’s been an increased focus on the path to profitability as well as growth.


– Do you believe Europe needs an angel investor revolution to become more like the US?

Capdesk logo

Based on my experience within the UK, I’d say the angel investor scene certainly needs improving. Some of this comes down to a need for stronger financial education at all age levels and the need to appreciate that angel investing has a part in anyone’s investment portfolio – no matter how small. Think of Crowdcube, where £10 can be the minimum stake.

I think attitudes towards failure in the UK need to change. If a business fails in the US, people view it as a learning experience for the entrepreneur. In the UK it is just seen as a failure. As a result, investors become paranoid about investing in a failed company – which speaks to the need for angel investors to take a portfolio view and also be mindful of the tax breaks that exist.

There are some very talented people who would be strong angel investors – both from a strategic and operational advising perspective – but are unwilling to enter the community without a warm introduction.

Finally, the regulation needs a major rethink. Currently we seem to operate in an environment in which a loss represents an opportunity to sue someone, despite the risk of loss being fully advertised. As an example, SIPP providers are totally against a person undertaking angel investing from their own pension assets for fear of subsequent legal reprisals. Given the long-term horizon of angel investing, pension assets should be a sensible source of angel investing – albeit as very much part of a person’s overall portfolio. Seemingly SIPP providers are unable to accept the statement that ‘I know what I am doing, I understand the risk of losing this money and want to proceed’. If this is the legal position, that puts us in a bad place.

– How do you think the funding environment has changed in the UK in recent years? Has it become easier to raise capital in general?

If we consider the years prior to COVID-19 I’d say that the position has improved, and that capital-raising has become more available and the channels to access it more diverse. I was fortunate enough to become a Venture Partner at Antler, a global early-stage venture capital firm that invests in the defining technology companies of tomorrow.

In the last two years, Antler has made 190 portfolio company investments across 30 industries and has opened offices in 14 cities across six continents. I was blown away by the quality of the people on the investment side and the entrepreneurs it backed. Antler is practically mining entrepreneurs out of the ground and turning them into the successful business leaders of the future.

– Do you think the government is doing enough to support the startup ecosystem?

Generally, I think the tax breaks and support for the startup ecosystem within the UK are strong. My personal gripe would be that being a startup bank has some unfavourable elements that need addressing, including:

  • SEIS and EIS are not available
  • EMI share options scheme is not available (the alternative CSOP scheme, in my view, is inferior)
  • VAT on costs can’t be reclaimed
  • Offsetting corporation tax losses is more difficult (a hangover from past sins of bankers in the 2008 financial crisis)
  • Bank levy (again, fallout from the 2008 financial crisis)


– As the rest of the world catches up with the UK in terms of fintech innovation, do you think its crown is under threat?

I don’t think the UK has a divine right to wear a crown of fintech invincibility. That said, in the pre-coronavirus world if you wanted to hire world-class talent – which is what Monzo aims to do – London was where people wanted to work.

– Looking at Monzo as an outsider now, what do you think are its biggest challenges and opportunities?

Monzo is a fantastic company. It began life only five years ago yet has grown to a customer base of over four million people. One of the most admirable things about Monzo is its brand. It has a net promoter score of 75, putting it way above its competitors, and won nine awards in 2019 alone.

As with a number of businesses Monzo has suffered headwinds due to COVID-19 but it has a very strong management team with a plan to move forward. That plan will include the expansion of revenue-generating channels to move to profitability but also continuing growth. The market for current accounts that make money work for the consumer is huge and I see no reason why Monzo cannot make further headway both within the UK and overseas.

By Capdesk

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