Candace Chan has spent about 16 years in venture capital and nearly nine of them at Bullpen Capital, the firm that has backed companies in the gap between seed and Series A since 2010. Bullpen hired her as its first finance person, and today she is the CFO. Outside the office, she is part owner of Obstacourse Fitness, a strength and conditioning gym in Redwood City, where she also does the books and runs operations. Every so often the two worlds meet, and she brings a group of women from finance to the gym for an hour of strength training.
At a small firm, a lot of the work that keeps the place running lands with the CFO, and Candace calls that part of her role the undefined COO. We talked about how she brought AI into the finance seat, everything that should happen before exit proceeds arrive, how Bullpen’s newer and smaller checks change the math on investable cash, and how she keeps an office whose ages run from the late 20s to the early 80s pulling in the same direction.
Welcome back to Office of the Venture CFO, our monthly series with the people actually running finance at top venture firms. Last month we sat down with Dani Tustin at Long Journey Ventures, who walked us through her deployment pacing tracker and what the firm’s internal voting data revealed about its best companies.
The following content is for informational purposes only and should not be construed as personal legal, tax, investment, or financial advice. The transcript below has been edited for length and clarity.
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On Getting The Job Done
Venture5: Between Bullpen, the gym, and your board work with VCBC, you have a lot going on. How do you manage your day, and how much of it runs through AI?
Candace Chan: Definitely a lot going on. I’m blessed to work for some great GPs. They hired me as their first finance person nine years ago, knowing what my background could be for the firm, and they’ve let me really roll with my position. I work from home most of the week and my hours are flexible. The one thing Eric Wiesen said to me during my interview was, “Just get your work done. I don’t care how you do it. Just get it done.” And that’s basically what I do. I work between my workouts and schedule meetings at specific times. I have an amazing controller and fund admin that I work with, and delegate where I need to delegate.
AI is becoming a more prominent part of my toolbox. It took me a while, and I think a lot of CFOs will agree: it’s taken us some time to accept it and feel comfortable with what it can do. It’s not as magical as one might initially believe. I was thinking, “you just tell AI what to do and it’ll do it.” Well, no. You actually have to spend time to train it like you would another employee. That takes time, and I think a lot of CFOs just don’t have the time to do that.
“You actually have to spend time to train it like you would another employee.”
Venture5: So how did you get started?
Candace Chan: You just have to figure out how to make the time. Start with the basics and ask it questions. Help me summarize a legal document. Read this document and tell me if there’s something I should be concerned about. Slowly, I’ve built on top of that. Now I have it help me review financials on a quarterly basis, and it helps me build the management company budget and update it every quarter.
Venture5: Compliance is part of your job too. How does that shape the way you use AI?
Candace Chan: It’s a tough job being a CFO and sort of being the undefined COO. At a small firm, a lot of my job is compliance and making sure we’re doing things the right way. That’s really hard, especially with AI and all the security issues that come along with it. So I make sure we’re working through our enterprise business software, so it’s protected and anything we put in there isn’t going to go out to the dark web. And slowly I’m learning different ways to build little models that make my job easier.
Venture5: You recently spoke to a group of finance folks who want to be CFOs someday. What did you tell them about AI?
Candace Chan: They were accounting managers, controllers, folks looking to be a CFO in the future. I told them their job isn’t going to go away anytime soon. It’s going to take a while for AI to really understand strategy and decision-making, especially in VC, which is quite different from working for a startup or a big corporation. And at the end of the day, people still want human interaction.
AI is going to help us be more efficient at certain parts of our job, and at some point, it may make certain entry-level positions obsolete. But for the role of the CFO, it’s not going to take our jobs for a very long time, if it ever does.
Getting Ahead of an Exit
Venture5: You push your team to stay two steps ahead. What does that look like when a deal is coming together?
Candace Chan: Anytime there’s a transaction coming down, you can’t just wait for the docs to come in, book the transaction, and let the money come in. Let’s say it’s some kind of exit. You really need to think ahead about the other implications. What else do we need to do? Is there going to be a distribution? Are we going to look at reserves to see if we need to recycle any of the cash? We should probably talk to the tax team and see if there’s anything specific we need to do there. Is it QSBS? What do we need from the company to make sure we have what we need for tax purposes?
There are so many little things aside from “oh, we have a transaction, and we’re getting cash.” If we can get ahead of it and start preparing, number one, we know we’re not going to miss anything in the process. And number two, it’ll be a smooth transaction, and we can get things done as quickly as possible. If it’s a distribution, let’s get that out as soon as we can and make the LPs happy.
Venture5: Who do you lean on to get it right?
Candace Chan: I can get through what I need to get through, but if it’s a complicated transaction, I want to know our service providers really well and have a two-way relationship with them, a partnership almost, versus them just being our auditors or our tax providers. I really want to work with them as if they were an extension of my team. Legal as well. Those are the big ones. I only know so much, so I’m going to rely on the folks who are experts to help me out.
“I really want to work with them as if they were an extension of my team.”
Venture5: What else goes on your exit checklist?
Candace Chan: There are so many different things. Obviously your GPs and LPs are going to want to understand what the multiple is and how it affects the fund’s TVPI and DPI. QSBS, again. Will there be any earnouts or escrows down the road? That’s important, because tax will need to understand if it’s some kind of installment sale where we’re getting multiple payments over time, and then how TVPI and DPI change as those payments come in.
Even knowing where the stock certificates are is a big one. We’re lucky most of it is electronic these days, but some older companies still have paper stock sitting around. It always helps to give the GPs a heads-up. This is the paperwork you’re going to need to sign. I need this information from you. There’s a lot behind it.
Finding the True Investable Cash
Venture5: Bullpen has a distinctive model. What is it, and how does it shape portfolio construction?
Candace Chan: We’re an early-stage investor, primarily post-seed. Originally, we invested in companies that had already gone to market and raised a seed round but weren’t quite ready for the big Series A. We come in somewhere in between and we generally lead the round. Our GPs, our CFO in residence, and other advisors help the companies get to that next Series A raise. That was the original strategy of Bullpen, and it has since changed a little with the times. We’ve been looking at more seed deals, frontier investments as we call them. Smaller checks going into companies we’re interested in learning about and getting into early.
That has really changed the construction of our portfolio. Our main deals are generally a meaningful initial check, and the frontier checks are a fraction of that, so it takes several of them to equal one primary investment. The number of investments in our most recent fund is a little higher because there are a lot more smaller checks in there. It’s evolving as we go along.
Venture5: Where does the CFO come in?
Candace Chan: The role of the CFO is really making sure we understand the cash in the fund. What cash is available, and what reserves look like or could potentially look like. How much do the GPs want to recycle? How much of the fund do they want to invest? If they want to invest 100% of the fund, and usually about 20% of the fund is fees and expenses, we would need to recycle 20%. So it really depends on the GPs and how aggressive they want to be with their recycling.
Then there’s understanding that there’s cash available in the fund, but some of it has to be set aside for fees and expenses. So what is the true amount of investable cash that’s remaining? From there it’s up to the GPs how they want to allocate it.
Venture5: When you recycle, is that mostly from smaller exits, or do bigger outcomes get recycled too?
Candace Chan: Generally in the past, we’ve recycled our first few larger exits so we have that cash. But times have changed a lot. As you know, DPI isn’t what it used to be.
Going forward, I think it’ll be a mix. If you have a big exit, maybe you recycle part of it and distribute part of it. Again, it depends on the partners and what they’re thinking. Are we in a fundraising cycle or not? Where is the fund at the time? There’s a lot to consider. I don’t think there’s one right or wrong answer.
The Undefined COO
Venture5: Many firms don’t have a COO, so legal, HR, and IT often land with the CFO. What have you learned from wearing those other hats?
Candace Chan: If it’s a smaller firm made up primarily of investment professionals and GPs, maybe with a CFO, an EA, or an office manager, and you don’t have an operating partner to help with the operational portions of the business, a lot of times that work falls on the CFO, whether or not it’s really in the job description. It becomes part of running a solid team. The ages in our office range from late 20s to early 80s. That’s a huge span, with generational gaps and different ways of thinking. A lot of my job recently has been bringing the operations team together, whether it’s the junior investment team or the finance team, and making sure everyone communicates so we’re all on the same team and understand the direction the firm is moving in.
Venture5: What does that look like with the junior people?
Candace Chan: I can help younger folks grow professionally and guide them on how to understand what the GPs are thinking and how to navigate day-to-day work. We talk through networking, professional development, and how to work with different personalities. Even in our small group, don’t assume somebody knows what they’re supposed to do. Ask, make sure they understand, have a conversation. A lot of times we communicate through Slack or email or text, and things don’t translate as well as they do in person.
Venture5: Is that a formal development plan, or more informal?
Candace Chan: It’s more informal. Do you think I should work with this type of coach? Should I attend this networking event? What will help me advance my career, and what small things should I be doing? Communicating is the big thing. When I was speaking to that group of future CFOs, I said communication is such a big factor in all relationships, and I’m going to keep saying that word over and over because it’s that important.
I also try to help the junior folks on the team think ahead and think outside of the box. Yes, we need to check the boxes and make sure we’re in compliance. But what else do we need to do to make this firm run smoothly? How can we be two steps ahead, prepared for anything that comes our way? How do we tell the GPs yes, even though we’re really saying no?
Venture5: Saying yes when you mean no. Walk us through that.
Candace Chan: As a CFO, we never want to say no. There’s always a way to get something done. Maybe it’s not a direct path. Maybe it’s a wiggly line. But there’s always a way to do it, or something we can suggest that’s equivalent to what they’re asking for.
“As a CFO, we never want to say no. There’s always a way to figure out how to get something done.”
A lot of it is learning how the GPs work, what they’re thinking, what they prefer, and trying to anticipate their needs. It’s hard. You can’t always get it 100% right. But if you can get it 90%, you’re pretty close.
Venture5: Are you also responsible for the firm’s operating rhythm, week to week and quarter to quarter?
Candace Chan: Not officially. I’ve sort of taken it upon myself after talking to the junior folks and the folks in operations to be the person who brings everybody together, socially and professionally, and makes sure the firm runs as smoothly as possible. In the last year, we’ve started having what we call quarterly ops meetings. It’s the investment team, our director of ops, our controller, and our CFO in residence.
Our CFO in residence works directly with our portfolio companies. He has experience with startups and companies he’s helped take public, and he helps them with modeling, hiring, and advice. We complement each other really well. Each quarter we bring the ops team together and talk about initiatives we’re thinking about, and whether to bring them to the GPs to move things forward. It’s a lot of brainstorming and making sure we’re on the same page about the direction we’re headed.
About Candace Chan
As CFO, Candace leads finance, accounting, and operations for Bullpen and its funds. She brings nearly 30 years of venture capital and operational accounting experience to the role.
Before Bullpen, Candace spent more than seven years as Senior Controller at Versant Ventures, a healthcare venture firm, where she managed fund accounting, tax, and financial reporting for six funds and more than 30 entities in the U.S. and abroad. Earlier, she spent over a decade in the corporate offices of Enterprise Rent-A-Car, leading business management for the fleet services department.
Candace serves on the board of PECFOA (Private Equity CFO Association), a thought-leadership and networking organization for VC and PE finance leaders. She holds a B.A. in Economics from UC Berkeley.
Outside of Bullpen, she co-owns ObstaCourse, a strength and conditioning facility in Redwood City.
