Attention: This is a machine-generated transcript. As such, there may be spelling, grammar, and accuracy errors throughout. Thank you for your understanding!

Rafael Casas: [00:00:05] Welcome to Crypto with accountants powered by Bitwave, where we talk with technologists and crypto enthusiasts as we discuss current events in economy, politics, technology and digital assets with thought leaders from around the world. Today we have a great friend of Bitwave and someone who has an immense wealth of knowledge in the Web3 accounting profession. Emily Cheshire. Emily is a leader of Aprio Cloud's blockchain and cryptocurrency team, providing outsourced accounting, technology solutions and blockchain consulting to CEOs and CFOs. Emily, thank you so much for being here. It's always a privilege to speak with you. Also, Emily is part of our Bitwave Partner Advisory Council, so the amount of knowledge she brings to the the community at large, as well as Bitwave has been so appreciative. And again, thank you so much for being here.

Emily Cheshire: [00:00:57] Thank you. Thanks for having me.

Patrick White: [00:00:59] So, Emily, Yeah, thanks for thanks for coming on. We it's always a delight to get to chat with you. So I think we're we're I'd love to start with just we always like to start with people's, you know, sojourn into crypto as, as kind of day one, you know, could you just tell us what what got you interested? I mean, was it you were at Aprio and you you sneezed at the wrong time and ended up having a bunch of these clients? Or was it was it more a more deliberate entry into crypto? Oh.

Emily Cheshire: [00:01:27] Uh, a bit of both, I would say so. I completely agree. I feel like everybody kind of stumbles in in their own unique way. And it's definitely one of the most, like, fascinating things. I always ask the same. So I've always been like, Really? I was the kid who was obsessed with money, right? And like and I mean, like, Monopoly was my favorite game and everyone's ass, and I was like 86, and I just, like, loved it and like, so I've always been really interested in it, like, personally. So when I first started hearing about like, Bitcoin, you know, like this magic Internet money, I just thought it was like the coolest thing.

Patrick White: [00:02:06] It's basically Monopoly Money 2.0.

Emily Cheshire: [00:02:09] So basically Monopoly money 2.0 that you can actually make money on for real. I just thought it was like the most coolest thing.

Patrick White: [00:02:15] And that was that also how you got into accounting in general? Like you, you just loved you love that entire aspect of money and how it all works and how it flows pretty much.

Emily Cheshire: [00:02:25] I mean, I was the I was the, the, you know, the young kid that was like, I want to make as much money as possible. What can I do? I need a business. And I was like, I have no idea what business I'm going to start, so I might as well learn how to run a business or I'll become an accountant. And then I realized I just love working with everybody else's businesses. So here I am. So to your point, that was kind of like that combination. Um, and then, you know, like on, on the personal side, you know, like when Bitcoin first came in, like that was really cool. And then you start hearing about like, you know, Ethereum and then it could suddenly start doing all these, like, really cool things and you know, you I really got interested in Post-It of 2017, 2018, and then things started going a bit crazy and it was just so much hype and it was just it, this, this industry is bonkers and that's why. Yeah. And then kind of on the professional front, I mean here at Aprio, we've been working with kind of crypto clients for like a decade now, so a really, really long time in the grand scheme of like crypto itself. And a lot of that work was centered around kind of the audit side, the tax side, and you know, like on the outsourcing side we had a few clients and it was starting to grow and you know, I kind of could see where the industry is going. And, you know, like today it's very kind of crypto native. Everyone's sitting there like development phase, everyone's working with each other. But you know, even like now you're seeing like people like Shopify and like they're building in like.

Patrick White: [00:04:02] There was a big stripe. The big Stripe announcement yesterday of native native Usdc integration to Stripe. I mean, if that's not an indicator of, of things of of movement in the industry, I don't know what is.

Emily Cheshire: [00:04:14] Exactly like, it's huge.

Patrick White: [00:04:16] Before we get too deep into like the crypto stuff here, let's just really briefly, can you tell us a little bit about Aprio? And this isn't meant to be too much of a shill, but tell us a little bit about Aprio, and I'd love to ask a few questions about on the audit side too, just because that's one of the hot topics now is is how crypto companies are auditing. And I believe Aprio does do that, right?

Emily Cheshire: [00:04:34] Sure. Yes. Yeah. So we're the 26th largest CPA firm in the US.

Patrick White: [00:04:41] That's funny. That's funny. You know that off the top. So is that is that a measure like, does everyone know that? And like it.

Emily Cheshire: [00:04:47] Came out recently and it.

Patrick White: [00:04:48] Pops up, you're like, we're 25 now. Screw you, you know, regional.

Emily Cheshire: [00:04:54] Well, we're actually the fastest growing firm too, so I probably should have led with that one, but for full kind of full service. So like you said, tax audit, accounting. Our you name it, we do it. And, you know, we've built a really strong like digital asset segment team to here. So lots of cool things happening.

Patrick White: [00:05:14] And you guys are doing and I, I don't want to put you on the spot here, but you are doing audits right now for digital asset companies, is that right?

Speaker4: [00:05:21] Yes. Yeah.

Patrick White: [00:05:22] And the only reason I mentioned this is that not everyone like the Big Four is sort of step back from doing audits of digital asset companies. Obviously, Armanino wrapped up that business who was well known for it. So Aprio I think is one of the not there's maybe a handful of folks out there that are still kind of doing doing that piece of it, but that's not really your side of it, right? You're on more of the outsource CFO part of it, right?

Speaker4: [00:05:44] Yeah.

Emily Cheshire: [00:05:44] So, so yeah, I mean, to your point, we definitely are still doing audits, we're still working with digital asset clients. And you know, that's an area that, you know, we're committed to the space, we're managing risks and obviously there's a lot going on and we're having to be very careful, but we're still in that space and yeah.

Speaker4: [00:06:02] Anything interesting, anything.

Patrick White: [00:06:05] Interesting to talk about on the audit side before we because we'll spend the rest of the whole talk here talking about accounting. Is there anything interesting to talk about on the audit side? Like are I know there's been you know, there's the PCAOB made some movements towards potentially releasing some sort of steps, some sort of like actual directives for how to do a proof of reserves. Anything interesting on that that that that you guys are seeing any interesting requests? Are you is it still a fun place to be or is it just all nerves right now?

Speaker4: [00:06:32] I will say it's.

Emily Cheshire: [00:06:35] We're still recovering from all the companies pulling out. We're still having to be really, really careful on that front, too. You know, the proof of reserves, it's still an area that there's a lot of contention around. And, you know, right now we don't do that service for clients. But, you know, I would say if there's anyone that's needing an audit or like looking into it, the key is to prepare for it. So, you know, like audit readiness is key. And I think a lot of the firms that are still in in, you know, working with companies with audit, you know, the key is basically effectively like an audit before the audit to make sure they're ready for the audit. Because there, you know, there is typically a lot of recommendations and things like that. And that's definitely a change that we're seeing in light of everything that happens.

Patrick White: [00:07:25] Yeah, Yeah. Any any recommendations to businesses that are out looking for audit partners right now in terms both like audit readiness as far as you know, and also what to do with your books and things like that. I mean, besides, you know, doing your books, using bit wave stuff like that. But you know, more general.

Emily Cheshire: [00:07:41] Yeah. I mean, general is, you know, it doesn't just encompass the accounting. It also encompasses a lot of the internal controls, right? So I mean, you take FDX and they had expense approvals via Slack I think, or something.

Speaker4: [00:07:53] Crazy for.

Patrick White: [00:07:54] What it's worth. All right. Of all the things that FTX did, that was the one that bothered me almost in some ways the least, because at least it is documentation, you know, like compared to just moving $1 billion around, like there is a history there of putting a little rocket emoji when and like there's a real world where if, if they'd actually been consistent where like he always used the same approval true like emoji, it could have been really like there's a world where it was almost cool.

Speaker4: [00:08:22] Like sunglasses.

Emily Cheshire: [00:08:23] Emoji means yeah.

Speaker4: [00:08:25] Like it was this close.

Patrick White: [00:08:26] To being to being fun. Because even, like, don't think it's a funny thing because like I use, we use Slack, we use divvy here and we use Slack. I get a little divvy message in Slack when I need to approve certain things and I hit the approval button. So like there's something that's almost really cool about it. But then they just did it absolutely the worst way possible.

Speaker4: [00:08:43] It was so close.

Patrick White: [00:08:44] So close.

Emily Cheshire: [00:08:45] But you know, like this really just making sure, you know, like I said, like their internal controls. So it's not just the good records, it's the internal controls as well. And I think that's getting a lot more attention. So, yeah.

Speaker4: [00:08:57] You know.

Emily Cheshire: [00:08:57] People just need to think about the bigger picture rather than just kind of the numbers.

Patrick White: [00:09:02] Yeah, because we talk about that a lot is that people in the crypto space tend to be good. There's one control we tend to be good at, which is operational security around private keys. We tend to think deeply about that. But then almost everything else is tends to get sort of waylaid and that, you know, I mean, that includes expense reports is obviously a great example. Treasury management practices, all of that. What do you what do you think is like the best advice to someone as they're as they're embarking on a controlled journey? I know this isn't exactly your your specialty, so you're we're kind of like taking you out on a limb here.

Emily Cheshire: [00:09:34] But I've dabbled. I've dabbled. But by no means the expert. I mean, so for a start, I would really just say it kind of like everything is really it's much easier to get things in place from the start while you're small. Then once you've got this massive juggernaut and you're trying to put all this stuff in and also when it relays to the need for an audit or, you know, you're going to need one later down the road, finding an auditor is A takes is taking months for companies right now what used to be a fairly. Quick process is just taking months and months and and you chances are the autos are going to make sure there's some audit readiness process in place beforehand, too. So it's really the you've got the processes, you've got the audit readiness and then the audit. So it's like a step by step process. So, you know, really just planning ahead and just making sure because, you know, the second you need an audit, I mean, we've seen companies that have said they urgently need an audit to close on a deal or to get investment.

Speaker4: [00:10:38] Good luck. It's just not going to happen like that.

Patrick White: [00:10:41] Yeah, well, you know, and Emily, you and I were just in Austin for consensus and the Enterprise Digital Asset Summit. The Bitwaves, Bitwaves, big conference. And I. I was talking to someone who had been in onboarding. What do they call it? Compliance. Like getting through the compliance and the onboarding review of an audit firm for going on 5 to 6 months. This was a crypto native company and I think that's become a bit of the of the the norm here. One question I like and this again this is this is off the limb for you a little bit so feel free to to not answer any of these. You know, I think audit readiness tends to be any sort of readiness tends to be a four letter word where people are like, oh, no, this is just the Big Four trying to milk me for money. That's I'm not doing readiness. But I you know, I tend to think when it comes to crypto audit readiness, actually, if you're doing it right, you can turn it into a way to actually save money on the other side.

Patrick White: [00:11:36] So I often tell the story of of one of our first bigger, bigger clients that was doing an audit with the Big Four. And we showed up to one of these meetings and this was like our first it was like the audit kickoff meeting. And so they brought their team, they brought us, and then the big four brought their team. And I, I swear to God to this day that the the cost of that meeting from the big four side was more than our entire license with this client. I mean, because they brought something between 50 and 60 people from the from the auditor, the Big Four side. And so it's one of those things like there's do you have any tips to share or like how you think about getting ready for audit to not just as audit readiness in the abstract, but also like if you start thinking about audit readiness as a way to save some money and not have 50 people show up to A audit from your from your Big Four auditor Yeah.

Emily Cheshire: [00:12:30] I mean a lot of the the viewpoint is really about kind of switching your view because really the audit readiness is just kind of it's basically a check to make sure, you know, is everything in order, is everything in a good spot? And if you know that, it is to your point, you know that the audit is going to go a lot smoother. You know that, you know, and that's going to get reflected in the time which you're going to get reflected in those fees. But not only do you have, you know, that that kind of peace of mind, but equally frequently what can come out of the audit readiness process is kind of recommendations that can actually lead to like, you know, improved operational efficiencies or or to, you know, make sure that you've got processes in place now so that when you do need certain things like a funding round and stuff like that later, you're already prepared. So there there is kind of a potential to see like an ROI from an investment point of view. But there's also an ROI in terms of, you know, like the operational side to that, to your point, can get overlooked when you're just looking at you're looking at time and cost, right? Those are the things that you see. So there's some other points to it too.

Patrick White: [00:13:45] People mean the auditors just want to see that. You're thinking about a lot of this stuff, too. When it comes to a lot of the control stuff. They want to see that you just actually have put some brain cycles into it at the end of the day as you're getting into it. Sorry, Raphael. Go ahead, bud.

Rafael Casas: [00:13:57] No, I was just saying, I appreciate what Emily, you know, in previous discussions that I've heard her talk about driving home, the fact that there's, you know, a lot of these companies are trying to go a million miles an hour, but they forget, you know, the business fundamentals. That's what Emily is really kind of honing in for, to be prepared for that stuff. You have to start with a good foundation and just focus on the business fundamentals first.

Patrick White: [00:14:18] So, Emily, let's let's get back to your your sweet spot, which is the accounting, the accounting and outsource CFO side of all of this. I'm going to ask you a question that's a little bit funny on that side. But yeah, tell me what as you know from a little bit less of the outsource accounting side, a little bit more of like the CFO side. Let's talk a little bit about what it means to be a crypto CFO, because it's not quite like being a CFO for a. You know, I pick on people who repair pool equipment. I don't know why I think about like when I think about like a, like a local small business, I think about a guy who goes out repairing pool equipment. I don't know why, but like a CFO for a company like that that is very traditional, very labor driven, is very, very, very different than CFO role for a. Crypto company. Talk to me about how you how you think about the CFO role at a crypto company.

Speaker4: [00:15:09] Sure.

Emily Cheshire: [00:15:10] Um, yeah. So to your point, I mean, it's pretty unique and a lot of it's driven by the, the nature of the industry and a lot of, you know, you've got the internal factors and then the, the wider macro kind of regulatory side.

Speaker4: [00:15:23] This constant.

Patrick White: [00:15:24] Flip flop of micro to macro that you're dealing.

Speaker4: [00:15:26] With. I mean, that's kind of just like constant.

Emily Cheshire: [00:15:29] So, I mean, you know, there's a lot of differentiators. So, you know, the first thing that's kind of key and this isn't necessarily part of it is forward looking. So like the role of a CFO is really to be kind of forward looking and strategic and plan, right? You know, the accountants are controllers, the historic stuff that's done. So, you know, it's really to kind of plan for what's next. And, you know, one of the unique things about this industry is that what's next? Who knows, Right. In terms of the regulations, in terms of the stuff going on with the SEC, it's almost in.

Speaker4: [00:16:07] Terms of the price.

Patrick White: [00:16:08] I mean, come on, Bitcoin's at 30 K right now, which is kind of crazy. If you were if we were like sitting here four months ago right after FTX, like no one would have expected to bounce back like this.

Emily Cheshire: [00:16:19] Exactly. Like it's doubled. It went to, like, below 900 bucks at one point.

Speaker4: [00:16:24] Yeah, Yeah.

Emily Cheshire: [00:16:25] Crazy. And then there's ordinals come along and, you know, I always kind of describe it as kind of like a day game of dodgeball. And you've got literally all these balls like flying right at you. And, you know, you almost just kind of check the crypto news website and it's like, Oh, like seriously, like what today? Yeah. So, you know, it's about kind of getting ahead of that. And that's a, that's a huge point of it, right?

Patrick White: [00:16:50] Because from a CFO standpoint, does that mean not playing the game sometimes? I mean, does that really mean like, like do you do you tend to offer Treasury advice to your clients that are like, guys, you know, love you to death, You're sitting on 90% of your working capital is in Bitcoin right now. There are some risks if you do that. Let me outline them. Like, do you mean do you tend to have that kind of advice at the at the macro level?

Speaker4: [00:17:17] Yeah.

Emily Cheshire: [00:17:17] I mean, I would say Treasury management has been the hot topic since all the banking stuff happened. You know, we had clients that were obviously banking with those banks. And you know, a lot of it is about, you know, what's their appetite for risk. And this industry, it can be pretty high.

Patrick White: [00:17:37] You're asking the wrong group of people. When you ask like, what's your risk appetite? Like, well, infinite. What's yours like?

Emily Cheshire: [00:17:44] Yeah, like we're in crypto. What do you.

Speaker4: [00:17:46] Think?

Emily Cheshire: [00:17:47] So, you know, it's about, you know, where does it mean it's not just like what banks to hold fiat. It's, hey, are you going to, you know, what about your crypto treasury too? And, you know, what's your horizon? When do you need it? What's your cash burn? You know, like it's kind of planning all that stuff in which is really interesting and really unique perspective. And then you throw in stuff like Bitcoin Halvings and the cycle when you try and plan that stuff into. So definitely like way more than, you know, to your point, the poor guy that's.

Speaker4: [00:18:19] You know.

Patrick White: [00:18:21] I think, I think I was talking to somebody at a happy hour who was starting a business repairing pool equipment in like Arizona. And that's how I got on that. And I just have never forgotten that conversation because, like, there's not you can't imagine a business further away from like doing a startup than repairing pool equipment. Like they're literally there are two opposite sides of the world. Like they're both like going out and starting a business. You call both of yourselves, call yourself an entrepreneur. But they're just they couldn't be more different. Okay. So okay, let me I do want to do one really quick layover here on banking, which is what are you telling your clients right now around banks? Do you have banks that are crypto friendly? I'll I'll start just to give a a brief example of the the the landmine that is crypto banking. We've we've banked with FRB forever and I love and this is a whole different podcast I'll have to do is like just crying and I'll bring a glass of wine and cry into it because I'm so sad about I'm so sad about the unwind of FRB because I, like, I loved my banker there. We got beers. He's just the best human being alive. And they just it like honestly kills me. This idea that a bank like that can exist, like a real relationship driven bank. And so but the all of this is a precursor to say that we had we had applied for account an account at Jp Morgan and actually gotten turned down because they were it was either they weren't touching crypto or they weren't touching high tech and they got me anyway. So like jokes on jokes on you guys. But what are you what are you seeing from that side in terms of what banks will actually work with crypto companies? What's the vetting process there looking like? Any advice to offer?

Speaker4: [00:19:57] Yeah, I.

Emily Cheshire: [00:19:57] Mean, we we have been going through a huge process because you know, the go to banks were. The banks that everyone had that they don't have anymore. But, you know, typically we've been we've got a Treasury management team here at Aprio and I've been working with them in this area, too. And, you know, to your point, a lot of the large national banks, they they just don't don't want to touch any crypto companies. They just look at it from a, you know, the revenue that they get. I mean, compared to their whole portfolio is a drop in the ocean.

Speaker4: [00:20:31] Right?

Patrick White: [00:20:31] And then compared to the risk that they're potentially taking on.

Emily Cheshire: [00:20:34] So, you know, you basically most cases, unless you've already got an existing relationship there or somehow you magically get in, you're not looking national, you're looking regional. I will say there is quite a few if you know, and you touch on like the relationship point of view, there's quite a few kind of community banks which again kind of carries a slightly higher risk. Yeah.

Patrick White: [00:20:58] And as we are seeing right now.

Emily Cheshire: [00:21:01] Yeah, yeah, exactly. And it's really you're going down to the like regional and if not community kind of banking level to kind of get banking. So, you know, we used to say to clients, you know, this is a risky industry and a bank could turn around at any point and just say, hey, we.

Speaker4: [00:21:17] Actually just don't even.

Patrick White: [00:21:18] If they accept you once they get sell boots your boots you later.

Speaker4: [00:21:21] Yeah, Yeah.

Emily Cheshire: [00:21:22] So we used to say, you know, you want to try and work with, you know, have a primary one but have like work with three, have a backup. I don't know if that's enough right now. So, you know, we've been building a lot of relationships, but again, it's with the smaller banks.

Speaker4: [00:21:38] Yeah.

Patrick White: [00:21:39] We we ended up going with I think at this point we're now so still with FRB. So I guess JPMorgan. And then we ended up doing a deal with BMO and I think we had an existing relationship there. So that and then we also are working on fidelity, not fidelity. Um, Franklin, Franklin Templeton I think is the two that we've been working on. So I mean, I don't say that. I mean, I'm not trying to share the banks. I'm like, it's just, it's honestly, it's very hard for crypto companies to get banked right now. So, you know, when you find companies like when you find banks that'll help you share wide.

Speaker4: [00:22:14] Yeah, I.

Emily Cheshire: [00:22:14] Mean, we've built a list of about ten right now that we've kind of directly spoken to and a lot of them are still, you know, please speak to us first and we'll check, right?

Speaker4: [00:22:24] Yeah, we'll check. Yeah.

Emily Cheshire: [00:22:26] It's still still like that, even for the smaller ones.

Speaker4: [00:22:28] So.

Patrick White: [00:22:29] So let's get back to the to other CFO stuff. So before we deep dive into the accounting side, so other CFO stuff that we you touched on briefly, which is cash, which is like cash flow forecast and burn and burn rate and runway and all that kind of stuff. If you if you are working with a client who insists in keeping their money in crypto, I assume you guys are using kind of models that would approach a forex. You know, if you're sitting on $1 million in euros, are you are you guys actually actively doing best worst case Monte Carlo simulations and fpna like that? I mean, how do you sort of approach that type of that type of thing?

Speaker4: [00:23:04] Yeah, I.

Emily Cheshire: [00:23:05] Mean, it it's all kind of to your point custom because you've got the volatility of crypto built in and, and you know, like it's a case about modeling, you know, do we think it's going to go up or down? And what happens? What does that mean? What does that do to your runway? How does that all impact everything And and the models, you know, like normal, you know, like if you take a normal kind of forecast and you might say, oh, well, revenue, you know, if that changes 5% or 10%, but no, we're going the what about 100% swings in alternate?

Patrick White: [00:23:38] Yeah. And then does that and then do you as you as you're tracking to those models, do you do you discover interesting things or is it all just sort of feel like chaos theory at the end of the day?

Speaker4: [00:23:50] Oh, see.

Emily Cheshire: [00:23:52] It feels like chaos theory. However, it still feels like chaos theory. However, it's just it's real.

Speaker4: [00:23:59] Yeah.

Patrick White: [00:24:02] So just without the dinosaurs.

Emily Cheshire: [00:24:05] Yeah, exactly. It just. It's. It's just crazy. And a lot of it is really just to go around, you know, like the, the core conversations are like, you know, there's still so many that are pre-revenue, but they've got quite large investments that are kind of sitting on, you know, quite a lot of capital. So it's about like monitoring runway and and how quickly are you going to get to, you know, revenue generating and what's that what's the revenue strategy, What's your customer acquisition strategy? And and that's where it gets really cool. And then the models are going to help kind of derive those sort of decisions and directions.

Speaker4: [00:24:41] You know.

Patrick White: [00:24:42] I want to come back to that in one second, but in on on the last thing on forecasting and models here, do you have any clients that are doing any sort of hedging at this point? So they're sitting on $1 million of ETH and they want to leave it in there, but they buy some options just to sort of balance it out. Like is that is that a strategy that people are bringing or not really?

Emily Cheshire: [00:25:04] I'll tell you what, I actually haven't seen that that much, I would say. I would imagine you're probably going to see that more on kind of like the fun side, whereas I typically work and we typically work with a lot of like corporations, like web developers, that kind of thing. And, you know, a lot of them are typically holding in like BTC and that's kind of like long term or, or eath, right? Yeah. They're not holding crazy.

Speaker4: [00:25:33] Crazy. Yeah.

Patrick White: [00:25:33] Long tail coins. Yeah. Yeah. So, okay, so let's get back to the I do actually want to do a little brief stopover here in we're doing a lot of brief stopovers. This is super interesting because we don't we don't have this discussion of like from the CFO side and I really am enjoying this. When you are thinking about customer acquisition and stuff like that, how have you been thinking about the TAM for the crypto market? Like, I know this is a really specific question, but like do you tend to say, okay, well, you know, company that's making nfts everyone in the world uses sneakers, so everyone in the world is your potential. Tam is part of your TAM here or do you do you use some other sort of like saying like, well, we think we're you know, you guys have 50% of the market, so we're going to call the market this side. How how do you start to actually think about like the TAM for your customers when you're either doing forecasts or revenue or customer acquisition?

Speaker4: [00:26:26] Yeah, Well, I will.

Emily Cheshire: [00:26:27] Say, by the time we typically working with a client, they're normally not, you know, like in the in their kind of back room, kind of really early startup they've got funding. So, so by the time we work with them, they typically know that or high level they say like this is the market, this is who we're targeting. And then and then from there, a lot of the time it's the, well, how do we how do we get to them and what's the revenue? What is the size of that, that market? Right. But, you know, one of the things I will say that we struggle with is and I'm sure you've seen it, we see it all the time is the well, we were building this project and that's where we raised the funds. But actually now there's this new shiny penny and we're going to scrap this and go do this.

Speaker4: [00:27:14] Yeah.

Patrick White: [00:27:14] And it's an interesting it's an interesting market in terms of like builders with high velocity of maybe like high ad propensity is maybe a good way to say it. And that and that then causes other issues too, because that also causes issues with your banking. There's other there's other knock on effects of that, like one of our one of the people that we know that that did this moved from doing kind of defi work to doing more of a easy to access hedging strategy. And then the protocol that they chosen as their as one of their major protocols got hacked. And so basically because of their pivot, they then ended up like losing a lot of the money. And and that sort of ended up being a pretty, you know, bad day for their business, I think is a way to say it. Yeah, it is it is a really interesting there's in startups are like that in the terms in sense that like you really do have to stay you have to stay both focused, but also the ability to pivot at a moment's notice. Do you notice because you've worked with startups for a very, very long time now you notice this is a bit more in the crypto startup.

Speaker4: [00:28:16] World, way, way more.

Emily Cheshire: [00:28:19] You know, I would probably say pretty much everything I see in the crypto world is, is ten X compared.

Speaker4: [00:28:25] To mean like.

Emily Cheshire: [00:28:27] Saas companies have the like build fast break things, fix it, pivot. But in crypto it's not like build fast and break things. It's like build fast and then see next few shiny penny and build that fast. I've never seen anything like it. And but it's, it's just the nature of the industry and the technology and everyone's so excited and there's all this potential.

Speaker4: [00:28:51] Now the world.

Patrick White: [00:28:51] The world's just speeding up in general, you know, it's one of those things you look at like like I sort of I love ChatGPT. I mean, I joked when we were at Edas that we'll have to invite it next year because literally, like half the people quoted Chatgpt on some part of their of their talk. But you look at the speed of development of that and that's a hint as to just it's getting easier to build stuff. It's getting easier to to pivot and kick out good UIs and all this sort of stuff. So we're just seeing the velocity of all this going up and I don't know if that's good for the world or not. Like I don't, you know, our salespeople have have trouble already keeping up with the new features we push out, let alone like if you if you just push that and push that and push that. Yeah.

Rafael Casas: [00:29:31] Something that you brought, you brought up in, you know the great topic of the outsourced CFO, which is obviously a huge amount, a lot of firms. And I just wanted to get your opinion. We've talked a lot of leaders and in the in traditional side and, you know, and they see that there's a lot of huge potential from the digital asset side. Segwayed into the practices. What are your thoughts on that?

Emily Cheshire: [00:29:52] My my kind of thoughts on that is it is a digital assets as a whole is a growing industry. So to to your point, kind of like outsource.

Speaker4: [00:30:03] Riders.

Emily Cheshire: [00:30:04] They're going to come across it one way or the other at some point. Right. And it's a it's a huge opportunity. But the the learning curve is steep. Yeah. And and it takes a very long time to get up to speed, you know, like the you know, and our traditional Plaid would say interest. Where is it staking, Is it you know, like even the terminology is, is different.

Speaker4: [00:30:28] So how.

Patrick White: [00:30:29] Do you. It's a great question. I love that we got here. So when you guys bring on new accountants into your into your practice area, what is the what's what is the boot camp like? Is it just you chuck them into the deep end of the pool, give them a metamask wallet and tell them to to go like, you know, figure out how to get into a compound pool and don't come back till you get it. Or like, do you guys run people through training sessions?

Emily Cheshire: [00:30:52] So yeah, I mean, we do. We do a lot of training. And one of the things I'd like say to anyone that started is the you're going to feel like you're being hit by a freight train and you're going to feel like every day you have no idea what you're doing. And one day you'll just wake up and realize that you actually understand. But in terms of training, one of the things that we try and do is, you know, the first thing is we actually there's an actually, you know, we partnered with AICPA and they have a blockchain course. So like every person goes through that, that's going to cover the basics and specifically for accounting. And then the key is the team, because every person in the team, even if they started not in the space, starts leaning one way or the other about like a particular area of crypto, and they almost become like a de facto expert and they really like that area. And, and thus having that team like that community and the conversations really helps with learning. So we do a lot of meetings where we're just chatting about like changes and cool things and you know, like I love Nfts with like real world utility stuff. Yeah, that's my area.

Speaker4: [00:31:57] Yeah.

Emily Cheshire: [00:31:58] So one of my team loves defi, so, you know, like everyone's got their area.

Patrick White: [00:32:02] Emily give us the, give us the sneak peek. What's your, what's your favorite NFT with kind of real world utility right now. What's your what's your what's your, what's your shill Come on.

Emily Cheshire: [00:32:10] Yeah so I was hearing there's a few companies at the moment that are doing nfts to produce, you know, like a high end goods. So you've got an NFT for like authentic authentication. So you could be buying like super expensive, like whiskey or like, handbags. Yeah. And that's I think that's genius because not only do you can you prove that your the authenticity of it, but you've accidentally created this community like whether or not you like it and that's the community is like the key. So from like a like business development point of view, I just think it's just it's, there's so many benefits to it. And I just thought it was really cool 100%.

Patrick White: [00:32:49] So I'm going to brag a little bit. I got to do a consulting kind of session planning session with some of the Michelin folks. And one of the things that we recommended was was this this idea of like bringing the Michelin stars online as nfts and then building this community where you're both collecting, like as you go to these restaurants, you're collecting the nfts of the of the restaurant itself. You then have this notion of like you as a entity with the stars, that you've gone to, the stars, you've eaten all that kind of stuff, and they just announced that same thing. It's a great it is a great use case for Nfts like in a in a very, very deep way. And for Michelin it's even better because it, you know, it's one of those things like I always like to look for use cases for, for blockchain tech. And this is actually it's actually a really, really good one because if you think about the various different types of POS systems that all of the different Michelin restaurants you have, you know, there's a thousand Michelin restaurants in the world. They're using Stripe or Clover or their homegrown POS or something, some weird, you know, ten year old thing. The ability to bring all that together and make it kind of generally usable and then be able to publish stuff on the blockchain, all that. It's it's a great use case for blockchain as an abstraction layer from any one of these guys having to build the tech themselves entirely. So I love the Michelin, the Michelin use case and I love the Garyvee use case, which is another one that sort of sneaks towards what you're talking about, which is the, you know, the restaurant he opened in New York, there was kind of a country club, uh, country club for, for crypto people.

Emily Cheshire: [00:34:17] Yeah, Yeah. He, he's doing some super cool stuff in the space. Like he's conference NFT tickets and he was one of the first I think to like pioneer that stuff. So yeah, yeah. I was gonna say conference tickets.

Patrick White: [00:34:29] Conference tickets. Yeah, yeah. Conference tickets. Concert tickets. You know we still haven't seen we haven't seen that fully come out yet. I don't think like we've seen people playing around the edges with it, but I don't think we've yet fully, fully seen it happen here.

Emily Cheshire: [00:34:45] See, it's the nice to have that supplemented on the side. It's not the primary area.

Speaker4: [00:34:50] So I love this idea.

Emily Cheshire: [00:34:52] Anyone that's in that space.

Patrick White: [00:34:54] Yeah, yeah, us too. Like absolutely. But I love this idea of of as you're building up a practice area, basically brown bags or whatever you want to call it, like little. Formal learning sessions for to get together and talk about the stuff you're seeing. Because again, this industry moves so incredibly fast that it is, gosh, we should even start doing something like we should have bitwage just start doing something like this where we just get all of our partners together to talk about the crazy things that we're all seeing and chit chat. The brown brown bag like that. Super interesting. So let's in the in the last like 5 or 10 minutes here, let's let's sort of step even one step deeper. So we've been, you know, we've been super high level around CFO, CFO role for a crypto company and talked about the A aspects, all that kind of stuff. Let's talk a little bit about the comptroller role. So, you know, you as a comptroller at a company which I think is sort of part of the outsource role, how do you what do you think about your your function there? What do you think about your roles and responsibilities as comptroller? Yeah.

Emily Cheshire: [00:35:48] You know, so I mean, you've got the standard practices. We kind of just say that, you know, you've got all the fiat stuff, you've still got all the standard stuff that you need to make sure, right? You need to make sure your payables are getting paid or the employees are getting right. You've got to make sure that's all right. You've got to make sure it's in the records. When it comes to digital assets, you've got the added level of complexity there. So there is there is a huge amount of, you know, the accounting for it, we all know is really, really complex. And using a tool makes it a thousand times easier, but it is still difficult. There is still a huge manual component of it. So really the controller's job is really to, you know, know those figures inside and out and know the business process inside and out to identify those, you know, that impact and and that impact, especially on the digital asset side, is far like the magnitude and the effects of it is much higher than a standard company because every transaction can have a capital gains impact.

Speaker4: [00:36:51] Right. Right.

Emily Cheshire: [00:36:52] And you code one thing wrong and we pick this up immediately, but you just code one thing wrong and it created a $3 million gain. Yep, yep. You imagine if you don't miss pick that up.

Speaker4: [00:37:03] Right? Like that's a.

Emily Cheshire: [00:37:04] Terrifying tax bill. So, you know, like just knowing the impact and knowing the treatment and more importantly being able to spot it is key. And a lot of it's around kind of like processes. So yeah, we have a lot of controls where we'll start, you know, reviewing, do the figures, do the quantities tied to like what's on chain, you know, So we don't want to just get reliance on, on the report. And so we just go and check on chain. And it's very similar to like, you know, Fiat. Does the bank.

Speaker4: [00:37:34] Match. Yeah, the bank statement.

Patrick White: [00:37:36] Yeah, exactly. Just just so much more complicated. Yeah. Just unnecessarily. Do you tend to give your clients advice on what exchanges to use or what exchanges maybe to avoid or how to think about exchanges in the abstract to make your life a little bit easier? Or do you not have a lot of luck asking clients to make your life easier?

Speaker4: [00:37:59] Yeah, I.

Emily Cheshire: [00:38:00] Typically go with the tactic of we're going to advise you on, you know, some exchanges are great, some have really good reporting. And it's the same with blockchains and same with like the scanning tools. Some are terrible. You can't even download anything. However, I always just say, you know, like just be aware of the impact and that, you know, if it, if it ultimately if it's more time consuming on our side that the costs are higher. But I you know it's the do what makes the most sense operationally for your company and we'll figure it out. But yeah making sure they're aware of all of the kind of facts before making that decision. I mean typically by the time they work with us, they're doing 50 million things in 50 different places. So yeah, we just have to figure it out. But you know, going forward, it's always about kind of recommending.

Speaker4: [00:38:47] You know, best practices.

Patrick White: [00:38:49] Any best practice that you tend to recommend for, you know, we call it wallet hygiene, this idea of either segregating your wallets, but then also from your perspective, it's making sure you're getting all the wallets. Do you do you have a meeting that you regularly do with the CTOs to to get new wallets? Like, do you have a best practice for how you do this or do you just every time you talk to them, ask them the question or remind them like, what's your what's your best practice around making sure you have all the wallets?

Emily Cheshire: [00:39:18] So a lot of it the key is just doing that onboarding period with the client. So we will do a really deep review of all their wallets and we'll ask for all their wallets. We'll check and sort of double check that they've got them all. They will say yes, most of the time they haven't got the worst. And during the catch up and during the day to day accounting, we see addresses that you don't know. You see transfers. Now, it's not typically that might pick up 80% of the unknown wallets, but not always. Right. And, you know, sometimes you you know, you'll figure it out because something's come out of the exchange and you have no idea where it went. Yeah, it's definitely an. Issue, and we always stress that. And it goes back to like the audit readiness. Like what is your controls over the wallets? How do you record them? Right?

Speaker4: [00:40:11] Who has or even.

Patrick White: [00:40:12] Who you're sending out, who you're sending money to? How do you get that into a vendor list somewhere? Things like that.

Speaker4: [00:40:17] Yeah.

Emily Cheshire: [00:40:18] So it kind of goes back to that. And you know, the volume, I mean, we're not always missing them, but it's pretty frequent. It kind of is an indication of kind of what's that process? And, and, you know, sometimes you're a startup and that's just the nature of startups, right? So it is what it is. But as they grow and mature, the conversation changes around to like, how can they prevent that?

Patrick White: [00:40:40] Do you? Last question I'll ask and then we can we can call it. Do you tend to do all of your clients follow kind of full US GAAP? Do you do you have like a GAAP light that maybe you don't do impairment or things like that? And then when do you make decisions to to roll someone from kind of GAAP light up to a full GAAP with impairment and principal market analysis and documenting everything, all that kind of stuff. How do you how do you guys make that decision?

Emily Cheshire: [00:41:07] Sure. Yeah. Yeah. So you say GAAP light, we say GAAP ish.

Speaker4: [00:41:10] Gap.

Patrick White: [00:41:10] Gap ish.

Speaker4: [00:41:11] Ish.

Emily Cheshire: [00:41:12] So I would say, you know, most clients from a cost benefit analysis point of view are going to be in the gap like GAAP ish. Really the trigger to move to full GAAP is either they've got investors and they're going to need it or they're going to want an audit for some form or another. So, you know, it's really a the further in advance we know that, the better it is because you've got the memos, there's a lot of review, there's a lot of because the regulations aren't set in stone, there's a lot of decisions that need to be kind of made properly, you know, So most companies don't really want to go there because they know it's going to cost a lot.

Patrick White: [00:41:58] Yeah, Yeah. So it's all a cost. It's a cost benefit analysis based on its benefits. Probably not the right word. It's a cost analysis versus a demand that someone's making and when you're ready for it. Well, Emily, as always, this is I just love talking to you. This is so much fun. This was a really interesting starting at the top and just working our way down to to GAAP ish here. Um, share, share with our listeners how people get a hold of you, how they get Ahold of Appirio, all that kind of stuff.

Speaker4: [00:42:27] Yeah.

Emily Cheshire: [00:42:28] So I'm on Telegram, LinkedIn, Twitter. So if you just type in Emily Cheshire, you'll find me. If you throw me into Google my name, into Google, you'll find me on the website and there's a direct link. So you can contact me there too. So always happy to reach out to companies or just builders in the space because as you can tell, I just love chatting to anyone in this space. So, um. Yeah, feel free to hit me up.

Patrick White: [00:42:53] Absolutely. And of course you can find bit wave at bit wave IO. We are going to be in Miami. So, Emily, are you going to be down in Miami?

Emily Cheshire: [00:43:02] I'm not. I've attended quite a few conferences.

Speaker4: [00:43:05] But.

Emily Cheshire: [00:43:06] I'm going.

Speaker4: [00:43:07] To be there.

Patrick White: [00:43:07] Yeah, already this year, I swear. I've been on the road for I've been in hotel rooms already a month this year, and I hate staying hotel rooms.

Emily Cheshire: [00:43:17] No, my kids are going to start forgetting who my name is. So.

Speaker4: [00:43:19] Yeah.

Emily Cheshire: [00:43:21] No, Aprio is going. There's a few of my colleagues that are going, so if anyone's coming, we'll definitely be happy to kind of have a chat and say hi.

Patrick White: [00:43:28] Yeah, same with us. So feel free to reach out info at bitwage IO or visit us at Bitwave IO. Emily, thank you so much. Absolutely a pleasure.

Speaker4: [00:43:38] Thank you so much. Brilliant as always.

Emily Cheshire: [00:43:39] Every time. It's always good.

Rafael Casas: [00:43:42] All right, everyone, thank you so much for tuning in.