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Supercharging Dropbox’s Path to IPO: Former CFO Ajay Vashee on the Value of Strategic Finance

Joseph Garafalo
Posted on
February 24, 2021
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So much of a successful IPO depends on the decisions you make years before filing any paperwork. For Dropbox, that meant establishing a strategic finance function that set the company up for supercharged growth and an efficient 18-month sprint to IPO. Find out how former CFO Ajay Vashee made it all work during his 8 years with the company.

In his eight years as a finance leader at Dropbox, Ajay Vashee helped take the company from 100 employees to 2,800+, grow revenue from $45 million to nearly $2 billion, and guide the cloud storage giant through its 2018 IPO.

It’s the kind of growth story that finance leaders and CFOs dream about. But what’s the secret to that kind of success? For Vashee and Dropbox, it was an early focus on making strategic finance part of the company’s DNA.

We talked to Vashee to learn how Dropbox’s focus on strategic finance was both foundational for its growth and what eventually supercharged the path to IPO.

Baking Strategic Finance into Dropbox’s DNA

Vashee planted the seeds of strategic finance early at Dropbox by building a small team of high-impact generalists. His focus on the fluidity between finance and business functions helped him bake a strategic finance philosophy into the company’s fabric from the moment he joined.

Dropbox hired Vashee to make the finance organization a strategic, forward-looking powerhouse for the company on its path to IPO—one that didn’t fall into what he called the “trap of over-rotating on traditional, backward-looking responsibilities.” Vashee said:

First and foremost, strategic finance was a philosophy that we wanted to bring to the broader finance organization at Dropbox. Initially, it was the label we gave to a small team of high-horsepower, highly-analytical generalists that helped get that philosophy off the ground. From there, we scaled the rest of the organization through a strategic lens.


The early strategic finance team worked broadly across the business. It helped with projects like building the company plan before Dropbox had an FP&A team, modeling out the impact of new features with the product team, headcount planning with individual departments, and more.

More recently, Vashee said that a strategic finance mindset led to the launch of a wide-scale transformation team that “set and executed against a roadmap to save 20,000 working hours through cutting edge automation efforts.” But in the early days, the focus was on nailing more targeted projects that “helped us build some credibility for strategic finance pretty quickly,” enabling the team (and the broader philosophy) to expand.

Vashee noted that new strategic finance hires became “the kernels for every function under the broader finance organization.” They brought a strategic perspective to every corner of finance, making the entire function a more deeply interwoven and collaborative part of Dropbox at large.

Doubling Gross Margin to Build Momentum Toward IPO

A partnership between strategic finance and engineering led to a foundational moment in Dropbox’s run-up to IPO—an infrastructure migration that doubled gross margin and catapulted the company toward public status.

For most companies in Dropbox’s position, an infrastructure migration would likely mean moving to the public cloud to cut operational costs and scale backend capacity. But Dropbox went in the opposite direction.

Taking Dropbox off the public cloud to run entirely on private infrastructure probably seemed crazy from the outside looking in—maybe not from a technical perspective, but definitely from a strategic business standpoint.

Dropbox’s world-class engineers knew migrating to private infrastructure was the right technical decision. But the strategic finance function was able to forecast all the numbers and show the board and C-suite that the move would also drive Dropbox toward its IPO goal.

And the collaborative effort paid off in a massive way.

The migration enabled Dropbox to scale from a 40% gross margin business to a nearly 80% gross margin business today. Vashee said:

The infrastructure migration gave us a tremendous amount of momentum from a business model and storytelling perspective. Financial trajectory-wise, it was great to show a path to doubling margins because it made investors more curious about our business model and operations. But walking them through the story of how we developed the conviction to make a decision like that became an important way to build investor confidence as we prepared for IPO.


This kind of story shows why it’s so important to make strategic finance a focal point for your business as early as possible. And it’s what enabled Vashee to make Dropbox’s IPO the first order of business when he became CFO in 2016.

Executing an 18-Month Sprint to IPO

Dropbox’s strategic finance philosophy supported some of the most crucial elements of the company’s 18-month sprint to IPO between 2016 and 2018. It helped Vashee make a few key hiring decisions and streamline the transition to the operating cadence of a public company, ensuring Dropbox didn’t hit significant speed bumps on the path to IPO.

In many ways, Dropbox’s IPO prep process looked like any other company’s. Vashee and his 60-person finance team had to draft its S-1, prepare a roadshow presentation, pre-record a roadshow video, and prepare other required materials. And they also had to upgrade systems across the finance organization to ensure Dropbox could operate at a public company level. This included a complicated ERP migration alongside other IPO preparations.

What set Dropbox’s path to IPO apart from others was the efficiency of its 18-month sprint.

According to Vashee, “you can go faster, but that comes with some level of risk.” One material misstatement could erode investor confidence and make an IPO fall flat. Or, you might start missing quarterly forecasts if you don’t have the right people and operational processes in place.

Adding Three New Leadership Roles for IPO Prep

Dropbox’s strategic finance philosophy set a high bar for hiring across the finance organization, which ensured Vashee tapped the best talent possible to lead Dropbox’s IPO prep.

“The ultimate manifestation of how a strategic finance philosophy impacted our hiring decisions was the first three hires I made as CFO,” said Vashee. “We had such a high bar for hiring in the finance organization that I knew we were bringing in the best people in the world to help guide our IPO process.”

Vashee added three key financial leadership roles to supercharge IPO preparation:

  • Chief Accounting Officer: Vashee hired Tim Regan, who had been through multiple IPO processes in senior accounting roles. He helped fill knowledge gaps for Vashee, who doesn’t have a background in corporate accounting.
  • VP of FP&A: Vashee hired Eileen Tobias, who had extensive FP&A experience from the 12 years she spent leading that function for NetSuite. She brought a level of operational knowledge specific to business software companies that was crucial for Dropbox’s transition to a public company.
  • VP of Corporate Finance and Strategy: Vashee hired Lev Finkelstein, who brought 17+ years of experience working as an investment banker at Goldman Sachs. His perspective from the other side of the table enabled him to help Vashee, as he said, “quarterback the IPO process for Dropbox.”

Getting Dropbox into the Financial Rhythm of a Public Company

Strategic finance facilitates stronger partnerships within a company. Those partnerships made it easier for Vashee to move Dropbox from annual financial cycles to the quarterly beat-and-raise earnings cadence of a public company.

Vashee needed to make sure finance could seamlessly collaborate with other business departments to close the books quickly and forecast accurately on a quarterly basis. And while the strategic finance philosophy made collaboration a core competency for Dropbox, Vashee knew there would be an adjustment period as the company transitioned to a beat-and-raise cadence.

Leading up to IPO, Vashee started getting the finance org into a new rhythm of closing the books, doing a soft close monthly and a hard close quarterly to simulate public-company reps. This got the team used to generating insights from previous quarters as quickly as possible and turning that data into accurate forecasts for upcoming quarters just as quickly.

Getting into this financial rhythm and integrating his new leadership hires kept Dropbox from experiencing issues that could have otherwise derailed the IPO process. And because of all this prep work, Dropbox was able to beat and raise for each of the 10 quarters Vashee was CFO following the company’s IPO.

It’s Never Too Early to Prioritize Strategic Finance

Prioritizing strategic finance early on at your company sets the stage for a smoother, faster IPO process later. As Vashee says, it’s never too early “to make strategic finance a core part of your philosophy.”

That doesn’t necessarily mean building a strategic finance team the same way Vashee did at Dropbox. On a higher level, it means giving your entire finance organization the freedom to focus on strategic thinking.

What if your accounting function could provide deeper insights into the “why” of fluxes instead of just reporting on them? What if your FP&A team could focus more on granular insights when analyzing budgets vs. actuals instead of only providing a general overview?

Vashee noted that the “finance organization is in a unique position to have the highest fidelity understanding of a company’s current and future state.” You just need to give it the tools and resources to assume the role of strategic advisor to the business.

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