When to Bring A Startup CFO On Board

When to Bring A Startup CFO On Board

Early stage and small companies need CFOs with a different mindset and skills than their peers’ in large organizations. Of course, early stage CFOs can and do manage P&L and handle investor relations, but they also do a lot more. How do you know when it’s time to bring one on? And more importantly, what exactly does a startup CFO do?

Startup CFOs help to hone a startup’s business model and drive growth. They must simultaneously have a handle on the company’s cash position: answering questions like “are we spending in the right place?” and “how much cash/runway does the business have?”

In addition to:

At the same time that startup CFOs are focused on cash, they need to be strategic business partners: using sound financial metrics and guidelines as tools to provide counsel and guidance that enables CEOs to make business planning decisions around, “what’s the right time to hire?” and “how should we go about acquiring customers?” This allows CEOs to keep their focus on product development and customer acquisitions. In short, startup CFOs wear multiple hats.

When you’re looking for a startup CFO, choose candidates with broad experience working with early stage companies, who can address those additional areas of focus.

When is it time to hire a startup CFO?

So now you know when you need one, how should you go about finding a CFO for your startup?

Think through which services you need: whether it be annual valuations (if you give employees stock options), day-to-day bookkeeping, month-to-month reporting, or regular tax preparation, and then consider your hiring options:

Even if you’re not ready (or can’t yet afford) to take any of the above steps, there are practical things you can do now to make the eventual transition to professional management easier.

Do you have questions? Let us know in the comments section below or contact Early Growth Financial Services for a free 30 minute financial consultation.

Sirk Roh is COO for Early Growth Financial Services. He’s an accomplished finance executive focused on leading early-stage companies through strategic financial decisions. Sirk’s areas of expertise include debt and equity financings, planning/budgeting, financial analysis, cash flow management, high growth management, and cost reductions/rightsizing. Connect with Sirk at contact@earlygrowthfinancialservices.com or link to the slide deck for “Is It Time to Hire a Startup CFO?”

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