Many founders and CEOs of startups don’t spend a lot of time thinking about CFOs. When it comes to finance for a startup, founders focus on more pressing needs: What’s my burn rate? How long is my runway? How much more money do we need?
Nowadays, businesses are looking for their finance departments to do more than track and report results, close the books every quarter, and establish guardrails for spending. Today’s finance executives are expected to recognise that planning involves data, decisions and people – not just spreadsheets and budget mandates. They’re now expected to work across the organisation to model the business for growth, develop potential responses to likely scenarios (good and bad), align new initiatives with monetisation, and deploy resources and investments where they’d drive
These shifts suggest a change in hiring strategies for companies looking to bring on a finance guru. Here are a few attributes to look for while hiring CFO for your small business:-
Your potential candidate should not only be capable of running the deal for fundraising but also bring deal flow into the company. They should have a track record of originating and closing equity deals, and should have a long list of potential financing sources that are willing to take their call.
Your CFO should take a leading role in bringing operational excellence into your company. It means installing just the right amount of process, reporting and structure. Not so much that it slows you down, but enough so that you smoothly run and grow your business.
Today, one requires the employees to be Jack of all Trades! He should be able to perform other duties (e.g., human resources, technology, legal, and information technology) as needed. It will be a long time before you have in-house counsel, and you can’t afford an outside law firm for every NDA to sign. So, choose a CFO who is very comfortable with legal documents, as well as finance.
The business road is guaranteed to be long and hard. Investors look for someone who loves the challenge, looks and sounds like he can weather the storm, will always see the bright side despite adversity, and never gives up.
Your CFO should be a trusted advisor to the CEO and other executives. Your CFO can be an objective source of advice and counsel as you make the big and the small decisions.
Maureen O’Connell of Scholastic in her podcast, mentions that the job of a startup CFO is very different from one at a “big” company. The latter is much more of a hands-off role focused on investor relations, deal-making (financing, M & A), governance, reporting and other back office matters. In stark contrast, the startup CFO is much more hands-on and integrated into the day-to-day of the business.