But there is a big difference between a corporate CFO and a CFO that has the requisite skills to deliver the results you need. The same applies whether you’re considering outsourced CFO services or hiring someone to work internally in your business.
From our experience, we know that there are three skills or qualities in particular that are make or break for a startup CFO.
THEY KNOW HOW TO RAISE CAPITAL
The challenges for a CFO in an established business and in a growth business are different. At the end of the day, the CFO’s role is to provide solutions for those challenges. And in a startup, one of the most obvious challenges is raising capital.
Experience with raising capital is quite specialised and you’re not as likely to find it with a CFO who has worked predominantly in established corporates. A good growth startup CFO will know how to help run the raise process. That includes everything from managing a pitch deck to building a financial model and ensuring the economics of the business are attractive to investors.
In a startup or growth environment, you need a CFO who is nimble and can see the big picture. It’s not just about the financials of the business but using the financials to substantiate the story and vision of the business.
THEY’RE WILLING TO GET THEIR HANDS DIRTY
The nature of startups is that resources are lean. In an ideal world you would have a team to run the finance function. While you can lean on a team with outsourced CFO services, in an internal context this isn’t the case.
A startup CFO needs to roll their sleeves up and get their hands dirty. They likely have to do things that aren’t in their job description. You might have a CFO doing accounting, bookkeeping, reporting, financial modelling or bringing in a new system.
A corporate CFO would take more of a leadership role and delegate many of these tasks to their team. A startup CFO needs to be able to dig into the details and set up a good process to coach and mentor people from all different levels.
In many ways, it’s going back to basics. But for the right CFO, building something from scratch and guiding growth can also be very rewarding.
THEY CAN BUILD A SCALABLE AND SUSTAINABLE MODEL
The premise of every startup is that you’re providing a solution to a problem. You’ve identified a problem in the market and created a product or service to solve it. But a great opportunity doesn’t always lead to good economics and a business model that is scalable and sustainable.
A good startup CFO needs to constantly review the model and help the business evolve. In fact, a lot of the work of a startup CFO is helping to make sure that what you’re offering is resonating with customers and investors.
Scale up accounting isn’t just about running with a great idea. There’s a whole lot of business economics that a startup CFO needs to understand and drive in the business. Compare that to a corporate CFO working with a proven business model. In that context the CFO needs to turn the wheel and make tweaks along the way. In some cases, a startup CFO needs to turn the ship around and charge ahead in a completely new direction.
FIND WHAT YOU’RE LOOKING FOR WITH OUTSOURCED CFO SERVICES
At Vital Addition, we’re the strength in numbers you need to scale your startup for success. Our outsourced CFO services operate on a shared services model giving you access to a full finance team. From bookkeeping to management accounting, we can plug the gaps in your model to help you maintain momentum in your growth.
We’re experts in working with startups. We’ve got the talent you need and can scale our services as you grow. Contact us to discuss how our outsourced CFO services can work in your business.