Startup CXO

Chapter 23CEO‐to‐CEO Advice About the Finance Role

Matt Blumberg

What comes before a full‐fledged CFO? Lots of startups have nothing more than an outsourced bookkeeper or one junior staff accountant. Sometimes a founder or a founder's spouse even steps in on this front. As startups scale, they are likely to hire a more senior accountant, maybe an AR/AP/Collections staff member, or even a Controller or VP Finance.

Signs It's Time to Hire Your First CFO

You know it's time to hire a CFO when:

• You wake up in the middle of the night concerned about cash—not just that you're running out of it, but that you aren't clear on how much you have and how fast you're spending it.
• You are spending too much of your own time managing fundraising, debt, investors, and cap table questions, and issues.
• Your Board asks you about some small‐to‐mid‐level analysis or metric like CAC, customer profitability, margins, or ROI, and you don't have a great answer and aren't sure how to get one.

When a Fractional CFO Might Be Enough

A fractional CFO may be the way to go if your business model is simple … some combination of a limited number of complex accounting issues, a limited number of customers/invoices/transactions, and an insignificant difference between the income statement and the cash flow statement. If what you need is someone to oversee a gradually growing team, a slow‐paced implementation of higher‐order systems, basic financial analysis or modeling, or the occasional fundraising event, ...