What to Look For When Hiring a CFO for Your Startup

Founders, do you know what to look for when hiring a CFO for your startup?

They call themselves part-time CFOs, fractional CFOs, consulting CFOs, or on-demand CFOs - it doesn’t matter.  What matters is that they are the right CFO partner for your business.  

I polled a few of my CFO colleagues and we came up with 5 tips to help you hire the right CFO and how to treat the relationship to get the most out of it.  Read on:

1. Hire a CFO who is highly experienced with venture-backed startups.

  • There are many good CFOs out there, but not all of them are experienced with venture backed startups.

  • An experienced startup CFO will know the nuances of working with venture-backed startups, and will get you “investor ready” for fundraising.  

2. Don’t hire or believe a prospective CFO who tells you hiring them will guarantee investment in your startup.

  • The CFO’s job is managing the financial function for your startup.

  • If there is a potential match between your startup and an investor the CFO knows, the CFO will likely introduce you.

  • A CFO promising capital is a red flag

3. Identify and hire a CFO early in your startup’s life

  • With a fractional or on-demand CFO, you only pay for what you need. 

  • For startups, there are more things that will go wrong than right.

  • You will pay more for the CFO and accountants to clean up a financial mess, than to hire the right people in the first place.

  • Don’t wait until you are fundraising or are in due diligence - it takes time to become “investor ready.”

4. Check references and dig around for scuttlebutt on a prospective CFO 

  • Speak with several prospective CFOs before hiring.

  • Ask for references from past and current clients

  • Dig deeper for reputation and potential scuttlebutt - the startup community is small and tight knit.

5.  Treat your CFO like a trusted partner

  • After you have found and engaged the right CFO for your startup, treat them like a trusted partner—as opposed to a cost center to be minimized.  

  • Open and continuing conversation with your CFO is an investment for the long run.  

  • By being kept up to speed on the company’s initiatives, the CFO can identify and help you avoid costly or company-killing mistakes.  

  • Further, startup CFOs are highly connected.  They may have people in their networks who can help your company grow.

Lisa Sussman