Financing Startups He is burning. But sometimes to get this funding, especially after the initial round, startups need to organize their financial house.
In the early stages, leaders usually focus on three main areas: developing their product or service, getting sales and generating cash flow. They cannot afford to invest in the wrong areas, including the wrong people and situations. Most of them do not see hiring a CFO as an urgent need yet, as an experienced CFO can command a great salary.
Partial CFOs are the answer to a growing number of small businesses. By hiring a part-time CFO, a startup can gain the benefits of having a seasoned CFO that it cannot afford or even attract at such an early stage.
The company usually brings in a part-time CFO for a limited period of time, often to help it mature its financial operations and secure its next round of financing. After this point, the company may hire an internal CFO and accounting team.
Partial CFOs are a short-term bridge, and they are generally not looking for a full-time job.
Now that many companies have adapted to remote work, some are holding partial CFOs for longer. For example, one of our clients, Konsi, provides external financial managers, accounting departments, and complete human resource management for start-ups and growing companies in the technology and life sciences industries. Its business is booming now.
Whether a part-time CFO is hired for a short-term or a long-term, companies see that bringing this expertise early on can truly change their trajectory.
Working with companies in a variety of industries, I see those that bring partial benefit to the CFO in three main ways:
1. Experience and Communication
It often makes sense for ambitious companies to seek outside expertise to put their finances in order while they focus on building products and increasing sales. Most part-time CFOs have served as the company’s CFO in the past, and many have a background in private equity or venture capital and have led startups to successful exits.