Fractional CFOS

If your startup is growing fast and you need someone to manage your finances, but you’re not ready to hire a full-time employee, you may need a fractional CFO. A fractional CFO is an experienced Chief Financial Officer who provides services for startups on a part-time, retainer, or contracting basis. The main responsibilities of a fractional CFO are to:

• Manage the startup’s financial reporting.
• Build and maintain the startup’s projections and budget.
• Execute capital raises i.e., venture capital rounds and handle legal and negotiations for the CEO, such as leases, insurance, etc.
• Manage and support the company’s financial infrastructure.

Fractional CFOs most commonly partner with companies to help overcome financial challenges, achieve growth, optimize strategy, implement systems, raise capital, or navigate an audit and/or transaction. The CFO should be helping translate your company’s metrics into insight that the rest of the management team can use to make strategic, important decisions such as when to make additional hires, when to ramp up sales or marketing spend, or how potential contracts will impact unit economics.

Unlike a full-time CFO who oversees and maintains all general financial strategy or an interim CFO who performs CFO duties before or between CFO hires, a consulting CFO’s duties are usually on a project basis and are specifically tuned to your company’s particular needs, challenges, or goals. This allows your company to benefit from the experience and expertise of a premium CFO without the operating costs of a full-time CFO ie. salary, benefits, and bonuses.

• Do they know your stage? A company gearing up to get ready for a $100 million venture raise is very different from a company with more modest capital needs. You need someone who understands your stage and can propel you towards future goals.
• Are they a specialist? If your startup operates in a specialty industry, you may need a specialist. Some industries, such as biotechnology or technology hardware manufacturing, have unique capital and cash flow needs. Finding an outsourced expert can help you craft a financial strategy unique to your business.
• Are they paying attention? You need someone who can provide the right amount of attention to your company for the foreseeable future. Fractional CFOs are in high demand and finding someone who has enough time to dedicate to your business can be a challenge. Working with someone who doesn’t have the bandwidth to give you the attention you need could later become a massive mistake.
• Are they compatible with your style? It is imperative you choose a partner who will compliment your leadership and management style. If you’re not a detail-oriented CEO, you’ll want to find a finance leader who is comfortable diving into the details. Remember, always look for someone who brings a perspective that compliments your style and grows the company.

You’ve found the right fit. What next?