When should a new tech startup (preparing to ask for seed funds) hire a CFO hourly consultant?
Here’s the recommended timeline for CFO Services for Startups:
Seed Stage: you don’t need a full time or even part time CFO at this point, but you absolutely need a rock solid financial model when you go to pitch your Series A. The financial model is your strongest argument in securing more funds and shows investors that you are professional and driven to complete the mission. You have a plan, you’ve thought things through. Check out Kruze startup financial modeling options here, built by former VCs (!!)
Series A: if you’ve raised up to $15M in your Series A, you should be consulting with a part time CFO at least once per month to benchmark your financial model to your actual monthly performance. These reports are known as Budget to Actuals, BVAs, B2As, etc. If you’ve raised more than $15M in your Series A, you should strongly consider having a part time CFO on site at least once a week. They’re not just there to wrangle accounting, they’re a member of your executive team: setting the culture, assisting with strategy, advising the executive team. We’ve vetted a number of fabulous part time CFOs as a part of the Kruze CFO Team, check them out here. Y’all welcome.
Series C: by the middle of your Series B, you should start looking for a full time CFO and or VP Finance. These ladies and gents are in hot demand and take months to find, so plan at least 6+ months ahead. This Wall Street Journal article on Startup CFOs is a must read. Pony up and use a recruiter, you will not be able to find the caliber of talent you need without one. Derek Shaw at CV Partners is fabulous, and we work with him extensively when our startups are ready to graduate from Kruze: Derek Shaw <firstname.lastname@example.org>.