What does a startup CFO do?

The main responsibilities of a startup’s CFO are to: manage the startup’s financial reporting build and maintain the startup’s projections and budget execute capital raises, like venture capital rounds handle legal and negotiations for the CEO, such as leases, insurance, etcThe CFO should be helping translate the company’s metrics into insight that the rest of the management team can use to make strategic decisions - important decisions like when to make additional hires, when to ramp up sales or marketing spend, how potential contract will impact unit economics, etc.Learn more about what does a good startup cfo do

Should seed stage startups have a CFO?

Most seed stage startups do not need a full time CFO. While it’s tempting for a “business” founder to take a Chief Financial Officer title, this is probably not the most important role for most seed stage companies to have filled with a full time person (COO may be a better title for that business founder).A part-time CFO or experienced accounting CPA firm is a better fit for most seed (and most Series A startups) because they can be an experienced, frugal way to get the output that you’d expect from a CFO without the cost.

What to look for in an outsourced CFO?

Not every fast-growth company needs an outsourced CFO, but when it’s time, it’s time! Here are some of the key items to look for when hiring a senior finance professional on a contract basis: Look for someone who knows 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 If you operate in a speciality 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. Get someone who can provide the right amount of attention 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 probably need maybe a mistake. Choose a partner who will compliment your leadership and management style. For example, if you’re not a details-oriented CEO, finding a finance leader who is comfortable diving into the details may be best.

Expect your outsourced Chief Financial Officer to help with the following closing the monthly books and managing financial reporting manage the budgeting process and the financial projections, including keeping track of the company’s expected cash out date fund raising logistics, advice and coordination, including supplying investors with financial and other due diligence material contract negotiation for items like new leases, large vendor contracts, etc. manage the company’s cash and cashflow/burn, and make recommendations around hiring or changing the burn rate.Basically, a startup CFO’s services will include anything and everything the company needs to help translate the founders’ vision into realty from a financial lens.

Outsourced CFOs near me

A common question we get is “how to I find an outsourced CFO near me?” Kruze works with outsourced CFOs near most major tech centers in the United States, including San Francisco, Silicon Valley, Southern California, New York, Austin (Texas), Boston (Massachusetts) and more. If you are looking for an outsourced CFO near you, see if Kruze can help you!

A Strategic CFO Partnership

Based on your startup’s needs, Kruze Consulting can provide the services of an entire in-house financial team at a lower cost than staffing your own finance department. As a Finance as a Service (FaaS) provider, Kruze can provide you with CFO and executive-level services, giving your startup the crucial financial reporting and strategic advisory services you need. Our seasoned financial experts can support your startup throughout all stages of its growth, and we have the systems and infrastructure to quickly onboard your company and provide you accurate, reliable, and timely financial services.

Should Startups Hold Exit Interviews with Departing CFOs?

When a startup’s VP of Finance or CFO decides to move on, board members and investors should conduct an exit interview. Such interviews provide invaluable insights into the inner workings of the company, potential areas of concern, and possible operational improvements. It’s not just about identifying issues; it’s about understanding the myriad reasons behind a finance professional’s departure, whether due to internal disagreements, better opportunities, or something more dangerous. At the heart of the matter, VCs and board members bear fiduciary responsibilities. Their duty is to ensure the startup’s financial infrastructure remains intact and that operations are seamless. The departure of a financial figurehead, like a CFO, can be indicative of deeper operational issues or even potential fraud. Hence, holding exit interviews becomes crucial. While it may not be necessary for the entire board to be involved, at least one member should be. The insights gained from these interviews often transcend pure finance, shedding light on the broader operational aspects of the startup. Therefore, it’s imperative that exit interviews become a standard procedure, ensuring the well-being and transparency of the startup ecosystem. Whether it’s a full-time CFO or a fractional one, understanding the reasons behind their departure is paramount for the future success and stability of the business.

Who Is Responsible for Hiring the Startup CFO?

The final decision on who to hire as the Chief Financial Officer (CFO) is often made by the startup’s CEO. However, this choice is seldom made in isolation. Given the critical nature of the role, the board of directors usually plays an influential role in the selection process. This collaborative approach is crucial for several reasons: Board members will likely want a rapport with the CFO to gain unfiltered insights during challenging times. The board seeks to ensure transparency, verifying that issues are not being downplayed or concealed. Having another point of contact within the startup, besides the CEO, can serve as a useful channel for communication and de-stressing.Advice from other team members like the operations team and key personnel such as the Vice President of Finance, Controller, and Staff Accountants is often sought during the CFO hiring process. Since this hire touches so many parts of the team, it makes sense for key members to have a say in the hiring process.

Startup CFOs

Services: True Global Ventures, Bodega Partners, Rollbar, Xenio Systems, WaterSmart Software, San Jose State University, Sand Hill Angels, Cross Coin Ventures, Qvivr, Callisto Media, Menlo Incubator, AppBistro, Fliqz, Inc., TextDigger, Inc., iControl Networks, Pharmacy TV, Outlook Ventures, University of California, Berkeley, Stratex Networks, Arthur Andersen & Co., U.S. Department of the Treasury

Tools: Quickbooks Online, Netsuite, Bill.com, Expensify

Education: The University of California, Los Angeles, Lehigh University

Past Companies: True Global Ventures, Bodega Partners, Rollbar, Xenio Systems, WaterSmart Software

Summary

Steve Bennet is founder and managing director of Bodega Partners and is an active participant in the Silicon Valley entrepreneurial ecosystem as start-up CFO, Angel Investor, and Professor.Over the past 25 years, he has been CFO, investor, and/or board member of over 100 technology start-ups, primarily in the software, Internet, and mobile sectors. CFO roles include Xenio Systems, Qvivr, Callisto Media, Revel Systems, iControl Networks (acquired by Comcast), Appstores (acquired by InMobi), Greystripe (acquired by ValueClick), Fliqz (acquired by VBrick Systems), Valchemy (acquired by IBM), GolfWeb (acquired by CBS Sportsline), Orbital Data (acquired by Citrix), TextDigger (acquired by Federated Media), and Pharmacy TV Network (acquired by RMG Networks). Some of these resulted in excellent financial returns to founders and investors, while others did not.Steve has a passion for both entrepreneurship and education. He has taught entrepreneurial finance since 1995 and is currently adjunct faculty at San Jose State University. Previously, he was a lecturer at U.C. Berkeley. His focus is on experiential education and has developed new courses at SJSU, including the Entrepreneurship Lab (ELAB), Venture Lab (VLAB), Startup Founders and Funders, and the Silicon Valley Experience. He is also on the Steering Committee for the Silicon Valley Center for Entrepreneurship and UCLA Venture Capital Fund. Prior to and concurrent with Bodega, Steve was a Founding Partner at True Global Ventures, Partner at CrossCoin Ventures, Venture Partner at Outlook Ventures, Board Member of Sand Hill Angels, Partner at Menlo Incubator and held various financial and management positions at Bay Logics, Digital Microwave, and Arthur Andersen.Steve earned an undergraduate degree in economics from the Wharton School at the University of Pennsylvania and MBA from the Anderson School at UCLA. He blogs at www.professorvc.com and tweets @ProfessorVC.

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