We have provided part-time CFOs to start-up companies for over 15 years. Time and time again, a senior CFO has improved these companies’ fundability, operating health, and exit value. Here’s why every start-up company needs a part-time CFO:
A senior CFO is a key member of a strong management team, even on a part-time basis. He or she adds credibility and quality to the company’s financial model and projections; helps the CEO articulate the company’s financial vision; and efficiently negotiates and closes funding rounds.
Every company experiences a missed forecast, unexpected cost overruns, unbudgeted expenses, and other surprises. Senior CFOs are experts at anticipating the unforeseen, preparing for adversity, and minimizing the effects on the organization and its cash.
A part-time CFO provides solid forecasting and expense management to extend your company’s runway and buy time to create more value.
Experienced CFOs know how to manage financial and administrative tasks of all types. They know what things should cost, and can quickly and favorably negotiate benefits, insurance, leases, bank lines, legal fees, outside service providers, and more. They make sure that accounting numbers are accurate and on time. They can fluently manage ancillary operations and departments, so that your knowledge team doesn’t have to spend time on the back office.
A good CFO knows how to constructively challenge a plan, proposal, number, or claim. It is their fiduciary responsibility and unique skill to bypass conventional thinking and force 360º problem solving to increase the chance of success.
Investors appreciate and value a senior CFO’s contribution. They know that a good CFO can be a trusted advisor and will improve the company’s, and the CEO’s, performance.
Companies that meet or exceed plan, manage cash and headcount well, have a history of delivering accurate, on-time financials, and report few negative “surprises” typically get high marks from existing investors. And happy existing investors attract new investors.
Having a senior CFO reassures employees, creditors, suppliers, banks, service providers, and investors. You will attract better people, get better terms, and operate better.
More than 90% of exits are achieved through a company or asset sale—often early in a company’s evolution. M&A buyers, often public companies, will either drastically discount or totally avoid a young company with weak financial, administrative, and operational management because the integration pain and clean-up cost is too high. A part-time senior CFO can minimize the discount, friction, and transaction pain, thereby yielding a higher return for all.
A part time CFO more than pays for their service, providing senior CFO expertise without full-time employee headcount. Many startups use a part-time CFO for as little as five hours per month and can scale his or her involvement as the startup grows. As affordable as a part-time CFO is, how can you afford not to have one?