My CEO hiring thread was well received, so here are four rules for hiring a CFO who doesn’t suck:
(there are two completely different types of CFO and many entrepreneurs hire the wrong one)
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(there are two completely different types of CFO and many entrepreneurs hire the wrong one)
🧵
Two kinds of CFO:
Bankers - Love raising money. Great financial storytellers. Used to work at Goldman Sachs.
Auditors - Love making budgets and getting audits done successfully. Used to work at KPMG.
Bankers - Love raising money. Great financial storytellers. Used to work at Goldman Sachs.
Auditors - Love making budgets and getting audits done successfully. Used to work at KPMG.
Hire a Banker if:
1. You don’t like raising money or aren’t good at it.
2. You don’t understand capital markets and don’t care to learn.
3. You are going BIG (more than $30 million raised).
They get bored with accounting and they will need to hire that under them.
1. You don’t like raising money or aren’t good at it.
2. You don’t understand capital markets and don’t care to learn.
3. You are going BIG (more than $30 million raised).
They get bored with accounting and they will need to hire that under them.
Hire an Auditor if:
1. You hate managing details (insurance, etc).
2. You are comfortable fundraising and telling the story.
3. You need timely financial reporting and analysis.
Auditors will need a CEO who can tell them what financial story needs to be told.
1. You hate managing details (insurance, etc).
2. You are comfortable fundraising and telling the story.
3. You need timely financial reporting and analysis.
Auditors will need a CEO who can tell them what financial story needs to be told.
Once you have picked, now to four rules. Hire a CFO who is:
1. Proven. They can’t learn this job by doing it.
2. Responsible. They truly free you up.
3. Strategic. They see the bigger picture.
4. Technical. They like data.
1. Proven. They can’t learn this job by doing it.
2. Responsible. They truly free you up.
3. Strategic. They see the bigger picture.
4. Technical. They like data.
Proven means that they have raised money for a business if a Banker or been the managing finance director or auditor if an Auditor.
This can be their first role in a business (outside of a firm), but ideally they have proven experience in your industry and in growth companies.
This can be their first role in a business (outside of a firm), but ideally they have proven experience in your industry and in growth companies.
Responsible means that they are not above all the annoying details of business administration. (or can hire to solve them)
They will haggle with your insurance broker and make sure that you stock certificates get issued.
They will haggle with your insurance broker and make sure that you stock certificates get issued.
Strategic means that they ask very smart questions about the business quickly.
They see the bigger picture and have ideas how to improve it.
They leverage their previous experience.
They see the bigger picture and have ideas how to improve it.
They leverage their previous experience.
Technical means that they can do work themselves.
Many Bankers have had analysts for so long that they can barely use a spreadsheet.
Many tech companies also have data streams that need to be financially analyzed. Experience with SQL, Pivottables, etc is really valuable.
Many Bankers have had analysts for so long that they can barely use a spreadsheet.
Many tech companies also have data streams that need to be financially analyzed. Experience with SQL, Pivottables, etc is really valuable.
Finally: Wen CFO? Sooner than you think.
If you are spending/raising more than $2 million yearly, you should have a great CFO.
Symptoms: You are doing admin instead of building product. You don’t have a good budget. You don’t know your unit economics.
If you are spending/raising more than $2 million yearly, you should have a great CFO.
Symptoms: You are doing admin instead of building product. You don’t have a good budget. You don’t know your unit economics.
Hope this is helpful! Here is my tweet on CEO hiring if you missed it first time:
https://twitter.com/xavierhelgesen/status/1456396984173035523
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