How to Hire a CFO to Scale Your Startup

The average tenure for Chief Financial Officers (CFOs) in North America is getting shorter, with 59 percent of CFOs surveyed in a recent FTI Consulting spending fewer than five years at a single company as of 2022.

While this is a sharp change from just ten years ago, it makes sense given today’s economy and job market.

At nearly every level of the corporate world, roles and responsibilities are shifting. Companies are adapting not only to new ways of working—like remote and hybrid models—but also to opportunities to restructure and tap into the latest non-dilutive government funding for innovative startups.

As companies evolve, the CFO’s role has become more strategic—essentially acting as the company’s Number 2, or even the CEO’s right hand. This is especially true for fast-growing businesses, where the CFO must skillfully manage and balance finances to hit ambitious growth targets.

Of course, every company is different, and executives need to consider specific factors when choosing a financial leader. To dig into these nuances, Boast AI’s CEO Alok Tyagi recently sat down with Richard Cheung, CFO of Attabotics, who brings deep experience in the startup world to this #InnovatorsLive conversation.

In this article, we’ll highlight some of the key insights from their discussion—not just what makes a great CFO, but also what founders should show potential candidates in today’s competitive job market.

Who should be a startup’s first key financial hire?

First and foremost, founders need to realize that a CFO isn’t always the first financial hire they should make. Early-stage hires may eventually become CFOs, but the title depends on what the company can afford and what it needs from the role.

For example, a Series A startup often needs a financial controller (rather than a full CFO) to handle day-to-day financial operations. This can include managing accounts receivable, payroll, tax preparation, and compliance—just to name a few key tasks.

Once a company reaches Series B or later, the financial lead’s role expands and usually calls for a full CFO or at least a Director of Finance. This person needs to be more strategic—managing finances, taking on external responsibilities, building a top-tier in-house finance team to speed up fundraising, setting up a Financial Planning and Analysis (FP&A) structure, and even exploring mergers and acquisitions (M&A).

In short, as a company’s needs change, the CFO is often at the forefront of planning and rolling out key changes across the organization.

What should a CFO do to help a company scale?

As a company grows, a CFO’s responsibilities are split between Internal and External functions.

Internal functions involve building the systems and strategies that internal teams need to keep the business on a solid financial path. This includes choosing an Enterprise Resource Planning (ERP) system to streamline reporting and setting up the FP&A model mentioned earlier.

The CFO also manages capital allocation at a high level—deciding which areas of the business need investment (like funding innovative R&D projects to speed up the product roadmap) and which areas might need to be scaled back (such as cutting expensive vendor relationships that aren’t delivering results).

For External CFO functions, the main responsibilities fall into three categories:

1. Fundraising: For tech and SaaS companies especially, most will need to keep raising capital to build out their platform for the long term.
2. Liquidity events: CFOs need to keep all reporting up to date to ensure a smooth transition if the company goes public or is acquired.
3. Scoping M&A opportunities: The CFO often leads the due diligence process when evaluating mergers and acquisitions.

What should founders look for when hiring their first CFO?

Founders need to have clear goals for what they want their CFO to achieve. This means understanding not just where their startup stands financially (Series A versus a more mature company), but also the 3-, 6-, and 12-month milestones they want to hit.

As Richard told Alok, there are also less tangible factors to consider during interviews, such as:

1. Fit: Is there good chemistry between the CFO candidate and the founder, board, and management team? Does the candidate have experience in this specific sector or industry?
2. Strength: Does the candidate have the right experience for what you want to accomplish? For example, have they shown they can raise funds if you’re an early-stage startup?
3. Motivation: Do the candidate’s future goals align with the company’s? In startups, the CFO role is often a “lifestyle” position that touches every part of the business. Is the candidate truly passionate, and does that passion match their experience?

To dig even deeper, CEOs can ask questions like: What would your last couple of bosses say about you? What did you accomplish compared to what you were hired to do? Or, even more directly, Why did you leave your last few positions?

And while these questions are important, founders should also be ready to answer plenty of questions from candidates. CFO titles are in high demand, and with more CFOs willing to leave organizations after a short tenure, Executives would be wise to make a case for long-term commitment if they find an ideal candidate.

Questions CEOs should be ready to answer

With that in mind, CEOs should have these three key aspects of their business clearly defined before starting interviews.

1. What is the company’s Business Outlook?: What’s your vision? What’s the total addressable market? What’s your product’s competitive edge? What’s your financial position—do you need more funding? Where do you want to be in five years—stay private through M&A? Go public? Sell the company, and if so, who are the likely buyers?
2. What will be the CFO’s top priorities?: What needs to be accomplished in the next 6-12 months? Will the CFO have the freedom to make key changes? What are the current financial priorities?
3. What does the team look like?: Which teams will report to this role? IT? HR? Corporate development? Legal? Are there any gaps in the management team? What’s the company culture like?

Nailing down these points isn’t just about convincing a CFO to join your startup. It’s essential due diligence for any fast-growing, innovative business—and it will pay off once your CFO starts building capital strategies to extend your company’s runway.

To learn more about how founders can leverage non-dilutive funding options to fuel growth, check out our recent blog: Funding your startup with government grants.