Bursts of Color - Hiring a Finance Leader

Finance is to a company what plumbing is to a house: invisible when it works well, but disastrous when it doesn't.

Does My Startup Need a Finance Lead?

Probably yes. I find that most growing companies with over $2m revenue really benefit from someone carefully managing the "money in, money out," as it quickly gets more complicated than most founders expect.

In recent horror stories: two companies we work with hit the wall because they did not have qualified finance people watching the numbers... and thus ended up badly miscalculating their cash runways.

What Level of Seniority Do We Need?

As with the plumbing analogy, the right hire depends on your scale: the plumber you call for a leaky kitchen faucet is not the one you hire to design and oversee the pipes in a skyscraper. Here's a table and write-up that Rob helped me with a few years ago.

Strategic vs Operational Finance

Most finance professionals start their careers in either accounting or investment banking. While both groups are good at math, it's important to understand that these tend to be very different profiles.

Some founders gravitate towards the strategic finance profile for their first hire because they can relate to the analytic and deck-making strengths. But I lean towards operational finance profiles for most startups, as that's where the work is… and that is typically the missing skillset that best complements the founders.

Note that as a company scales, it will need excellent leadership in both operational and strategic finance. It’s just a question of which comes first.

What About Smaller Companies?

For those companies still too small/early to hire a full-time finance lead, it's usually still a good idea to hire an outside firm to at least help with basic accounting and budgeting. We’ve worked with a number of firms including Kranz Consulting, Burkland Associates and others, so we are happy to provide introductions as needed.