Bursts of Color - Of Plumbers and CFOs
Finance is to a company what plumbing is to a house: invisible when it works well, but disastrous when it doesn't. In both cases, it's well worth hiring the right person for the job: the plumber you call for a leaky kitchen faucet is not the one you hire to design and oversee the pipes in a skyscraper. With this in mind, here's a rough guide to different kinds of finance leaders, and which kind you may need as your company grows.
The smallest companies usually outsource their accounting and don't need a dedicated finance leader. At this stage, an Office Manager or other "Jack of all trades" can help ensure that bills get paid in a timely manner. While relevant experience is nice to have, this role can be done by anyone who's detail-oriented, trustworthy and good with numbers.
Head of Finance
By the time a company has 25 people, it usually needs a finance point person to ensure that dollars are flowing accurately and on-budget. This role can be called Manager, Director or Head (in increasing order of seniority) depending on the person's resume. The qualified candidate here probably has 4+ years of finance experience with at least 2 of those years spent in a start-up environment like yours. Management experience is helpful, but not required, since it tends to start as an individual contributor.
At this next stage of complexity, the company needs someone to grow and manage a finance team that includes accounting, FP&A (financial planning & analysis), taxes and payroll. It may also include related administrative functions like facilities, board communications and fundraising. The right candidate here has successfully built and led a comparable finance team before -- preferably a minimum of 5+ people for 4+ years.
With a potential IPO on the horizon, the finance team grows to dozens of people as it takes on audits, treasury, investor relations and compliance. The right candidate here is a CFO who has "been there, done that" and can help lead you through the next big milestones. While a public-company CFO is the ideal hire, an experienced private-company CFO or public-company lieutenant can also be great choices. In any case, your candidate likely has experience with all major finance functions and has been managing people for at least a decade. This is usually a good time to use a retained executive search firm.
A Few Other Suggestions For Finance Hiring
Given the importance of ethics/trust in finance, be thorough with references and background checks.
If this is your first time hiring for a certain role, get input on the job spec from friends or investors who have done it (e.g., we're happy to take a look).
For more on this topic, check out Hiring Your First CFO from Corley Hughes and Rob Krolik or Good CFO / Bad CFO.