When should you hire a CFO? | TechCrunch


Startup founders wear a lot of hats. They have to build, they have to hire, and they have to inspire. They have to test, confirm, and pivot.

And they have to manage their finances.

When it comes to startup finances, things can get hairy quickly. But when is the right time to hire a CFO, and is a full-time CFO even necessary in this age of C-level-as-a-service?

I’ve worked with founders and chief financial officers for my entire career. The skill sets needed for each job are completely different, but their complementary personas can be exactly what drives a company forward. I also asked a few experienced financial operators and CEOs for advice on this crucial question.

Why do you need a CFO?

CFOs are responsible for managing cash flow, overseeing financial planning, and managing regulatory compliance. This ensures that the business has enough liquidity to support its operations and growth. They also play a vital role in financial planning, guiding the company’s strategic financial decisions and guaranteeing compliance with relevant regulations.

It is common for founders to think narrowly about accounting when considering whether to hire a CFO.

It is common for founders to think narrowly about accounting when considering whether to hire a CFO. Instead, they should think about the finance function more broadly. Sure, clean books and financial controls matter, but a true financial executive brings a lot more than just good housekeeping on that front. An experienced CFO is going to look at the business from the perspective of allocating resources and optimizing capital.

For instance, a good CFO will be able to plan for and secure different types of capital (i.e., loans, leases, etc.) and align cost to return, keeping the company’s more dilutive and expensive venture capital free for product development, team building, and market expansion. This, in turn, will drive even more ROI (return on investment).

Startup coach and CFO Evgeny Popov said that hiring a CFO was a no-brainer, akin to finding a CTO for your tech company.

“CFO is a crucial role for every business no matter how large it is, especially in the case of a tech startup aiming to expand,” he said. “Unfortunately, hiring a CFO is not an obvious move for founders because most founders come from the product or tech worlds and don’t see the CFO as vital to growth.”




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