A Founder’s Guide to Selecting a CFO

Selecting a CFO is a challenge every founder will face as their company begins to grow. The role of CFO has evolved beyond number-crunching and spreadsheets to take on greater strategic and operational importance. Today’s CFOs are being referred to as ‘Chief Future Officers’, enabling companies to unleash their potential and develop a forward-thinking strategy.

Founders and CEOs are at the forefront of the CFO recruitment process. The CEO-CFO relationship is crucial to the success of the position. A CFO should complement the skills of the CEO and work collaboratively with them across nearly every facet of the business, ensuring strategic alignment and effective decision-making.

The insight and forecasting provided by a CFO are vital to grounding the CEO’s decision-making process. Every founder needs to decide when the best time is to recruit a CFO, on what type of contract, and to define the role of CFO for their company.

We’re sharing the founder’s guide to selecting a CFO, breaking down the process to help you get the best result. Every founder wants a CFO with multidisciplinary experience that can boost the value of their start-up or company.

Deciding When to Recruit a CFO

The first decision a founder needs to make is to decide when to recruit a CFO. Most companies will not hire a CFO as their first financial appointment. Employees hired early into the company’s lifespan may eventually evolve in their role to become CFO, but most founders will choose to build a small finance team before recruiting a CFO.

Deciding when to recruit a CFO will depend on the needs and operations of your business. The founder of a Series A start-up may decide that a financial controller is better suited to managing the day-to-day operations of their company, rather than a CFO at that stage.

A founder of a Series B company will instead want to recruit a CFO. They’ll need a financial leader who not only manages the company’s finances but also has the expertise and experience to take on more strategic responsibilities, supporting broader business objectives.. Recruiting a CFO will provide the company with the foundations to develop a well-rounded finance team and put financial planning and analysis (FP&A) structures in place.

The need for a CFO will continue to grow as the company evolves. There is no definitive answer as to when a founder should recruit a CFO. Most founders will be encouraged to select a CFO before the company starts working on fundraising, either at Series A or B. Investors and financial institutions are more likely to support companies that have a CFO on board.

Recruiting a CFO before seeking investment provides the company with time to prepare its accounts and develop financial resilience with a strategy for scaling.

Founders who are not seeking venture capital for their start-up may instead choose to recruit a CFO when the workload arises, particularly regarding financial and legal work.

Answer These Questions Before Starting CFO Recruitment

Every founder must consider the needs of their company before starting the recruitment process to find a CFO.

There are a few questions every founder should consider when they’re deciding how and when to recruit a CFO:

• Is the company undergoing a period of rapid growth? CFOs with a multidisciplinary background will be most suited for companies that fall into this category, while transactional mindsets suit more stable company growth.
• Is your company seeking external fundraising? You’ll need to recruit a CFO ahead of time to put the correct accounting processes and systems in place to attract private investors and build credibility with financial institutions.
• Do you or your company have a skills gap within the field of financial management? Offloading these responsibilities to a skilled CFO will make you more productive and efficient in your role as CEO.
• How complicated are your company’s operations? Founders of more complex start-ups will want to recruit a CFO with industry experience to ensure they can adequately plan, report, and record your finances and operations.
• What is your start-up’s business outlook? A founder will want to consider their company’s current market position and long-term goals to select a CFO with the skills set to manage a potential M&A or prepare the company for IPO.
• What does your existing team look like? Consider any skills gaps within your current leadership team to search for when recruiting a CFO.
• What will your CFOs priorities be? Determine the main role of your CFO beyond their everyday responsibilities and how this plays into your company’s growth plan. You want to select a CFO who can hit the ground running and achieve your company’s short and long-term goals.

Recruiting a CFO for a Start-up

Founders often find themselves weighing up the pros and cons of recruiting a CFO. The evolution of the role of CFO means that flexible working and part-time positions are making the experience and skills of a CFO more accessible to start-ups. A CFO will bring a fresh perspective to your start-up with an unbiased view of your finances and provide a deeper understanding for better strategic decisions.

Part-time CFOs are making it easier for founders to decide when to start recruiting. It means start-ups can take advantage of the benefits of hiring a CFO without the financial burden of a full-time position. A part-time CFO will meet your company’s current needs while opening the path to hiring a full-time CFO when the need arises.

Do You Need a Full-Time or Part-Time CFO?

An interim CFO can also be a cost-effective option for founders who are considering the benefits of hiring a CFO. The quick progress and growth of start-ups mean that an interim CFO may be the best option in the short term before recruiting for a full-time position. Founders can often take months to recruit the right candidate as a full-time CFO.

Recruiting a CFO, whether part-time or full-time, adds value to your company. Their knowledge, insight, and experience are vital in boosting your company’s chances of survival and improving its longevity by building financial resilience. Your CFO will also put systems and structures in place to make your company more efficient and identify areas of potential cost savings.

Desirable Qualities and Qualifications for a CFO

A founder should sit down and decide the qualities and qualifications they want from their CFO. No two companies have the same needs, and every CFO has a portfolio of skills and experience to bring to the company.

Some qualities that a founder will want to consider when selecting a CFO include:

• Strategic vision and judgment

You want a forward-thinking CFO who can drive strategic thinking and growth throughout your organisation. CFOs interact with stakeholders throughout your business, becoming involved with everything from supply chains to investor relations.

Select a CFO who has a proven track record of delivering on initiatives, such as restructuring projects. You want a candidate who will arrive at your company with a clear vision of where they can take your organisation and how their work can align with your long-term goals.

• Forecasting and analysis skills

Most CFOs will come from an accounting background and be certified. You want a CFO with strong forecasting, modelling, and analysis skills to build a skilled finance operation for your business. A CFO should have forecasting, budgeting, and financial modelling skills to provide real-time analysis.

• Risk management and mitigation

Risk management is crucial for start-ups. It’s one of the reasons why founders choose to appoint a CFO as one of their first leadership appointments. Part of a CFO’s daily responsibilities is to oversee risk management and implement mitigation steps to reduce identified risks.

• Develop financial systems and infrastructure

One of the main responsibilities of a new CFO is to build and manage an agile infrastructure that works in the fast-moving environment of a start-up. Developing these systems early in your start-up’s life will make things easier down the road.

• A jack-of-all-trades

A CFO is one of the C-suite executives who will find themselves working with virtually every department in the organisation. Founders want to find a CFO who can wear different hats, whether it’s advising the board, working on employee retention, or investing in technology.

Define the Role of CFO in Your Company

One of the biggest mistakes founders make when recruiting a CFO is not defining the role first. Determining the role and responsibilities of your CFO will allow you to figure out exactly what you need from a candidate and make it more likely for you to find the right candidate the first time around.

Some characteristics are almost universal across all CFO positions in every industry. Strategic thinking, communication, and accountancy are skills every senior financial professional will have.

Tech literacy, especially for those who aren’t digital natives, is one skill that founders may want to look out for. This skill is becoming increasingly crucial for CFOs as they take a central role in enabling companies to evolve and utilise AI and automation to become more cost and time effective.

Decide why you are choosing to hire a CFO and use it as a basis to decide what skills and experience your ideal candidate needs. A founder may be looking to recruit a CFO to lighten their own workload or to provide a high-level perspective on the company’s financial health. Most founders will search for a CFO who can supplement the skill set of existing employees and fill any skills gap.

Headhunting Services vs. Traditional CFO Recruitment

Once a founder has defined the role of CFO in their company, it’s time to decide on the recruitment method. CFO headhunting services are ideal for founders who want to keep the process confidential or who require a fast appointment.

At FD Capital, our CFO headhunting services utilise a proactive strategy. We seek out candidates within our network, including passive candidates who are not actively seeking new opportunities but may be an ideal match for your organisation.

Our CFO headhunting services provide founders with access to high-quality candidates and a guarantee of finding a candidate for the role. We work with founders to tailor the headhunting process to your management needs and any internal deadlines.

Utilising a CFO headhunter service provides exposure to high-quality candidates with a guarantee of filling your position. The headhunting process can be tailored to suit your company’s time frame and management needs.

Our traditional recruitment service takes a reactive strategy for recruiting CFOs. Your CFO position will be widely advertised across suitable platforms, primarily attracting active candidates. Our recruiters will also reach out to candidates within our network, but the recruitment process will be longer as each stage is handled separately.

Why you should select your CFO with a headhunting service

Founders are increasingly choosing our CFO headhunting services. They can lower recruitment costs and boost employee retention, making it ideal for start-ups and founders working on a tight schedule.

1. Lower risk

Not every CFO candidate will be the right fit. Working with a headhunting service minimises the risk of selecting the wrong candidate. We’ll help you find the candidate who will fit right into your company culture and who has the skills and experience to take your organisation to the next level.

2. Quicker recruitment times

Recruiting a CFO can take months. Not every founder has that time to spare. Headhunting uses a proactive strategy that produces quicker recruitment times with our team being able to draw up a list of candidates within a short time frame.

3. High-Quality candidates

The benefit of using headhunting services to select your CFO is that you’ll get access to both active and passive candidates, giving you exposure to high-quality candidates. Your recruiter will work with you to select a candidate with your desired skills, qualities, and experience.

Helping founders choose the right CFO

Every founder will have their own ideas about when and how to select a CFO. Today’s CFOs have evolved beyond simply working within the finance department. Start the process of selecting a CFO by defining the role within your organisation.

FD Capital connects founders with high-quality CFO candidates from all around the UK and internationally. Start the process of selecting a CFO by contacting our team at recruitment@fdcapital.co.uk or 020 3287 9501.

Adrian Lawrence

Adrian Lawrence FCA with over 25 years of experience as a finance leader and a Chartered Accountant,  BSc graduate from Queen Mary College, University of London.

I help my clients achieve their growth and success goals by delivering value and results in areas such as Financial Modelling, Finance Raising, M&A, Due Diligence, cash flow management, and reporting. I am passionate about supporting SMEs and entrepreneurs with reliable and professional Chief Financial Officer or Finance Director services.