Why your startup should hire an on-demand CFO

An on-demand CFO is essentially a flexible, part-time professional who can support both long-term strategy and short-term goals related to a company’s financial health. Startups, which often have a younger, less experienced workforce and make business decisions without the insights of a CFO, can suffer from costly mistakes or simply fail. Thus, hiring an on-demand CFO can help transform your business for the better and help you make the right decisions where they really matter.

So, what do startups need a CFO for? Some examples include support during adjustment periods like restructuring, mergers, or a fundraising round. During these dynamic situations, a startup might need an expert who helps them reach break-even, manage their cash-flow and liquidity, define and capture the right KPIs, or put together a compelling investor presentation.

But then, why not hire an accountant or bookkeeper instead? A part-time CFO can help the company’s leadership look beyond the numbers and make sure they are truly informed. Subsequently, they can make the best possible decisions across the business. In other words, day-to-day tasks may obscure your sight of the bigger picture, and incapacitate you from properly planning or executing for future growth. Hiring a CFO is like having someone by your side that can answer essential questions like: “How much cash is required until our next major milestone?” and “What resources can we afford, and where should we invest our available capital?”

For startups, it is all about building trust with investors. That is why we advise hiring an on-demand CFO at least three months before a new fundraising round. Do not tweak your numbers or show incorrect data to investors. It is a small world, and once the word is out that you played according to your own rules, you might never get a second chance. Thus, a on-demand CFO may temporarily play the bad cop, but you will surely thank them later.

There’s no need to apologise from your side! Founders are expected to to live in their own worlds, focused on their product or service. In contrast, our on-demand CFOs have a thorough understanding of the industry, especially the venture capital ecosystem. That is exactly where they complement the founders. Most likely, they have spent time at a several companies in similar situations to yours and they have collected plenty of benchmarks during their career. This makes it easier for them to find the best KPI.

Many startups rely on their CEOs to present financial data, but let’s be honest. Most CEOs do not have the time to deeply understand the details. So let your CEO focus on the bigger picture instead.

To sum it up: Flexible and cost-effective on-demand CFO services help startups and scaleups master complex financial processes, build trust with investors, and come to better decisions in general. 

If you want to learn more about us, or would like to discuss opportunities please get in touch.