Starting a business is great, right? You have a wonderful idea, an enthusiastic team, and a product or service that offers solutions to your target market.

But as your business grows (again a wonderful thing to happen), managing money becomes difficult. This is where you look around, wondering who will save the day for your rapidly growing startup.

Fortunately, a CFO for startups works in this situation!

But how do you find a CFO that works for your startup? Do you even need a full-time CFO? What about a fractional CFO? What’s that?

If you’re a startup owner with too many questions, then we are Monily with all the answers! So, read this blog below and we’ll walk you through everything you need to know about CFOs for startups.

Why Your Startup Needs a CFO?

Before we tell you how to choose a CFO for your startup, it’s only fair that we explain to you why you need one. After all, it’s not an easy decision or one that’s super cost-effective (unless we tell you about fractional CFOs).

As a startup founder, your plate is already too full. You’re handling product development, customer acquisition, recruitment, and even raising capitals. All of this can lead you somewhere, where financials take the backstage. And truth be told, without solid financial planning your startup is flying almost blind.

So, to make sure that you know whether you’re profiting or just burning cash, it’s important to have a CFO by your side.

A CFO brings financial clarity to startups that’s otherwise missing. They help you track numbers, plan budgets, manage investor relationships, and make smarter financial decisions. In short, CFOs make sure that your startup grows without running out of money.

So, what does a CFO do in a startup? A lot than crunching numbers! They manage everything from financial forecasting and reporting to fundraising and devising growth strategies. CFOs ensure that startups aren’t just operating but rather gearing towards success.

Here’s why having a CFO for startups is so important:

• Strategic Planning: A CFO doesn’t just look at what’s happening now, they look at the future. They help create financial roadmaps to guide your decisions for the next whole year or even the next five years.

• Investor Confidence: If you’re looking for capital, having a CFO can significantly increase your potential. Investors are always happy to invest in startups where they see an expert keeping an eye on the numbers.

• Cash Flow Management: 90% of startups fail and often because of running out of funds unexpectedly. A CFO helps make sure that your startup isn’t one of them by smartly managing your cash flow.

When Should a Startup Hire a CFO?

While the answer for this isn’t the same for every startup, here are some key signs that your startup may need a CFO now:

• You’re preparing for a funding round
• You’re earning steady revenue but clueless about scaling
• You need help to understand your burn rate and runway
• Your budget feels out of control
• Your finances are getting too complex to handle alone

How To Choose the Right CFO for Your Startup?

So, we have figured out why you need a CFO for startups. But how to find one that fits your needs? Here are some tips on choosing the right financial leader whether full-time or on a fractional basis:

1. Look for Startup Experience: Just like all startups aren’t the same, all CFOs aren’t created equal either. You want someone who understands the startup world and is ready to take on the challenge. From understanding burn rate to planning to funding rounds, you need a CFO to keep up with the fast-paced nature of startup businesses.
2. Check their Communication Skills: Your CFO will be working closely with you and your potential investors. You don’t want someone for whom you’ll need a dictionary to understand. Good CFOs with great communication skills can explain financials without jargons, and in plain language.
3. Assess Their Strategic Thinking: Did we say CFOs are crucial for financial strategies? So, you want someone to be your startup’s CFO who cannot just look at the spreadsheets but also use that data to come up with strategic financial decisions. Your CFO should be your financial advisor.
4. Make Sure They Fit Your Culture: Even a part-time CFO will become a key part of your team. So, choose someone whose values align with yours and who is excited about your startup’s mission as much as you’re!
5. Ask About Tools and Processes: Now, this may seem like overstretching. But it is essential in today’s competitive and fast-paced startup ecosystem. A good CFO will be keen to use financial software, dashboards, and reporting tools to efficiently manage your systems and finances.

Ready for the Next Big Thing?

As your startup grows, so does you need to have an expert financial advisor by your side. A CFO for startups can easily fit in the role and help your startup reach its goals while ensuring financial stability.

But, of course, not all startups can afford to hire a full-time CFO (especially those in the infancy stage). This is why we offer fractional CFO services at Monily. Our team of financial experts have industry knowledge of startups, great attention to detail, and a knack for helping their teams thrive.

So, if you’re a startup owner who knows that it’s time to hire a CFO, we suggest you check out our CFO services for startups. We are pros at helping startups like yours take control of their finances while working on strategies that fulfill long-term goals.

Book a consultation with us today and let us know how our fractional CFOs can help your startup succeed.

Wajiha Danish

Wajiha Danish is the Director at Monily, overseeing financial strategies and operations for small and medium businesses. She has over 18 years of experience, including her role as Controller at HOCHTIEF PPP Solutions North America. Wajiha's background includes significant roles at Pakistan Petroleum Limited and A.F. Ferguson & Co. (PwC Pakistan). She is a Chartered Certified Accountant (ACCA) and Certified General Accountant (CGA) with expertise in financial management and project finance.