November 2, 2020

Startup CFOs vs Traditional CFOs


CFOs in startups and corporations share the same job title. But how similar are their roles and capabilities?

Richard Gargan

CFOs in startups and corporations share the same job title. But how similar are their roles and capabilities?

Let’s dive in both profiles to see if we can spot the differences.

The number-cruncher CFO**

Let’s start with traditional CFOs. These tend to be number-crunchers. They are chief accountants that can do magic with numbers and are often regarded as the “policemen of the company”. These are the ones to say “no” to things due to budgetary reasons. And thank God they are there. Otherwise, it would probably be madness. And they often operate behind the scenes, unlike the CEO, who is the face of the company to all.

It is also common for corporate CFOs to have years of experience in the company before getting promoted. Corporations love that. And it makes total sense. Having somebody from the inside is a clear advantage to management eyes, in contrast to somebody from the outside, that is not so familiar with the company processes. At least that is what corporates think.

What’s most important about these CFOs is that their role is very bound to finance. Even though they hold great responsibilities (finance is critical) they usually don’t take big strategic decisions. Especially if they are not related to finance.

The startup CFO**

Now that we have a base for comparison, we can take a look at what startup CFOs do. This is interesting since his/her functions are quite different from the corporate profile. And a great deal of these differences come from the nature of a startup.

The startup day-to-day is quite different from a corporation’s. Startups are fast-paced and have a lack of resources, meaning that with little money and little people, they are required to do a ton of things. And that often results in management rolling up their sleeves. And the CFO is no exception.

That is why the modern startup CFO needs to be much more than a number-cruncher. They need to have a wide company vision in order to contribute to strategy and many other fields. They can’t be bound to only finance. In fact, the CFO has the most important role in a startup after the CEO and CTO. In fact, they are so important for their companies that about 25% of them actually make it to CEO (Business Insider).

The CFO title in a startup, signals “finance person” because for a long time that’s what CFOs have been. But that’s not the case in startups. And even in some modern corporations. The role of startup CFOs goes well beyond finance. Yes -- they still have to do financial planning, cash flow management and accounting. And they need to constantly ask themselves: “How much money do we need in the next three months?”. So they need to be able to set a smart roadmap and ensure its compliance.

But the key difference from traditional CFOs is that these people are embedded in the strategic direction of the business. Other than establishing core financial processes and reporting requirements, startup CFOs are also responsible for strategic actions, like forecasting the path of growth or forming new relationships.

Startup CFOs can sometimes be described as “CEO-enforcers”. And for that, they need to have a company-wide vision of the business. And that is something they possess, due to their involvement in strategy and their coexistence with all the data that flows in and around the business.


The differences between startup and traditional CFOs are evident. Both have strong finance and accounting backgrounds, but while corporates are focused on hands-off long term tasks like investor relations, deal-making and governance, startup CFOs are 4x4s that are involved in the day-to-day business operations. Yet they hold the same title.

However, that doesn’t mean that both profiles are not fitted to switch worlds. Actually, as an article from Business Insider affirms, “the percentage of new startup CEOs who have prior experience as a traditional CFO has been rising over the past four years.”

This is an interesting point since there are a lot of startups that have HR problems just because of this. These companies don’t have a culture to cover management positions internally, but rather hire talent from the outside. And that might seem very interesting for diversity, but it might not be the case for employees with several years of experience and no promotion chances.


This post was inspired by questions provided by people like you. We love receiving new and interesting questions that help us think about data in new ways.  If you found this post interesting and have other questions that you’d like us to help answer, drop us a line at



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Richard Gargan

Richard is Cledara's in-house Content Lead. With a background in finance, he is responsible for the analysis of SaaS data to provide readers with insightful and informative analysis to help you optimize your software spend.

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