A lot of things need to work in a startup for it to successfully scale and thrive. And these may vary, depending on the kind of startup. But one thing that is common to all, and most definitely a key piece to all, is the CFO.
We talk to Xavier Sansó, founding Partner at Metrix Partners, a boutique advisory firm which provides fractional CFO and financial services to the startup community, about what makes for the ideal startup CFO.
The CFO role in a startup
“Founders and investors are becoming increasingly convinced that a CFO is one of the key roles to be filled”, claims Sansó. And that is right. But it is not always an easy thing to do because, according to Sansó because startups are places that require “very specific technical skills, a flexible attitude and the ability to cope with ambiguity and change.” Which is something that is quite different to that of a traditional CFO.
An ideal startup CFO needs a grand vision of the business, not just of its finance. Aside from finance skills, the startup CFO will be a true business partner that knows the industry he operates as well as its clients and vendors. And this is very important: she will need a strategic approach to the commercial and operations side of the business.
Sansó makes a very interesting point by relating the startup craziness to finance. He believes that this chaotic environment constantly forces the business plan, forecasts and budgets to change almost constantly. And that is something you can’t do to traditional CFOs because that goes completely against their playbook.
Something that we also wanted to highlight is how Xavier believes that CFOs should deal with short vs long term: "You also need to pay a lot of attention to how you balance the different conflicting interests, especially if you run the function with low financial resources as it is usually the case. By this I refer to the fact that shareholders will typically want a very strategic orientation for the function, but day to day matters also need to be taken care of."
But above all, he thinks that "the best CFO’s are cost neutral, from the point of view that his/her cost is paid by business optimizations, cost savings, key negotiations and other things with a financial impact."
Some SasS tools Xavier recommends for finance teams
The difference between a good finance team and a brilliant one is oftentimes in the tools they use. It is often the CFO’s responsibility to ensure that the company has the right CFO Suite in place to be able to generate real-time metrics, track cohorts and be ready for financial due diligence for the next funding round.
Sansó gives us some recommendations such as “a billing platform such as Stripe, Braintree or PayPal that also integrates the key subscription metrics, with enough segmentation and drill-down capabilities”.
He also confesses to be a fan of a tool like ChartMogul, “to integrate several platforms and connect non-subscription based revenue to generate real-time dashboards and customer lists.”
“And finally, the way all of those are tracked today is that once a year, typically at the time to put together the annual budget, all subscriptions are reviewed. And that is highly inefficient because a lot of things can happen in a year in a startup. That is why “a solution like Cledara is super useful because it brings it all in one place and helps you track it all.”
Suggestions and subscribe!
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 about finance in startups, drop us a line at firstname.lastname@example.org.
Scroll down to subscribe to our blog!