It could be said that the traditional Finance Director role is dead in early stage technology start-ups.
This may seem like a sweeping statement but there is a lot of evidence out there that full time CFOs in early stage companies are a thing of the past.
If you look at the management teams of newly formed tech start-ups, very few of them have a CFO in the line-up. Going back 10 or even 5 years it was quite common to have a ‘money man’ (very rarely ‘money woman’) complete with sober tie and suit, staring out at you from the pitch deck with a very earnest expression.
My career in tech start-ups began with just such as expression. I joined Ready2shop, an internet start-up run by fashion personalities Trinny and Susannah, in early 2000. My role was to head up the finance and build the systems needed for the predicted hockey stick growth. Unfortunately, the dot com bubble burst soon after and the hockey stick remained firmly in the locker room.
Nowadays management teams tend to be purely operational, perhaps with a COO in the mix to make sure the CEO doesn’t spend all the money on fancy offices and lattes.
Enter the part-time Interim CFO. This person rarely wears a suit. They are likely to have a portfolio of 3-5 clients and will usually work with a remote bookeeper who handles day-to-day processing and an external accounting team to deal with compliance issues to keep Companies House and HMRC happy.
The interim CFO’s main role is to ‘keep the plates spinning’ with all financial systems and processes and to act as the in-house trusted adviser/sounding board/policeman to the CEO and the rest of the team. The perfect interim CFO will be an all-rounder, able to provide advice on technical statutory accounts disclosure points at one end of the scale and advise the bookkeeper on where to code an invoice at the other. CFOs who are too ‘hands-off’ should portably stick to the big company, corporate world. Likewise, this is not necessary a job for a newly qualified accountant as you need to have a few years’ experience under your belt to be able to do this role justice.
Lastly, should interim CFOs be ‘real people’ in the office or does the virtual, remote CFO model work?
Generally, I think it’s the former. Some roles work quite well on a remote basis (cloud bookkeepers for example) but the CFO, interim or not, needs to develop a real relationship with the CEO and the rest of the management team. Email and video conferencing are useful tools but there is no substitute for the face-to-face experience.
In the brave new world of tech start-ups, interim CFOs are needed more than ever. However, they will need to adapt to survive.
