A CFO is more than just a person with a strong background in finance, they are growth hackers

If you look at the team composition of early-stage startups in the Asia Pacific, most will have a Chief Executive Officer (CEO), a Chief Marketing Officer (CMO), or even a Chief Technology Officer (CTO).

Rarely will you ever find a Chief Financial Officer (CFO) on board, even though a good one can bring significant growth to a startup.

When, then, should startups in the Asia Pacific get a CFO?

As with any aspect of startup life, there is no hard and fast answer, but there are several principles you should consider before you begin your search.

Define the role your CFO would play in your startup.

While the CEO, CMO, or CTO may excel at selling the vision, they are typically not strong at making the financial argument for why your startup is investable.

Any of the founders can, of course, get better at doing so, but at what cost?

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Taking a crash course on finance would take the focus away from other key functions like product development, user acquisition, and brand building.

The CFO plays a crucial role in what otherwise would represent a significant opportunity cost for the other founders.

They basically manage your runway, improving your cash flow so that your company has the greatest chance of not only survival but success.

They also help you raise capital in the first place, beginning as early as your seed round and continuing all the way up to Series E.

Most of all, they help you deploy capital to where it will help your company grow the most.

Don’t evaluate a CFO by paper.

Some positions, such as your CTO, may lend themselves well toward an initial evaluation by resume.

In most cases, you will want someone who went to a top engineering school, has a professional track record of contributing to successful products and can code with the languages and technologies your own solution will be built on.

This kind of by-the-book evaluation goes out of the window when we’re dealing with an ideal CFO.

While you, of course, would want a CFO who has a strong background in finance (and maybe even a Certified Public Accountant), you can safely assume most candidates will meet this requirement.

Your evaluation should then be driven by their soft skills.

You will want a CFO who can establish a balance between being fluid and firm with the company’s processes, metrics, targets, and financial decisions.

This mentality is the kind that will best support the company’s growth as it starts to scale.

Consider alternatives to the CFO.

The CFO is a major hire for any company.

In instances where a company is public, the CFO reports directly to the board, just like the CEO.

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As no other C-level leader has this same kind of prominence, it’s important to choose them wisely. In some cases, you may even want to decide whether an alternative to the CFO is a better option for your startup at the time.

To begin with, if you are an early stage startup, you may not have the budget for a full-time CFO role. Assuming you do, you will also be competing with much larger companies to secure talent that is in very limited supply.

As such, successfully recruiting a top calibre CFO will take time and resources. This challenge is compounded by the fact that startups will need to find a CFO who has experience and familiarity with the growth stage that your startup is in.

Because of all these challenges in hiring the right CFO, some startups may want to consider alternative arrangements, of which there are many.

Some venture-builders, for example, offer in-house finance experts that you can plug in as an on-demand CFO. There are also capital advisories that offer guidance in strategic finance. Other boutique consultancies advise startups on everything from fundraising to mergers and acquisitions.

The key to choosing the right arrangement for you is someone in your corner who understands not only finance, but its broader application to your company, the competitive landscape, and the industry.

They must know how to use finance as a key tool in scaling the company. So while most people associate the term with the world of digital marketing, you want a finance professional, who is at their heart, a growth hacker.

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