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Part-time CFO vs. controller?

Not ready to hire a full-time CFO for funding purposes but we need someone to do more than bookkeeping. When is the right time to hire a full-time CFO versus hiring a controller instead?

19 Replies

David Crooke
2
0
David Crooke Entrepreneur
Serial entrepreneur and CTO
For software you need a CTO, and acting CEO etc. (usually founders). You don't need a CFO until you're dealing with tens of millions of dollars and sophisticated finance, and VC's know this. For the first couple of years we used a by the hour service called Virtual CFO here in town, provided a controller first and a wee bit of CFO grade advice, then we worked our way up through full time people of progressive seniority, a controller, Director of Finance and then CFO. In each case the previous one quit after a while. Be sure to give titles appropriate to where the company will be in 3-5 years and not now - can this person grow into the role? If you have to demote someone or come up with a silly title like Chief Product Officer it looks weird. I had to grow a lot in 6 years from being self appointed CTO in a team of two to CTO in a company with 350 people and an IPO cooking.
Peter Stone
0
2
Peter Stone Advisor
Attorney at Hopkins & Carley

Someone is always "acting CFO," responsible for the company's financing strategy and overall management of the finances - especially expenses. If there isn't a CFO, either full-time or rented, then the CEO has that responsibility. That can be OK for a while, depending on the personality and experience of the CEO, but he/she needs to be focusing on other things. I agree with David that a part-time outside CFO can be a good interim solution. It'sa mistake to think that a controller can substitute for a CFO. Grow into that job with proper mentoring? Sure, and that can be one of the things that your experienced outside CFO can do. Check out Early Growth Financial Services, http://earlygrowthfinancialservices.com/. They have a staff of very experienced virtual CFOs, and they operate nationwide.

Jayakumar.S Singaram
0
0
Jayakumar.S Singaram Entrepreneur
Member Founding Team at RINANU SEMICONDUCTORS LLP
Please do not go for CFO, until you find a way to earn. Else these CFO's may not help you to earn and they will not be an asset ( but for just doing low level book keeping work.. these days cloud based apps doing better).. keep away from these kind of people till you get your earning from customers ..
John Petrone
1
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John Petrone Entrepreneur
CTO at LaunchPad Central
I'd start with a director of finance/controller or even a VP of finance long before I'd consider hiring a CFO. A CFO is a much more strategic role, with a stronger presence in fund raising, investor relations and strategic relationships. More of a partner with the CEO/CMO/CPO/CTO -

You can go a long, long way with a more junior team - and might find along the way that someone internal grows into a CFO role when it's needed.
Jb Henriksen
0
0
Jb Henriksen Entrepreneur
Advanced CFO Solutions
We have been running a part time CFO firm for approximately 20 years now. We have found that smaller companies from start up to approximately $30 million in revenue can benefit from a CFO who has significant experience and only spend a few hours per week with the CEO. In order to insure the company takes on funding under the right terms it is imperative to have a good adviser on the team who has funding experience. Not getting the right advise can cost the company a lot of money in the long run.
Mike North, PhD
1
0
Mike North, PhD Advisor
North Design Labs
Great question. If you're in SF, it might be worth chatting with momentum partners. They created an interim CFO offering for this very reason--get you setup for a raise, take care of the back office, but not have to take
Perri Blake Gorman
0
0
Founder of Archively & UnrollMe
Check out DecisionCFO in NYC. They are great for this.
Reza Rassool
0
0
Reza Rassool Entrepreneur
Kwaai Oak, CTO-as-a-Service
Nate Contact Leonard Weissbach for a part time CFO. Lenacct@earthlink.net Thanks Reza Sent from my iPhone
Andrew Lockley
0
0
Andrew Lockley Advisor
Investor and strategy consultant
Get an advisory cfo first, then employ a controller before you add the cfo to the regular payroll. A younger, less experienced controller may grow into cfo role
John Seiffer
1
0
John Seiffer Advisor
Business Advisor to growing companies
There are many people who do this kind of work on a part time (not temporary) basis. That''s because it's a function all companies need but you don't need someone devoting full time to that function at all stages of a company's growth.

I would encourage you to think about functions rather than titles and find people who can perform the functions you need. Here are some functions that may be combined into different titles.

1) Financial analysis. Someone to make your financial numbers understandable so you can best use them when you make management decisions. Someone who projects the cash needs of the company based on what projects management is proposing.
2) Raising funds. Someone to prepare financial documents in support of raising investment or going for loans.
3) Accounting organization. Someone to structure the accounting system, chart of accounts, procedures etc. properly. This mean make it easy for the financial analysis person to do their job, make it possible to generate relevant reports for management, keep the books in compliance to whatever the company needs at its stage (GAAP, SOX, for Audits etc) and procedures that will diminish the potential for fraud.
4) Bookkeeping. Person (or people) who maintain the books, do account payable, receivable, collections and payroll.
5) Taxes. Person who prepares tax returns

In general the first 2 are done by someone with the title CFO and the third by a controller but when you don't need full time people you might find someone part time who can do it all.
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