Who To Hire And When?
While there are no hard and fast rules, below is a guide on the recommended hiring plan for high-growth start-ups. The order is designed for a standard B2B tech company, but the order may change
based on your business. Companies with large invoice volumes or complex payrolls may need more
accounting help early, or companies in the biotech industry may need more accounts payable help
Outsourced (fractional) Accountant
This first hire should take over the back-end transactional work that the CEO is likely handling. This
involves running payroll, collecting from customers, and paying vendors. While the CEO often hesitates to outsource these straightforward tasks initially, their time is much better spent
guiding development or helping sales. A great hire will do more than just take over transactional
processing from the CEO. This hire should create a formal accounting close process to improve efficiencies and reconcile accounts to identify missing collections or payments.
Outsourced (fractional) CFO
Most early-stage start-ups do not require a full-time CFO, and their initial capital is better spent elsewhere in the organization. A fractional CFO works on a project basis or a preset number of
weekly hours. The fractional CFO manages the accounting team, develops detailed budgets, creates
and manages KPIs, and guides the financial vision of the organization. They also manage the
finance/human resources team and help determine who to hire and when.
For most companies, the best timeframe to invest in a fractional CFO is during a Seed stage fundraise.
The fractional CFO helps in the fundraising process and speaking with potential investors. They should
also be able to ensure all records and data are ready for investor diligence. Great CFOs proactively
automate manual processes to focus on strategic work, enabling a smoother fundraising process.
Controller/VP Finance – Full Time
As you consider raising a Series A, you should consider making the first full-time hire of a Controller (high-level accounting manager) or a Vice President of Finance. This senior-level person manages the day-to-day activities, with the fractional accountant reporting to them. The fractional CFO manages the overall team, but the Controller/VP of Finance enables the finance function to become more proactive. In addition to Finance/Accounting work, this hire should be enough of a generalist to help in sales operations as your organization scales.
The Controller/VP of Finance helps determine who should be the next hire, but at this stage, your team
likely has enough volume to justify a full-time accountant. Payroll, accounts receivable, and accounts
payable are more complex and time-consuming as the company scales and introduces new benefits or
varying customer contracts. Requirements from investors for financial reviews or audits necessitate
increased diligence as the company grows, involving more work for the accounting team.
After raising a Series A, the company should consider hiring a full-time CFO. At this stage, the fractional
CFO finds their attention pulled in many directions and unable to provide great support to all aspects of
the business. The fractional CFO should have the team and processes in place for a smooth transition
and help guide the hiring process of the new CFO. If the fractional CFO has done a great job, the new
CFO can step into the organization and hit the ground running.
Final Thought – Skills to Target
Across all these hires, you should target candidates with startup experience, preferably from your
industry. The pace and complexity of startups are unique and not an easy transition for an employee from a large company. Generalists are best early on, as each hire works across many different
finance/accounting functions. The key trait for success in early-stage finance is resourcefulness, as the
employee will need to identify issues, create a plan to solve them, and put that plan in place with minimal to no guidance.
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