Building a finance team for startups: Key roles for sustainable growth
A strong financial team is essential for a startup's success and long-term growth. Our experience with hundreds of startups has shown that needs evolve, making strategic expansion crucial. This guide offers insights into key hires at each stage, from inception to Series B and beyond, to propel your startup forward.
We've collaborated with Kevin Roth, Managing Director at NYC-based recruitment agency Advice, to share best practices for building effective accounting and finance teams throughout a startup's journey.
Early stages: Establishing a strong financial foundation
Stage: Inception and pre-revenue
MVP role: Outsourced financial support
Timeline: Varies depending on specific needs
Laying a strong financial groundwork is crucial in the inception stage. Balancing cost-effective operations with robust oversight is challenging for many startups, but outsourcing financial services offers flexibility and several benefits:
Specialized expertise: Access to a pool of experts providing guidance tailored to your startup's unique challenges.
Cost efficiency: Especially in the pre-revenue phase, outsourcing offers top-tier financial support without the cost of a full-time hire, allowing resources to be allocated toward growth and innovation.
Scalability: Outsourcing allows financial services to grow with your business, ensuring smooth transitions and continuous support as it evolves.
Choosing the right financial partner
Selecting the right financial partner is pivotal for your startup's long-term success. The ideal firm should have a solid track record with startups in your sector and offer comprehensive services from accounting to strategic financial planning. Additional considerations include:
- Deep dive: Ask about their experience with startups, their financial management strategies, and how they support growing companies.
- Verify credibility: Check references and testimonials to evaluate their track record with similar businesses.
- Long-term partnership: Look for a dedicated partner capable of evolving with your team, molding to fit its changing needs.
- Tech-enabled approach: Ensure that the firm prioritizes and embraces the latest technologies to build efficient and scalable solutions.
- Cultural fit: Ensure the team's culture and philosophy align with your startup's values.
Scaling up: Focus on fundraising efforts
Stage: Seed to Series A
MVP role: VP of Finance
Salary range: $200-$250K plus equity (0.5%-1.5% of the cap table)
Hiring timeline: 8-12 weeks
Introducing a VP of Finance can dramatically enhance your financial framework and fundraising efforts, maintaining efficient operations without compromising on growth and setting a strong foundation for the next 2-3 years.
Finding the right candidate
Look for individuals with a robust background in investment banking or financial consulting, coupled with operational finance experience and a proven track record in a similar startup environment. Additionally, at least one year of tenure with a Series A or B startup is essential to ensure familiarity with early-stage growth challenges and opportunities.
Interview strategy
Incorporate case exercises that reflect real-world scenarios. For instance, have candidates prepare a financial model for an investor meeting, testing their skills in a practical setting. Further along in the process, have the final candidate sign an NDA to access your company's financials, offering full transparency of what they’re stepping into. This ensures they understand the financial outlook and current standing, helping them enter the role with open eyes.
Advanced growth: Preparing for an audit
Stage: Series B and Beyond
MVP role: Controller
Salary range: $175-$200K plus a 10-20% bonus and stock options
Hiring timeline: 6-8 weeks
A strong Controller can bring much-needed structure and oversight to a startup's financial operations, ensuring seamless audits and paving the way for long-term success. A great accounting leader ensures optimization, efficiency, and automation, helping the company breeze through its first audit, which is crucial for maintaining the confidence of current and prospective investors.
Finding the right candidate
Look for a combination of public and private accounting experience, with exposure to industry-specific accounting concepts such as COGS for CPG or Revenue Recognition for SaaS. Ensure they’ve led a company through a full annual audit and have experience with financial system implementation, particularly an ERP. Below are a few additional search tips:
- Involve your outsourced accounting team: They can vet technical skills and provide insights into the accounting landscape.
- Prioritize technical capabilities: Don’t prioritize dynamic personality traits over technical skills. The best accounting leaders may come across as calculated and deliberate, but that doesn’t mean they can’t keep up in a startup culture.
In summary
A robust financial team is essential for a startup's sustainable growth. By hiring crucial financial roles at each stage, startups can ensure they have the stability and agility needed to navigate operational challenges, capitalize on opportunities, and pave the way for long-term success.
About Furey
Furey is the accounting, finance, and payroll partner for venture-backed startups. We build solutions that combine the best guidance and the smartest technology to help companies make informed decisions and move forward confidently. Our clients—high-growth startups across industries—have raised nearly $2 billion in funding to date. To learn how we can work together, get in touch with our customer team.
About Advice
Advice is the trusted recruiting partner for startups and emerging growth companies throughout the tristate area. With a specialization in accounting & finance, the Advice team employs a consultative and relationship-oriented approach to ensure that you can identify, attract and hire the best possible talent for your organization at the most critical stages of growth. Visit adviceny.com to learn more.
