CFO

Also known as: Chief Financial Officer, Group CFO, Fractional CFO, Interim CFO.

What does a CFO do?

A CFO is the executive responsible for the company's money: financial planning and analysis, budgets, cash, reporting, tax and audit, and the relationship with investors and banks. In a tech company the CFO also builds unit economics, prepares fundraising rounds and due diligence, and often owns legal entities across countries. As the company grows, the CFO moves from keeping the finances in order to being the CEO's partner on strategy and capital.

• builds the financial model, the budget and the cash flow forecast;
• prepares the company for rounds, audits, due diligence, an exit or an IPO;
• manages the relationship with investors, banks and the board;
• builds the finance function: accounting, FP&A, treasury, tax;
• designs the legal entity structure and tax model for operating in several countries.

When does a company need a CFO?

A company needs a CFO when finance stops being bookkeeping and becomes part of strategy: the company is preparing for a round, an exit or an IPO, entering new jurisdictions or starting to use debt financing. A common trigger is investors who want reporting to international standards and one person accountable for the numbers. Another is an M&A deal that requires experience of getting through due diligence. In a regulated business such as fintech, a CFO is also needed to deal with licences and regulators. The role will not work if the company only needs order in accounting and payments: then it is better to hire a strong Head of Finance or chief accountant and bring in a part-time CFO for the round.

CFO vs Head of Finance: what's the difference?

A CFO differs from a Head of Finance by working with capital: rounds, debt financing, M&A and the company's story for investors. A Head of Finance owns planning, budgets and control inside the company; the CFO does this through their team and adds the external side. The COO owns how the business runs; the CFO owns how it is funded and measured.

CFO vs related roles: comparison

Why is it hard to hire a CFO?

Hiring a CFO is hard because only candidates with experience in the right reporting standards, jurisdictions and types of deals fit, and that combination is rare.

• Experience is tied to standards and countries: a CFO strong in local reporting may not know IFRS or US GAAP, and the other way round.
• Few finance leaders have raised capital: most have worked with budgets, not investors.
• A CV rarely shows whether the candidate led a round or deal or took part in it as an executor.
• Reputation matters especially for a CFO, so reference checks take longer, and strong candidates rarely move in the middle of a financial year.

What to decide before hiring a CFO?

• Is the main task to put finance in order, prepare a round, exit or IPO, or run an M&A deal? The answer decides whether you need an operational finance leader or someone with deal experience.
• Which reporting standards and jurisdictions matter: local, IFRS, US GAAP? Without this, candidates with the wrong experience end up in the search.
• Will the CFO own legal, tax and the legal entity structure? This changes the scale of the role and the experience required.
• Is a finance team already in place, or will the CFO build it? Building a function from scratch and running an existing one are different skills.
• Which licences and regulators will the CFO deal with? In fintech and other regulated businesses a CFO without this experience will not cope.

Where to find a CFO?

CFOs usually come from tech companies with a similar model and stage: sitting CFOs and heads of finance, finance leaders who took companies through rounds, audits and international structuring, and former investment bankers and Big Four alumni who moved in-house. A strong profile signal is a closed round or deal where the candidate was the company's lead person. A second signal is a finance function they built themselves. NEWHR searches for these candidates by the results of their work, not by applications to a job post.

How to assess a CFO in an interview?

A CFO is assessed through a walkthrough of the finance functions and deals they led and a case on your financial model. The walkthrough covers their own role, the numbers and what went wrong; the case covers what they would ask, where they see risk and how they would tell your story to investors. The CEO and a board member or investor take part on the company side, and references come from CEOs, auditors and investors they worked with.

Strong signals:

• quickly finds weak assumptions in your model and asks about them;
• explains financial decisions through their effect on strategy;
• can talk about a deal that fell through and why.

Red flags:

• talks only about accounting and reporting, with no experience of capital;
• cannot explain their role in a round or deal listed in the CV;
• avoids questions about references from auditors or investors.

How long does it take to hire a CFO?

We present the first candidates for the CFO role within 5–7 days of the brief. The whole search usually takes one to six months; checking a CFO's reputation and references also takes time.

Related roles

• CEO — owns strategy and capital overall; the CFO is the CEO's partner on money and investors.
• COO — owns how the business runs, not how it is funded.
• CLO — handles the legal side of deals and regulation that the CFO works on together with them.
• CBDO — drives partnerships and deals that bring revenue, not capital.