The job of chief financial officer (CFO) may sound like a nightmare assignment to technical entrepreneurs, but the tasks and skills required are key to every new venture. In addition, if you are already a CFO, this position is a great springboard to the chief operating officer (COO) or even the CEO position in the startup, based on recent reports. Investors love to see a former CFO running a new business.
Twitter and GrubHub are just a couple of examples where CFOs have been asked to absorb COO responsibilities in the last couple of years. In the case of GrubHub’s Adam DeWitt, he ended up with a salary exceeding that of the CEO. Here are some key attributes normally associated with the CFO position that will maximize your value now and in the future.
1. Every startup role requires managing to financial realities. In a corporate environment, you can leave financials to someone else, but not in a startup. Every team member, from engineer to CEO, lives or dies based on cash flow, so the more they can tune their activities to revenue and expenses, the more valuable they become.
2. Finding creative ways to fund activities. While the CFO usually takes the lead in finding professional investors, everyone needs to look for ways to reduce the burn rate and maximize alternative funding sources, including bartering for services, finding partners willing to accept deferred payments and talking to friends and family.
3. Creating operational processes and procedures. As startups grow from development organizations to a sustainable and repeatable business, processes must be documented, employees hired and trained and customer-support organizations built. The best entrepreneurs take the initiative on these rather than wait for a CFO to drive them.
4. Be a trustworthy advisor and mentor to others. The fastest way to win a leadership position in a new company is to communicate value from your insights to other team members and executives. Do not count on the CFO or CEO to be the source of all knowledge and direction in your business. Leadership is earned rather than appointed.
5. Communicate the range of your talents. A good CFO has to be able and willing to tackle many challenges outside the financial realm, usually including creating legal documents, evaluating and signing vendor contracts and even human resources activities. With the advent of the Internet, you too can show expertise in any discipline.
6. Capitalize on your past industry experience. As a CFO brings real value from previous financial experience and training, every entrepreneur should work to highlight previous industry or technical activities and relate them to the task at hand. Great entrepreneurs are adept at applying things learned to a current context from a previous one.
7. Demonstrate your passion, commitment and work ethic. Investors know that the startup road is long and challenging. Thus, they look across the team of entrepreneurs for the ones who show confidence, resilience and dedication to efforts at hand. They expect to find it in all C-level executives but are always looking for the next executive team.
8. Able to focus on strategic issues and long-term outlook. Aspiring entrepreneurs seeking to position themselves as C-level executives must do more than perform day-to-day jobs well. They must immerse themselves in strategic and financial issues, just like a CFO. They also must sharpen leadership, collaboration and communication skills.
As you may conclude, the job of a good startup CFO is a hands-on role, focused not only on financials but also on the myriad of operational and strategic issues. Thus, every entrepreneur can benefit from demonstrating the same attributes, leading from financial sensitivity. If your preferred career path includes running your own startup, it pays to pay attention to your CFO.
Image credit: CC by GSK