Andrew Pease has been a CFO of Happy Returns, a UPS Company (sold to PayPal then again to UPS at a premium), Brighter (sold to Cigna-Digital), and Telescope (sold to Bally's). He joins us in the “Q&A” Series with direct and actionable advice on when and why to hire a CFO.

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Q: Do I need a CFO for my seed or Series A?

‍The short answer is no, and please don’t hire one. Any CFO you can afford in early stages probably won’t deliver what your business needs most. Instead, find a very credible and hungry Accounting Manager that can grow with the business to ensure high-quality reporting and build a solid foundation with your P&L/Cash Flow/Balance Sheet.

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Q: But can’t I just outsource my accounting in the early stages?

‍You can, but you will most likely spend a similar amount of money with worse results. Outsource accounting agencies don’t dive into your business daily and help you solve problems. They come in to pay the bills and close the books and often do it sub-optimally because they don’t have full context of the business. If your Accounting Manager is an athlete, they can also help in many areas of the business, including financial planning, running payroll, helping manage facilities, etc. If you need immediate help, I suggest you get a temp full-time resource rather than an outsource agency.

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Q: When do I bring in a CFO?

‍Think of your business like a house. If the foundation and the framing is secure, and you have the capital to continue building the house, it's time to consider a CFO. This generally happens when you A) have product market fit and the product is ready to sell at a high volume, and B) you have raised ~$20M+ or are about to do so.

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Q: What will a seasoned CFO to do for me?

‍The CFO will handle all the basics, including FP&A, controllership and financial systems, treasury, and tax. But the real value comes from their strategic planning, risk assessment and mitigation, future debt and equity raising, and being a partner to all business leaders to drive positive change. Ideally, the CFO can also assist with shared service areas like HR, legal, IT, and facilities.

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Q: What separates a good CFO from a great CFO?

‍It all comes down to the relationship that gets forged between the CEO and the CFO. A great CFO is the CEO’s “consigliere”, the Robert Duvall to Marlon Brando/Al Pacino; a key advisor, someone you can talk with about anything and someone whose opinion you respect. They advise you on how to stay out of trouble and handle tough situations, but can also directly solve problems that may arise. Generally, a strong CFO has a powerful voice in your board meetings, driving your agenda and defending the business results. They should be invested and driven to be your partner in the business. And make sure they are someone that you enjoy having around; you are going to spend a lot of time together.