October 23, 2018
You have a great tech product or service and have been operating with minimal staff up to this point. But suddenly, things start to take off. You begin to realize that certain aspects of the business now command more of your attention and there is a noticeable lack of financial expertise on your team.
This is where hiring finance professionals is crucial. We’ve gathered some helpful information on what a top finance team can offer and what the most important steps are in building one.
Finance teams take care of a variety of tasks to keep a startup running efficiently, including:
Payroll – ensuring employees get paid
Financing – fundraising processes/dealing with investors
Credit control – ensuring clients pay their bills
Cash management – overseeing accounts payable and receivable
Strategic planning – identifying the opportunities, risks, and associated costs of the business plan/model
Forecasting and budgeting – determining when the business could run out of funding
KPIs (Key Performance Indicators) – tracking and analyzing financial data
Equity and employee stock options – understanding what’s involved in equity and stocks
In addition to these traditional tasks, the role of finance teams is evolving. In a tech startup, they might also assist in areas such as optimizing cloud costs and conducting pricing analyses for new and existing products.
Aside from the day-to-day tasks a finance team performs, finance professionals also bring with them specific talents that are crucial in the success of a startup.
A CEO may understand the inner workings of the company and have a handle on most financial aspects, but a finance team can help to tell the company’s overall story by laying out the details on paper. Data can be analyzed to create a big picture outlining the past, present, and future of the company or product. This is essential for ensuring the CEO’s decision making is well-informed.
A finance team will also be able to provide highly detailed financial reports which can aid in accurate analysis and comparisons from quarter to quarter. This can provide answers to questions that may arise such as how much revenue can be expected in the first year or how much should be spent on marketing. This detailed data will also be important when reporting to current investors or working to bring new investors on board.
While there is no hard and fast rule on this, the short answer is as soon as possible. Many tech startups operate on a jack-of-all-trades basis with a few employees wearing many hats. This may work for a while, but as the business grows and the finance function becomes imperative, a team of experts will be required to ensure the company’s growth and success.
To balance cash conservation while having an expert available, it’s a good idea to start small. . Hiring contract or part-time finance professionals can help get the ball rolling; they will be able to fine-tune any systems or processes that the company has already been using before a permanent team is necessary. As soon as the budget allows, tech startups should begin hiring full-time, permanent finance team members who can take the reins and steer the company in the right financial direction.
The nature of startups tends to be intimate and familial with a small group of people going through various stages of growth together, making it important to find finance team members who will fit well within the already established culture.
Finance team members should also bring some specific qualities to the table, such as:
A professional accounting designation
The ability to originate and close deals (fundraising)
Expertise in building process and structure
Attributes that make them a trusted advisor (act as a partner)
Other skills/talents beyond finance (marketing knowledge, etc.)
Knowledge of the tech industry
The ability to see the big picture
Whether a tech startup is in the beginning stages of its financial journey looking for contract or part-time finance staff or seeking a permanent finance team to lead the way, Clarity Recruitment can find top finance candidates to fit any startup culture.
No one should walk the job search or hiring road alone. At Clarity Recruitment, we help others realize their success through a process that marries proprietary technology with unwavering commitment. Contact us today to take control of your career or to partner with us to find your next perfect hire.
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