Building a company from early stages includes dealing with a unique set of financial challenges ,moreover now, with the on-going October war and the decrease in investments in Israeli start-ups leading to more and more , companies to look for ways to prolong runways and add financial expertise to help them navigate the storm.
However, for most startups hiring a full-time experienced Chief Financial Officer is a luxury that most can not afford. That is why many Founders retain the services of a fractional CFO that offer not just financial expertise but also strategic guidance tailored for the startup's evolving landscape.
Here are a few highlights and points to think about when hiring a fractional CFO:
A fractional CFO is a financially savvy choice, offering expertise without the expense of a full-time executive. This setup is ideal for startups with limited resources that understand the value of having an experienced CFO to guide them through the different stages of building a company.
These professionals specialize in guiding startups through crucial growth phases, understanding the nuances of market expansion and operational scaling that are vital for innovators.
Look for a fractional CFO that has hands-on operational experience working with startups, make sure she understands the culture and needs of the organozation.
With experience across various sectors, a fractional CFO can provide insights tailored to your startup's field, be it high-tech, Cyber, biotech, or any other sector predominant in Israel's startup ecosystem.
Look for a fractional CFO that understands your business model, SaaS, B2B or B2c etc. as previous knowledge is crucial for builsing pricing and licensing plans and models.
Leveraging their extensive networks, fractional CFOs are known for connecting startups with key industry players, opening up avenues for collaboration and investment opportunities.
Before hiring a fractional CFO ask them how they see their role in the next round to better understand their future value to the company.
A fractional CFO is responsible for building a roadmap for financial success, aligning budgeting and investment with the startup’s short and long-term goals.
However, this is only half the work, a rational CFO should also be responsible for continuously monitoring your finances to ensure your finances are on track!
From streamlining accounting processes to implementing advanced financial technologies, a fractional CFO job is to ensure your startup's financial operations are as efficient as possible.
Discuss the use of software that can simplify and streamline your company;s finances, from simple task management systems such as Monday to bookkeeping software and real-time finance management such as CashHero, make sure you and your Financial CFO are aligned about the use of technology and its benefits.
This flexibility is particularly valuable, a business needs can change rapidly in response to new opportunities or market shifts having a Fractional CFO that is flexible and available when needed is crucial.
No one likes to discuss risk. However, having an experienced and critical finance professional on your side that always has an eye on identifying potential financial risks, offering strategies and actions to mitigate them, is essential in the high-stakes Israeli Start-up environment.
A seasoned Fractional CFO must have expertise in dealing with investors and managing fundraising efforts. An experienced CFO will attend your Board meetings and prepare the financial reports for your investors and Board members taking the load of you. They are also invaluable to building trust with your Board and investors.
If you are starting out, having a seasoned CFO on your side shows your investors you understand the value of experience and transparency when managing the company finances.
By taking on the financial heavy lifting, a fractional CFO allows founders to concentrate on what they do best – innovating and driving their business forward.
A fractional CFO is more than a financial manager; they are a strategic partner vital for navigating the complex journey from startup to established business. The focus for founders should be on recognizing the immense value a fractional CFO can add to their company.
Drawing by: <a href="https://storyset.com/people">People illustrations by Storyset</a>