What to look for in your first Head of Finance hire?
While a Head of Finance will need to be able to handle financial operations (e.g., AP/AR) and accounting, we recommend focusing on candidates that excel at the forward-looking components of Finance, which includes planning, capital allocation, and strategic decision making (e.g., How much should our team invest in this GTM partnership). In short, you want a Head of Finance that will accelerate your decision making and help you and the team make better decisions about how to continually improve the business. These skills also translate to fundraising when you need to paint a future narrative for the business.
We have found that the best Head of Finance candidates have the following characteristics:
Experience
- Investment banking or consulting, plus
- Growth equity or private equity, plus
- Strategic Finance or Biz Ops at a high-growth startup
This background combines a solid foundation of technical training (e.g., traditional corporate finance) with the operational lens required to work within high-growth startups. For your first finance hire, cautiously approach candidates that have never worked in startups before as these candidates are usually well versed in analysis, but do not have the experience working cross functionally to create and operationalize a plan. Don’t veto this type of candidate, but test for characteristics that align closely to working in startups (e.g., comfortable with uncertainty and the other characteristics below).
You will notice we don’t mention experience in your specific business model. In our experience, great finance leaders can learn business models. They are experts in dissecting a businesses P&L and coming up with key drivers and inputs. The exception to this rule is financial services where finance leaders need experience in capital markets and credit management. Below is a quote from Michael Tannenbaum, COO & CFO at Brex, on why you shouldn’t use business model experience as a hard constraint.
“It [SaaS] can be learned. Hard to get someone w good I-banking / consulting experience + moved into tech + management, so narrowing to SaaS feels unnecessary as in my opinion SaaS is simpler than fintech for sure and probably even marketplace given the financial operations of those businesses”
Qualities
- People oriented as they will work across teams to devise plans and will interface with investors
- Process oriented as they will need to own cross-functional planning at the company
- Comfortable using data to frame decisions as they will need to help non-finance roles make decisions
- Comfortable with uncertainty as they will support teams to answer open-ended questions
- First-principles thinker as they will help you devise activity metrics to run the company
- Detail-oriented as they will be a key stakeholder in planning. You need accuracy and
- Curious as they will need to ask questions to support other functions within the company
- No Ego as the first Head of Finance will need to wear multiple hats to get the function running
- Willing to challenge the CEO and other leaders as they will need to hold other teams accountable
First Head of Finance Examples
Hired Andy Toung at 25 People and ~$1M ARR
- Experience: Banking, PE associate at Silverlake, and Founder/Chief of Staff
- 9 years of total experience prior to joining Gusto
- Silverlake is an “operationally” focused PE firm; great training for planning
- Founder role prepared Andy to operationalize his PE work and wear multiple hats
- Started as a Head of Finance, but wore many hats early on. Andy helped build the legal, office operations, and people function initially. Over time, leaders were hired for each of these roles. Andy is now the Chief Strategy Officer at Gusto
Hired Zach Grannis at 30-40 people
- Experience: Banking, PE investing at CircleUp partners
- 8 - 9 years of total experience prior to joining Faire
- Strong technical background from banking and investing in PE at CircleUp
- Faire hired a CFO 15 months later, but Zach still leads Finance & Strategy
Hired Ryan Colburn at 100 to 150 people and >$200M of GMV run-rate
- Experience: Analytics at Wayfair, Army Service, Strategic Finance at Blend
- 6 - 7 years of total experience prior to joining Whatnot
- Strong background in planning and strategic analysis (e.g., pricing analytics)
- Whatnot was in hyper growth. They needed someone to formalize planning and build out the function before they hired a CFO. Brought in a CFO 12 months later
- Ryan runs FP&A, International, and Financial Systems and reports to the CFO
It’s important to note that the first Head of Finance for most companies does not scale to the CFO. They will usually lead the function and build out the initial foundations before a CFO is brought into the company.
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