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The Smarter Startup

5 Qualities of the Best Fractional CFOs for Startups

The best fractional CFOs for startups are trusted partners, excellent collaborators and communicators, and add exponential value.

Fractional CFOs come from a variety of different backgrounds, and each CFO has their own strengths, focus areas, and unique perspectives that go beyond the company financials.

That said, there are several qualities that the best fractional CFOs for startups share.

When you determine that your startup is ready for a fractional CFO, look for the qualities outlined in this article.

1. Trusted Partner

First and foremost, your fractional CFO should be a trusted partner to your startup. This means finding a CFO who:

  • Takes a genuine interest in your startup and truly wants to help
  • Is hyper-responsive to your needs
  • Has a great rapport with the founder, management team, and other employees
  • Works collaboratively with your startup and is viewed as a member of your team
  • Coaches and works with internal finance personnel to help them be their best
  • Is a thought partner; the best fractional CFOs for startups have a consultative mindset and don’t just follow a checklist
  • Isn’t afraid to push back gently and persistently when it matters

2. Excellent Communicator

Even on a fractional basis, your CFO is a core member of your team and a pillar of your company. Soft skills are just as important as technical skills, and excellent communication skills are critical. The best fractional CFOs for startups know how to:

  • Listen
  • Have difficult conversations
  • Check their ego at the door (or the Zoom login screen)
  • Read the room and be sensitive to relationships, anxieties of founders, employees, etc.

3. Proactive Leader

A proactive CFO gives the rest of the management team peace-of-mind and the opportunity to focus on their individual specialty areas by:

  • Proactively identifying needs and gaps related to finance, and offering solutions
  • Leaning forward, figuring it out, and getting it done

4. Flexible

Flexibility is a key difference between startup CFOs and corporate CFOs. A CFO with a rigid outlook and approach may do well in the corporate world but probably isn’t a good fit for your startup. A startup CFO needs to be able to:

  • Know and adapt to the changing needs of startups as they progress through key milestones
  • Guide your startup through its various growth stages and related requirements
  • Help identify when and how it might be time to think about pivoting
  • Have the creativity and the stomach to ride the ups and downs of a growing startup

5. Value-Add

Well-roundedness and ability to add value outside a strictly finance role is another key difference between CFOs who excel at startups and those who are best suited for larger, more established companies. The best fractional CFOs for startups:

  • Bring a diverse skill set that provides value way beyond the monthly close and dashboard metrics
  • Help to fill in the key gaps which are often present in an early-stage startup’s management team
  • Often have deep experience in areas like Sales, Marketing, Human Resources, Legal, Operations, Admin, and Product
  • Proactively seek out and identify ways to provide exponential value to your startup

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