How Can an Expansion Stage CFO Add Value?

October 28, 2009

Last week, I mentioned that many expansion stage CEOs are concerned that the company isn’t quite ready for a CFO, or that a CFO may be too expensive, or that their outsourced CFO/accountant/bookkeeper is adequate. At OpenView Venture Partners, we strongly believe that an operational CFO that can function as a true partner to the executive team is critical to supporting the successful growth of an expansion stage technology company.

Perhaps the best way to think about this for a CEO is to ask him/herself the following questions:

Has your CFO looked at your licensing strategy and customer contracts to make sure that you’ve structured them in such a way that you can correctly maximize revenue recognition?

Has your CFO worked with your product management, support and sales teams to identify possible revenue that you might inadvertently be leaving on the table?

Is your CFO acting as a strategic partner to you? To the rest of the executive team?

Is your CFO able to represent the company to investors, potential investors and the Board? Or are you the only executive filling this role?

Is your CFO working with the rest of your management team to improve business processes across the organization in order to maximize performance and profitability?

Does your CFO have a perspective, and can he or she give you advice, about how to improve product line profitability, how to improve functional resource optimization, how to maximize profitability by geographic region…and also which products, resources or geographies should be end-of-lifed?

Does your CFO push every other member of your team to perform at a higher level? Are they a driver or catalyst for continuous improvement?

Does your CFO give you a rear-view mirror of your business, or is he or she helping you see the road ahead clearly out of your windshield? Are you seeing leading indicators, or lagging? Are you crashing into obstacles, or avoiding them?

Does your company have one version of truth? Or do your managers argue about data more than they argue about the business issues behind the data?

Does your CFO really understand the drivers of your business, and are they responsive to changes in those drivers? Do you have accurate and updated forecasts at your fingertips?

Have you had your first independent audit of your financial statements yet? If not, when do you contemplate an IPO?

You might not have visualized a CFO helping your company with these areas….but this is exactly how a good expansion stage CFO can optimize your company’s performance.

Food for thought.