How to Build a Finance Team and Hire for High-Growth Startups
No one is going to give you a blank check to build your finance dream team. You need a strategy to stay lean while adding strategic value to the business. Learn the 3 keys to making every hire count.
Founder and CPO
When Fivetran’s VP of finance looked back at how he guided the company to unicorn status, he was quick to note one thing he’d have done differently: hire more people on the finance team sooner to keep up with hypergrowth.
If only it were so simple. When the business is investing heavily in sales, marketing, and product to drive growth, no one is giving you a blank check to build your finance dream team. You’ll need to take an active role in driving business growth while maintaining a lean team.
To help fuel business growth, you need a strategic approach to hiring that makes the most of every dollar you invest in building the finance function. And that means investing in team members at the right times, finding and evaluating talent effectively, and taking the right steps to scale finance alongside the business.
Table of Contents
What Is the Role of a Finance Team?
In recent years, the role of the finance team has evolved from strictly a stereotypical back-office scorekeeping function toward a more forward-looking strategic partner in decision-making.
But what does that really mean?
Building a modern finance team starts with understanding the function’s core responsibilities. There are a few broad categories those responsibilities fall under.
- Connecting data across the business. Finance teams have the perfect vantage point in a business, sitting at the intersection of all financial and operational data. One core responsibility is building out an intentional data architecture to maintain full visibility into the numbers.
- Performance analysis and accounting. Finance can’t be a forward-looking strategic partner without being able to reliably run a month-end close process and maintain historical data integrity. This is the classic “trust, but verify” side of finance’s role that falls on the accounting manager.
- Proactive planning and growth advising. Financial planning and analysis (FP&A) has long been the forward-looking part of finance’s role. A modern strategic finance function maintains agility with rolling forecasts and leverages driver-based planning to tie forecasts to real business impact.
There are a host of other responsibilities that fall on finance’s shoulders — collaborating with business leaders to make strategic decisions, acting as the right-hand partner for the CEO, maintaining security and compliance in the numbers, risk management, investor relations, etc. But the three high-level buckets sum up the broadest range of core responsibilities.
What Is the Right Finance Team Structure?
There’s no one-size-fits-all finance team structure, but there are certain guidelines and mile markers that can help you gauge how many functions grow and evolve.
For high-growth companies, you can break finance team structure out into four primary stages:
- The early-stage. At the Seed or Series A stage, your finance team is just coming into fruition. You might have $1 million to $10 million in revenue and a solo finance function with a Head or Director of Finance working directly with the CEO. Here, you’re just starting to build out the first financial model and get a deep understanding of how the business works so you can run ad hoc analyses for growth planning and board meetings.
- The mid-level stage. In late Series A or Series B, at $10 million to $50 million in revenue, your finance team gets a bit more mature. You might bring on one or two more full-time hires — an analyst and maybe a financial controller or someone to bring bookkeeping and accounting in-house.
- The growth stage. Late Series B and into Series C is where you have to start putting financial rigor in place for a potential IPO run. You’re bringing on more analysts and working toward a team of 10 that may include more senior leadership like a chief of accounting, VP of strategic finance/FP&A, and a VP of corporate/financial strategy.
- The full-maturity stage. Once you’re at the enterprise level or have gone public, your finance team will need to reach full maturity. This includes a team of at least 10 people, built out with analysts who specialize in different departments and a full suite of finance leadership roles.
Identify the Right Times to Invest in Your Finance Team
The first step in building out your finance team is spotting the tipping points when your key responsibilities will become overwhelming and impossible to fulfill without help. Ideally, you should invest in the team before these tipping points are in sight. Otherwise, it may already be too late.
But for many companies, the clearest tipping point is when something in finance breaks. Maybe accounts receivable gets overwhelmed, and you fail to invoice your biggest customer properly. Perhaps you experience a major payroll error that disgruntles employees. Or maybe you’re struggling to find time to prepare for a financial audit.
Whatever it is, there are certain events that can shine a massive spotlight on the need to invest in finance. But your goal should be to build out the finance team before something actually breaks.
There are two better ways to identify when it’s the right time to invest in your finance team—neither of which requires something to break before you add resources.
- Recognize when you’re stuck in an overly reactive cycle. You always want your finance team to be in a position to help the business—to proactively reach out to department leads and act as strategic advisors. But you can’t do that if you’re constantly stuck in a cycle of looking backward, reporting on the numbers, and responding to ad hoc requests from sales, marketing, or the CEO. If it’s been a long time since you’ve been able to focus on things like product planning, increasing net revenue retention, or streamlining the sales cycle, it’s time to bring on some help.
- Project how the company’s growth plans will impact finance. As a company grows, you have to deal with higher volumes of financial data, more complex processes, and a need for more powerful systems. It’s time to bring on help when that complexity forces you to spend more time on data collection and putting out fires than thinking strategically about business needs (or worse, starts to break processes). Whether the company is doubling in size or expanding with new subsidiaries, you’re not just responsible for managing the company’s finances. You’ll be expected to pave the way for that growth. That might mean setting up new systems, like upgrading from QuickBooks to NetSuite. Or, it might mean taking time to automate more processes across the business, so things like budgeting and financial reporting are much smoother. Hire ahead of these challenges, so your team has time to handle the added complexity without falling behind.
There’s a fine line between keeping your team as lean as possible and waiting too long to bring on help. Recognize when you’re spending too much of your valuable time on low-level tasks. Build a case for business leaders and push to invest in the finance function.
Find and Evaluate World-Class Finance Talent
If you want to add world-class talent to your finance team, you need to actively find the right people, not just wait for them to come to you through a job ad. Identify the right kinds of finance pros for the job and then try to recruit the ones with proven track records.
The first step to finding world-class talent for your finance department is figuring out who you’re actually looking for. A mistake many startups and small businesses make is that they focus too heavily on finding specialists for their finance team. They identify a specific problem and find someone with deep expertise to solve it.
There’s nothing wrong with hiring specialists for certain finance roles. But for startups that are constantly evolving, there’s real value in building your finance team with generalists. It’s the approach former Dropbox CFO Ajay Vashee took as he scaled the finance function, which helped the company drive massive revenue growth on the fast track to IPO.
When evaluating generalists for your finance team, look for these key traits:
- Experience automating processes: Effective startup finance teams automate as many of the repetitive monthly/quarterly reporting aspects of the job as possible to remain lean. Ask potential finance hires if they’ve worked on finance automation in the past. Have they built some kind of database automation with Tableau? Have they used Visual Basic for Applications (VBA) in Excel to automate a complex financial model? Have they built out unique SUMIF formulas to streamline monthly and quarterly close processes?
- The ability to work autonomously: You want your early finance hires to be autonomous. When they see a problem, they take charge and find a solution without finance leaders micromanaging them. An entrepreneurial mindset helps world-class finance pros to embrace the generalist position and help the business wherever necessary.
- A willingness to collaborate: Your earliest finance hires will be crucial players in building out processes to scale. You need this person to be highly collaborative—capable of working with leaders across the business to run point on building processes that won’t break under the pressure of hypergrowth.
But where do you actually find people who embody all of these traits? Posting to job boards and searching through your network are good places to start. But one of the best strategies is to find people who have done similar work that your company is doing, just at a larger scale. Or pulling people in with backgrounds in banking, private equity, or from the Big Four accounting firms.
Your pitch should be all about ownership. World-class finance talent at these larger companies or in adjacent industries has benefited from exposure to all kinds of unique challenges and strategies—experience that can greatly benefit smaller companies. Give them a chance to take that experience and build something from the ground up. Finance pros who embody all the traits above will jump at the chance to own an early finance function at a high-growth startup.
Think About Scaling Finance in Terms of 3 Core Components
There are three things you need to think about when you’re building a strategic finance function from the ground up—people, systems automation, and communication with the business about financial data.
These aren’t exactly steps to building your finance team. But if you prioritize them roughly in the order listed, you’ll be able to lay the groundwork for a lean, modern finance function that scales.
1. People with a Strategic Focus
If the goal is to set finance up to provide strategic value to the business as it scales, you need to hire someone with an FP&A focus early. Accounting is just as important. But you likely already have accounting tools and processes in place to organize financial data from that perspective. More often, startups are missing the forward-thinking finance professional that focuses on answering strategic business questions.
Generalists with a mind for FP&A won’t just make sure the numbers are in order. They’ll dig deeper to understand if the data that accounting teams track needs to evolve to support the business. Looking at finance through the FP&A lens helps you make sure you’re capturing the right details at the right granularity to maximize your team’s strategic value.
2. Systems Automation
Automating systems reduces the amount of work your team needs to do while also enabling a much more granular level of data quality. It’s the key to scaling strategic financial management without always having to add new people to your team.
There are three things finance teams need to do to get the most out of systems automation:
- Configure your financial systems at the right level of detail and connect them. If you’re using QuickBooks, make sure you set up your departments correctly and get product classes loaded properly. Then, integrate things like expense management and payroll with QuickBooks for greater data granularity.
- Collaborate with department leaders to configure their systems in a way that ensures financial data is structured properly. For example, work with sales to make sure the CRM sets that team up for success while also exporting data in a way that makes it easy for finance to analyze.
- Consolidate as many spreadsheets as possible so that you can answer as many questions as possible without switching between models. This makes it easier to dissect problems and streamlines the monthly/quarterly updating process. (Or, you can use financial consolidation software like Mosaic to streamline financial consolidation and automatically centralize all of your financial data.)
Make sure you’re always setting up your systems with the future in mind. If you only have three departments today, configure systems as if the other five the business is planning to build out within the year are already in place. When systems are set up to track data beyond what you need right now, you’re in a better position to scale reporting and business planning later.
3. Communication with the Business About Financial Data
Once you’re tracking all the right data through automated systems and looking at it through an FP&A lens, you need to start sharing financial information with business leaders as soon as possible.
Even if you don’t have anything strategic to share early on, you need to build trust with people across the organization. Proactively share insights from your reports and have regular conversations about each department’s needs. You’ll learn what matters most to them, and they’ll start to recognize the value of a partnership with finance.
Consistent communication with business leaders sets the stage for more strategic collaboration as the company scales.
When real challenges come up and you have data to support potential solutions, your CEO and department leaders will be more likely to buy into your ideas because they’ll have grown to trust your data and insights. And this collaborative approach is especially important if you land on the bottom-up side of the top-down vs. bottom-up budgeting decision.
Turn Finance into a Competitive Advantage for Your Business
Andreessen Horowitz’s Jeff Jordan once said that “a good finance executive almost always pays for themselves immediately, whether it’s through a better fundraise, optimized company spending and cash flow, or more revenue due to key insights.” You know that’s true. But it doesn’t change the fact that you’ll have to keep your team lean as long as possible.
That’s why you need to strategically invest in your function through both people and tools. It doesn’t matter what your role is today. Whether you’re a Chief Financial Officer (CFO), Finance Manager, Finance Director, or anything in between, you need to empower your small team with the right technology so it can stay lean and still be an offensive competitive advantage for the business—not a defensive, reactive anchor stuck in a constant cycle of reporting responsibilities in accounting software.
We built Mosaic to be the Iron Man suit for the modern CFO and their teams. Our platform automates repetitive backend data consolidation and reporting that takes hours or days every month and quarter, driving finance transformation that frees you up to focus on your company’s toughest challenges. Rather than spending so much time generating financial statements and verifying financial transactions, you can focus more on financial analytics and being the strategic partner your stakeholders need.
Want to learn how it works? Request a demo and see how you can turn a lean finance team into a strategic machine.
Finance Team FAQs
What does a finance team do?
A finance team connects financial and operational data to conduct proactive financial planning and analysis (FP&A). This enables business leaders to make informed, strategic decisions and leads to sustainable business growth.
How are finance teams structured?
What competencies does a financial team need?
5 Tips to Crush Your SaaS Board Meetings
Board meetings are an opportunity to tap into the expertise of your advisors and work together to plot a path to high growth. But you can only unlock that value if you come to the board meeting properly prepared. Find out what speakers from Founders Fund, Legion Technologies, and Mosaic had to say about how founders and finance leaders can crush their next board meetings.
3 Qualities of a Good CFO (with Tips from Finance Experts)
The CFO role has to evolve from backward-looking scorekeeper to a forward-looking, strategic partner in the business. But making that happen is easier said than done. Learn how to make the leap to central strategic partner in your organization.