Building a Finance Team: How to 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.
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 the team at the right times, finding and evaluating talent effectively, and taking the right steps to scale finance alongside the business.
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 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 have an audit coming up, and you can’t find time to prepare.
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 offer strategic advice. 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. With growth comes 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 putting out fires than thinking strategically (or worse, starts to break processes). Whether the company is doubling in size or expanding with new subsidiaries, 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. 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 team is figuring out who you’re actually looking for. A mistake many startups 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. 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 automated processes 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 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. 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 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 a financial planning and analysis (FP&A) focus early. Accounting is just as important, but you likely already have processes in place to organize financial data from that perspective. More often, startups are missing the forward-thinking side that is so important in 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 tracks 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 finance 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 a tool like Mosaic to automatically consolidate and 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 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 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.
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 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. Empower your small finance team with the right tech 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 accounting responsibilities.
We built Mosaic to be the Iron Man suit for modern finance teams. Our platform automates repetitive backend data consolidation and reporting that takes hours or days every month and quarter, freeing you up to focus on your company’s toughest challenges.
Want to learn how it works? Request a demo and see how you can turn a lean finance team into a strategic machine.