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4 Finance and Accounting Models for Emerging Growth Companies

Chris Schwalbach  ·  June 16, 2021  ·  8 min

When you start a company, everything seems to operate at 200 miles per hour. You prioritize the aspects of business that will fuel immediate growth — such as converting prospects into loyal customers by constantly developing, improving, and marketing desirable products. So, you devote resources to these areas and minimize costs elsewhere. 

This prioritization is what typically leads many startups to adopt lean finance and accounting models. 

We see this all the time, and it’s a surefire way to create more problems later — problems that will expand as your company progresses through the stages of growth. 

However, when emerging growth ventures (EGs) prioritize the finance function early on, they can improve visibility, avoid costly hurdles, and accelerate growth. That’s why new companies must incorporate a proper accounting and finance model at the onset, which begs the question: What model is best for you?

Will you leverage a cloud-based platform — or employ a full-stack CFO firm? 

There isn’t a one-size-fits-all solution. Ultimately, the decision hinges on your company’s objectives, management expertise, and budget. To help you select the optimal structure, we’ve outlined four finance and accounting models for emerging growth companies, including their advantages, disadvantages, and ideal corporate fits. 

Finance-as-a-service Model

One way to solve your finance and accounting needs is to rely on the finance-as-a-service (FaaS) model. Backed by automation, cloud-based technology, and the promise of Machine Learning efficiencies, the FaaS model enables EGs to outsource some or all of their finance and accounting functions. 


The primary advantage of the FaaS model is cost. For fixed annual payments, platforms like Pilot and Bench.co provide outsourced CFO services, bookkeeping, and tax services. For instance, Pilot offers monthly engagement with a CFO to update financials and business metrics for $900 a month — or annual forecasting and budgeting plans for higher price levels. 

Depending on your needs and budget, you could automate administrative tasks like tracking accounts receivable, accounts payable, and inventory — or completing annual tax filing requirements. The segmentation of services also allows EGs to select financial consulting on an as-needed basis. 

Lastly, since these platforms are cloud-based, you can readily access your company’s financial information anytime, anywhere. 


FaaS models automate and streamline corporate responsibilities, but they aren’t without disadvantages. While these platforms offer outsourced CFO services, they’re generally an extra — which can negate some of the cost-benefit. 

In other words, EGs must pay more and more to unlock the entire arsenal of CFO services, expertise, and guidance. This tiered access prompts an all-important question: Will a FaaS CFO be proactively supportive — or reactive when you call them? It’s a potential trade-off. 

Suppose you'll eventually need regular CFO advice on models, fundraising, investor communications, equity management, insurance, and contracts management. In that case, this solution may not be able to serve your longer-term needs.  

Who benefits the most from the FaaS model?

Companies with the following characteristics are most likely to benefit from the FaaS model:

  • EGs with simple structures and minimal operational complexities
  • EGs with high transaction volume 
  • EGs that don’t need on-demand CFO assistance
  • EGs with minimal equity and debt financing requirements 

Full-Stack CFO Firm Model

EGs that follow this model leverage a fully outsourced financial management and operations team, including CFO services and bookkeeping. Compared to the FaaS Model, the full-stack CFO firm approach is far more personalized, proactive, and adaptable. This is our approach at AVL Growth Partners.


Fractional finance services provide a blend of advantages. These services are less expensive than hiring full-time personnel, and you still benefit from employing an experienced team with proven tools and methodologies. Unlike the FaaS model, you’re more likely to have a dedicated CFO that’s committed to helping your business grow through proactive strategies — as opposed to reactive adjustments — and operates as part of your management team.

The full-stack CFO approach can provide holistic top-to-bottom solutions from the CFO down to controller and bookkeeping services. This helps companies establish their back-office functions the right way, gaining a system of internal controls to maintain compliance, protect financial data, and avoid administrative delays and mishaps. 

Finally, a fractional CFO can advise companies on debt and equity capital raises, as well as potential mergers, acquisitions, and an IPO. 


The full-stack model is a comprehensive solution to a budding enterprise’s holistic financial needs, so it’s most effective when there’s substantial work at every level within the stack. But if the EG doesn’t require CFO guidance at their current stage, the full-stack model may be overkill. 

Along the same lines, under the full-stack model, the CFO’s firm manages a variety of functions, such as staffing, client onboarding, client success, quality, firm management, and so on. As a result, it often comes with higher costs relative to other models.

Who benefits the most from the full-stack CFO model?

Companies with the following characteristics are most likely to benefit from the full-stack model:

  • EGs that already have a strong management team but still lack the oversight of a financial expert
  • EGs that don’t have the need or resources to hire a full-time CFO but still require guidance
  • EGs preparing for significant scale
  • EGs with an eye on raising capital or pitching to investors down the road

Contractor Model

In many ways, the contractor model is quite similar to the full-stack model. However, under the contractor model, your executive team must “own and manage” all of the contractors to ensure they’re working cohesively. 

It’s like serving as the general contractor for the construction of a new house. You can search for, locate, and hire expert subcontractors for each individual job, while also tracking and coordinating the group’s schedules and availability. Alternatively, you can outsource this responsibility and hire a general contractor (full-stack firm) that will own, coordinate, and manage the entire process. You’re still highly involved, but you don’t have to expend time and resources on a complicated process.


Compared to hiring a full-stack firm, the contractor model can be less expensive due to reduced overhead and costs. Looking back at the housing construction example, you save money by taking on a greater responsibility when you serve as your own general contractor. 

Moreover, by running the show, you can “shop” for very specific expertise based on your industry and business model. With other models, you don’t have the advantage of picking and choosing personnel. 


The obvious trade-off is time and resources. On top of hiring and monitoring, your team is also charged with finding replacements if a contractor leaves — which means transitioning the work and onboarding a new contractor. That can be a burdensome distraction for your management team.

In addition, you may need to validate that you’re not violating employment laws based on how you’re engaging with the contractor, which would require consultation with legal counsel. 

Who benefits the most from the contractor model?

Companies with the following characteristics are most likely to benefit from the contractor model:

  • EGs that want to minimize costs and have the capacity the be their own “general contractor”
  • EGs that want to hand-select their own financial experts

Hybrid Model

Companies that adopt the hybrid model hire a traditional CFO and outsource base operations. As a result, EGs can lean on automated or outsourced services while leveraging a full-time CFO’s expertise for growth. 


With a CFO in your employ, you gain a trusted partner that can glean insights from data to help you navigate financial hurdles, minimize cost inefficiencies, pinpoint opportunities, raise capital, and appeal to potential investors. In short, a strong CFO allows you to plan and scale operations fluidly. 

At the same time, EGs using this model still benefit from outsourced day-to-day operations like bookkeeping — except with the oversight of a skilled professional. 


Hiring a full-time CFO early on is a sizable investment. Beyond salary and stock-based compensation, your EG still has to search for, recruit, and hire the right person to serve in this capacity. That’s not only time- and resource-consuming but also a complex task. 

Considering your company may be undergoing constant changes, it’s hard to determine exactly what you need in a CFO. So, as an early-stage EG, investing in a full-time CFO might not be financially prudent.

Who benefits the most from the hybrid model?

Companies with the following characteristics are most likely to benefit from the hybrid model:

  • EGs at the stage where they will consistently require the services of a full-time CFO
  • EGs at the stage where capital and cash flow can attract the right caliber of CFO
  • EGs with executive teams that aren’t well-versed in finance
  • EGs with billing and accounting processes that aren’t easily automated
  • EGs that have experienced high growth in a short amount of time
  • EGs with M&A plans in the future

Unsure Which Finance and Accounting Model Is Best for You?

It’s a tough decision with long-lasting effects. We offer free consultations so that your business adopts the right finance and accounting model now and doesn’t have to backtrack later. 

Let’s talk about your business.