For a Founder, it’s About Getting Seasoned Direction & Optimal ROI
Return on investment (ROI) is a metric that helps someone make sound financial decisions. We have realized that there’s no more suitable place to measure ROI than on the financial experts hired to help our business meet financial goals and company growth.
Of course, if your business is in its early stages, it is hard to find talent that doesn’t break your budget. When we were looking, we found that a typical in-house CFO for early-stage companies can easily reach over $200K in target compensation plus equity, which may not be the most effective use of capital since we would need that CFO to do general accounting and controller level work, too. More so, the time necessary for a dynamic CFO in a growth-focused company is rarely 40 hours per week for seed through series B companies (try doubling that). Instead, we found great solutions in choosing a flexible and outsourced option at (about) half the cost of a fully-loaded employee can be a phenomenal spend relative to the benefits received. One of the CFO firms we have worked with, which does an exceptional job with high growth and high-tech startups, is AVL Growth Partners.
What’s A CFO Firm?
Relying on an outsourced CFO means partnering with a finance-focused CFO firm specializing in finance, accounting, and high-level financial reporting.
As we searched, we made a list of relevant traits a CFO firm needs. Primarily, they should have deep expertise with companies your size and the right people to tap into for flexible needs. They should also be able to help do the following:
Bringing on a fractional CFO supported by a team of on-demand accounting and financial experts provides our company the experience and expertise of a high-end CFO without the in-house fully loaded cost–salary, benefits, equity, and bonuses–of a full-time CFO. Frankly, we think it’s the best way to build a strong financial backbone. It’s next to impossible for one person to be able to handle all of those responsibilities (or even two people); in a growth-minded company, you need expertise, prior growth experience, and agility as you reach new milestones. The way we managed finance year one and year five are entirely different scenarios.
When there is a compelling need for highly accurate financials, our experience with AVL shows that their team approach is superior. Sophisticated accounting and finance professionals dedicated to your organization as an on-demand and continuous support function are better than other growth companies’ models. Because they offer experts in many verticals, you can access a highly specialized team that understands your industry and how to scale a company.
Where Do You Start?
First, as a CFO firm, AVL learned about our business, our tech stack, leadership and communication styles, and then they taught us about their approach to Finance & Accounting — Finder, Minder, Grinder Talent Stacking. We invested in the EOS Traction system over two years ago and were grateful that their team is “EOS Fluent.” Our lead CFO began attending L10s in her second week with us.
Then, we sprinted week over week for a full month to uncover and fix some old skeletons in the closet, organize all of our financial data and build solid financial integrity using the systems we already had in place. Part of our hiring rubric when we selected AVL included “no cookie cutter” approaches, and we’re grateful they lived up to that.
Maximizing Services, Optimizing Spend
We rely on AVL based on their network, skills, and “beyond services,” which equip clients like us to maximize our reach to capital, ideas, and connections. They also provide peers in multiple industries to create support where a business needs it most.
AVL has leveraged resources outside our core team. They’ve helped connect us with one of their other clients working through a similar issue to what we were facing. They’ve helped us post one of our open positions through their network, and they had one of their other CFOs make a warm introduction to a financing group that fit a particular need that we had. This makes me feel that my AVL team indeed extends beyond my core team.
Providing Focused Financial Solutions
To produce and maintain financially sound leadership, I wanted my entire team to understand our financials better. Yes, AVL provided that too. A half-day of training and you’d be surprised at how much more useful our quarterly All-Hands are for our employees. In many ways, AVL’s approach became an employee benefit, not just a financial one. AVL has helped us:
By embedding in the company, AVL understood all pieces of the business (operational, sales, marketing, etc.) and helped tie it all together. We are 200% more versed in identifying our pipeline’s health, our cash flow, and our financial forecast on the business.
Beyond creating road maps for solid financial leadership and us, accessing a full-service CFO firm’s expertise provided the experts we needed to tap into and established vital industry and investor connections that benefitted us in myriad ways. Not only did AVL match people with similar missions and interests for a cultural connection with us, but they helped us secure funding and thought about opportunities for an exit or acquisition differently than we ever had before.
Accessing AVL’s robust expert knowledge system provided the ultimate ROI by opening avenues a single full-time CFO cannot offer.