A Fractional CFO is a CFO who works part-time on a consulting basis for multiple companies. At some point in the seed to series C funding stage, a CEO will recognise that finance needs to become a strategic partner. That will not be needed full-time initially, and you will benefit from the expertise of someone more senior than can typically be attracted to early stage companies. This is when a Fractional CFO makes most sense, and Fractional Finance can help.
The financial control aspects of finance are often underappreciated. When working well, no noise is heard from or about the team.
Businesses need to know where they are, where they are going, what it will take to get there, and how things will evolve along the way.
Having established a robust core finance function, attention is focused outward to support business decision-making, particularly opportunities to capitalise on, and risks to mitigate.
Knowing how much money you have, where it’s being spent, and if/when it might run out is critically important for a business.
Having a CFO who can support you in investor conversations, helping them believe that what you describe will become reality, is a significant step towards getting money in the bank.
Having a clear understanding of the problem(s) the company is solving, what the ideal solution looks like, and how all the parts of the company contribute towards getting there, is critically important to businesses.
Fractional Finance exists to bring high growth start-ups together with a high calibre commercial CFO. This is typically the time when companies need senior, strategic leadership in the finance function to partner with the CEO, but the role does not yet warrant a full-time position. Initial areas of focus are typically cash flow, forecasting, strategy, fundraising, unit economics, decision-making frameworks, and getting the team on a clear path to scale.
You can find an article describing our approach to working with new clients here.
The ideal client is a CEO with a growing business who has a transaction finance team or outsourced services in place to manage day-to-day work (month end close, AP/AR, tax filings), but lacks a senior finance executive to support them. Their business may not yet be large enough to justify a full-time CFO. Typically these businesses will be in the A to C stages of VC funding. Earlier stage businesses usually don’t need a Fractional CFO, but benefit from ad-hoc strategic financial advice to help them set-up there business in the right way for the future.
Full-time CFOs are often hired at series B, but in many cases, there is not enough CFO-level work to occupy them, yet there might be considerably more junior work that falls to them because there’s no one else to do it. It is more efficient to hire a Fractional CFO and a mid-senior finance FTE, who in combination, can tackle the work more effectively. This also gives CEOs a clearer understanding of what a CFO can bring to the table, and a reference point for hiring a full-time CFO in the future.
Pricing is at a fixed hourly rate, using either a retainer or an ad-hoc basis. The retainer approach is best when you want guaranteed access and hours on a weekly basis. Ad-hoc is best when you don’t want to commit in advance, and don’t need guaranteed access to your Fractional CFO.
Where the role is part of the day to day executive team, clients typically require 5-15 hours per week. For narrower scope roles, targeting a few key areas, which can be a good starting point, 5-15 hours per month is common.
In our case, all work is undertaken on a remote basis contractually.
Absolutely. You can find an article describing our approach to new clients here.
You must be logged in to post a comment.