What Outsourcing a CFO Can Do for Your Startup in Its Financing Rounds?

What Outsourcing A CFO Can Do For Your Startup In Its Financing Rounds?  

By: Liron Kfir, CFO

Recently, we see many M&As, exits, SPACs, and IPOs in startup companies that, as a result, have become unicorns. More and more investors and VCs choose to adopt a “get big fast” strategy and invest in businesses that have the ability and vision to scale quickly to multibillion dollar companies. This model is a good fit for several industries, including Fintech, Cyber, Digital Marketing, Cloud, SAAS, and more. 

Financial Due-diligence processes are essential and required in such complex activities, either from the startup’s side or the investor’s side. There are a lot of necessary preparations prior to such moves.

Liron Kfir, Head Of CFO Department At Brooks-Keret, Recently Was Involved In Five Due Diligence Processes Simultaneously And Shares Her Experience And Insights:

After a few years of operating as an external CFO with Brooks-Keret, I worked with dozens of companies, gaining extensive experience and knowledge that as a previous in-house CFO took me decades to gain. My collaboration with these companies has provided me with the skills needed to guide an aspiring business through any obstacle they may encounter.

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While most CFOs build up their experience over many years, as an external CFO, I was able to develop my expertise quickly by working on multiple projects with multiple companies. For startup companies, such abilities and professionalism are invaluable. Therefore, as I engage in due diligence projects, raising funds, building a company’s budget, or managing a financial department as an outsource, I bring extensive financial and business insights to the table, and this is the most valuable competence I can provide for startups.

Managing a company’s financial department is far from easy, and the responsibility of doing so for several companies simultaneously means that I have a lot on my plate. Juggling that much responsibility has allowed me to learn how to adapt and thrive under vast amounts of pressure and give my all to the company, even during the most stressful times.

What Outsourced CFOs Bring To The Table

As an outsourced CFO working with various companies in various industries, I have developed skills unique to my industry. While all CFOs may excel at offering financial insights into their company’s specific niche, as external CFOs, we have the additional advantage of a wide range of experience, allowing us to offer a broader perspective. In addition, through working with various companies, often concurrently, we develop a skill set unique to our environment.

Our varied experiences give us expertise and insight into multiple industries and scenarios, and we develop a broad understanding and deep knowledge that can be used to grow your company’s unique business. Additionally, this also allows us to build a network of contacts within several industries.  Working with numerous companies enables us to offer a new perspective and broader view of the issues your company may face. With a broad knowledge of multiple industries, we can show you the bigger picture and build a financial strategy for your company that accounts for a range of factors you may not have considered. When a problem occurs, there’s a higher chance we’ve encountered and solved it before, and if it’s new, we’re more likely to have the tools we need to think of creative solutions.

How We Develop Your Business

When building your business, your priority should be building a financial strategy. It is crucial to have a clear and realistic financial forecast to present to potential investors during the investment stage. It’s best to enlist a CFO during the planning stages, ideally at least a year before recruitment begins, so that they have a chance to get to know the company and its market.

Your financial strategy and forecast will strongly influence investors, so it’s essential to ensure that it is professionally and expertly built. As an external CFO, my varied experience gives me the tools to create a financial strategy and forecast that accounts for multiple factors, such as changes to other industries that may affect your business.

Onwards And Upwards

As your startup gets off the ground and begins to grow, outsourcing your financial department allows it to grow with you seamlessly. An external CFO who has worked with you from the beginning will operate as an in-house CFO, helping you take your business to the next stages without the cost or maintenance required to manage a full-time CFO and financial department.