The Chief Financial Officer is one of the central figures in any early-stage company. Hiring a temporary CFO can be the difference between lasting decades and failing in your first year. Especially in a competitive market such as those found in the Los Angeles area, where any edge your competitor has can make or break your early-stage company.
A CFO can help you raise capital in the early stages of your company. A CFO lends credibility to your financial model and projections, and can be an asset in seeking funding. Some temporary CFOs in the Los Angeles and Glendale area already have connections that can help you seek or crowdfund your startup capital. This will only help you build credibility with a board of investors.
The decisions an early-stage company makes are the most important. An experienced CFO can help you avoid mistakes early on so that you aren’t learning the hard way at the time when your business is most vulnerable.
A CFO also can help you optimize your cash management through solid forecasting and extending your company’s runway, in effect buying time for your small business become more valuable.
A trusty CFO can also help early-stage companies run more smoothly by directing the financial departments, freeing up a CEO to tackle the big picture. Things CFOs tackle include: insurance, leases, bank lines, negotiating benefits, legal fees, and distinguishing between service providers.
An experienced CFO knows the best way to constructively challenge a plan, claim, or proposal, thus ensuring that the model can hold up to scrutiny, thus avoiding groupthink. This will increase your model’s chances of success.
A good CFO will increase the likelihood of refinancing. Companies with strong financial leadership from the beginning can help you exceed your financial goals through accurate on-time financial reports. Few financial surprises increase investor confidence. Similarly, a temporary CFO can help you build confidence among creditors, suppliers, banks, service providers, investors, and your employees themselves. You will attract better people, better clients, and operate on a larger scale.
If you early-stage company lacks strong financial leadership you will turn away the attention of merger and acquisition buyers. M & A buyers are always looking for young companies with strong financial, administrative, and operational management.
Ultimately, a temporary CFO thus helps you get the maximum return from your investment. IN the Los Angeles and Glendale area, it can be a cutthroat market, where a lot of small businesses fail in the first year. A strong CFO, even if temporary, can help you reap the rewards of a better lifestyle so that all your hard work turns into cash in your pocket! Can you afford not to have one?