Chief Financial Officers, or CFOs, are the face of the finance team at every company. Working closely with the CEO and Board of Directors, the CFO’s core responsibilities are financial reporting and forecasting, audit and compliance, capital allocation, and investor relations. More recently, with technology requirements becoming a greater part of every organization, the CFO role has expanded to include business intelligence and security risk mitigation.
Still interested? Here’s what you should know to become a CFO:
- Oversee all Finance, Planning, Reporting, and Accounting functions
- Develop, implement, and scale best-in-class financial controls, performance metrics, and operating disciplines to support profitable growth
- Analyze business risks and opportunities, and make recommendations as they affect the financial results of the business
- Oversee legal and regulatory controls and processes
- Make high-level decisions and assume leadership role outside of finance and accounting
- Own the end-to-end fundraising process (VC, debt facilities, etc.)
- Mentor, teach and scale the finance team
- BS/BA in Finance, Accounting, Economics, or similar (MBA a plus)
- 8+ years experience in Investment Banking, Management Consulting and/or Corporate finance
- Experience in building, training, and managing a team
- Deep understanding of business operations and ability to lead teams outside of finance and accounting
- Exceptional Excel & financial modeling skills with very high attention to detail
- Excellent communication skills and ability to develop strategic relationships with business partners
- Extra Credit Points: Experience in SQL and enterprise-level software planning systems
CFO Salary New York Average: $310,000
CFO Salary Range: $185,000 – $475,000
So now you’ve gotten to the good stuff: the CFO salary. Depending on the size of the company, the CFO salary can range from the high $100,000s to multi-millions when including stock compensation.
As a CFO prospect, there’s a lot of precedent for negotiating your compensation package, including creating a cash and stock comp bonus structure that is aligned with company objectives.
By the time you’re negotiating your salary, you’ve probably spent some time uncovering the objectives of your potential employer. These could range from stock price appreciation, growth, profitability or pure cost savings. As a finance leader, you are being brought in to guide the organization to these objectives.
You should have a formal bonus structure (based on valuation or earnings growth) that is quantitative. If you achieve certain growth metrics or stock- price appreciation, then you should be entitled to a stock or cash-based bonus. If you feel that further negotiation is warranted, make sure that you structure these negotiations around key objectives so you demonstrate to the Board or leadership team that you are aligned with their organizational vision.
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What Do CFOs Do?
The CFO remains one of the most critical roles at a company. But what exactly does a Chief Financial Officer do? Take a closer look at the responsibilities of a CFO.
Set Corporate Strategy with the Board and C-level Executives
The best CFOs know their business as intimately as any operating executive. They direct the implementation of strategic business objectives including implementing and guiding the business to KPIs. They also oversee the departmental budgeting processes and capital deployment process.
Own All Company Financial Information
CFOs oversee the issuance of financial information, including all internal financial reviews, reports to the Board of Directors and all SEC documents such as 8-K, 10-K, and 10-Q filings with (if the company is publicly held).
Own Risk Management Functions Across the Organization
A CFO must understand key elements of the company’s risk profile, including financial, accounting, technical, and legal risks. They must develop and monitor reliable control systems or insurance to mitigate risk, including keeping records that meet standards of government agencies.
Create Value Among the Investor Community
Chief Financial Officers often participate in roadshows with the VC or public investment community. They also maintain banking relationships and plan and arrange for debt funding when needed. CFOs are expected to run a competitive fundraising process that ensures the future value of the business is maximized.
Lead Multiple Departments
CFOs oversee more than just the finance and accounting teams; they have responsibility for HR, investor relations, legal, tax, and treasury departments. CFOs manage any third parties to which accounting or finance functions have been outsourced. They oversee employee benefit plans, with particular emphasis on maximizing a cost-effective benefits package. CFOs also supervise acquisition due diligence and negotiate acquisitions.
How to become a CFO
The CFO’s role has evolved over the past decade from pure scorekeepers to strategic leaders of an organization. Founders, CEOs and Boards would agree that they are looking for a Chief Financial Officer who brings deep financial knowledge to discussions and serves as the company’s public face to investors.
Beyond these core duties, CFOs are now expected to be the most involved executive in strategic resource allocation decisions. Tasked with building leaner and resource-efficient finance teams, CFOs are being asked to develop an innovation mindset.
There are four key mindsets that a CFO must have to be successful. Of course, various individuals will have more developed skills in any of the four areas below, but the best and most successful have skills in each.
1. The CFO as an Investor
CFOs should be very comfortable in being the external face of the company with the investor community. This skillset has been developed at professional service firms, such as consulting or investment banking. The CFOs with these backgrounds have strong external networks, independent thinking, and strategic insight.
The CFO is tasked with maximizing the perceived value of the company across current and prospective investors and would be well suited to adopt the language their respective investors use (i.e. marketing efficiency and capital allocation). Their ability to speak this language will also help ensure that employees are excited about their equity stakes and the prospects of their business — a key indicator in employee happiness and talent acquisition.
2. The CFO as a Finance Expert
Strong, finance skills are developed over years rotating through multiple finance roles, including controlling, treasury, audit, or FP&A. The CFO will have institutional knowledge in relevant finance and accounting issues, such as financial regulation, GAAP accounting, or capital markets. Many have advanced accounting degrees or experience at an auditing firm. These skills are well suited to early-stage companies scaling up and professionalizing the finance function. Their strong finance-function knowledge across a broad spectrum of activities is critical to effective compliance and standardization of processes.
3. The CFO as a Growth Champion
These skills are most common in startups, which have frequent disruptions that require dramatic changes in resource allocation. CFOs must develop innovative practices. For example, moving away from a typical, annual capital-budgeting process toward a more agile one, with flexible budgets, quick decision making, and performance-tracking systems to match. This skill set is very important for startup CFOs where product and strategy is evolving rapidly.
4. The CFO as an Operational Leader
Highly capital-intensive companies, such as physical goods, retailing or services businesses, need CFOs with strong operational capabilities. These businesses naturally look for CFOs who have spent time outside the finance organization, such as in operations, strategy, marketing, or general management. CFOs at these types of companies are involved heavily in business operations and strategy.
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How to Ace the CFO Interview
We’ve uncovered five key areas to help you master for the Chief Financial Officer interview. Remember, you’ll most likely be talking to Boards and CEOs so be prepared to speak first at a high level and then drill down into the details as needed.
Demonstrate that you have been an active contributor in determining overall strategy in the past. You’ll definitely want to start with your thoughts on financial strategy for companies in the past and perhaps even your recommendations for the future. Then transition to your experience in driving product, sales or operational strategy so you can demonstrate your problem-solving chops and not just be viewed as a technical candidate.
2. Fundraising & Investor Relations
The role of the CFO is to be the face of the company to investors (Wall Street and Venture Capitalists), so this question will undoubtedly come up in any CFO interview. You should lead with your experience, focusing on what you’ve accomplished and the amount you’ve raised. To a large degree, interviewers will know the facts; your job is to make them understand the process and what you have done to maximize the perceived value of your company across current and prospective investors. Think about the following when you speak about your fundraising in an interview:
- When is the right time to go to market? Focus on a mix between pure funding needs and opportunistic capital raises that maximize value.
- How do you determine how much to raise?
- How do you setup and run a process that generates a lot of interest and ensures you will be able to close the funding on time?
- Post-funding, what processes have you implemented that keep the current investors happy and prospective investors interested?
3. Financial and Operational Management
Chief Financial Officers need to have a deep understanding of an entire company, not just its finances. A successful CFO should be able to assess the value of a company based on both financial and non-financial business drivers. Talk about management experience and knowledge you have outside of the financial department in addition to your financial expertise. And be sure to do your research on the company you are applying with so you can demonstrate your knowledge across departments.
The higher you climb in a company, the more valuable people and business skills become. Go into the interview ready to talk about how you’ve motivated your teams to do timely and quality work. Be ready to give examples of how you’ve fostered growth and helped those working under you reach their career goals. You should be able to demonstrate how your leadership skills impacted the company in a positive way.
5. Commitment to Mission & Vision
Demonstrate that you understand what the company does and articulate an understanding of their mission. As one of the top 5 C-level execs at a company, you will be expected to communicate to leaders of all types. Be ready to discuss instances in which you had a disagreement on the direction of a company you’ve worked for and how it was resolved. Go into the interview with ideas on how you think the company could grow or improve its work. Showing top-notch communication skills and an innovative mindset will be key to having your best interview yet.
There are many paths to become a CFO. At Vested, we’re here to help you choose the right one.
This guide to CFO was created by the Vested team. If you are interested in a CFO position, please join us to get matched with opportunities at one of our partner companies.