Bookkeeper, director of finance, CFO, oh my!
Choosing the right financial leadership for your B2B SaaS company is a big decision. Depending on where your business is with funding and product development—along with your company goals (like raising more capital!)—will determine the kind of hire you should consider.
You’ll always need a financial expert to oversee that side of your business, but the question is: What kind of support do you need?
Today, we’ll run through the type of finance leaders typically needed at each stage of a startup’s growth and what each key hire is responsible for managing.
Finance leadership by funding stage
Even at the earliest stages of your business, having a finance expert who can oversee critical business functions like tax preparation, account reconciliation, and more is invaluable. And as your business grows, so will your finance team. You may start with a bookkeeper and eventually need a CFO, but everyone plays a core role.
Whether you’re thinking about raising your next round or trying to secure your first, financial leadership is important to the success of any startup.
But it’s not always easy to tell what kind of financial support you need at different stages. Here’s a look at each startup funding stage and the kind of financial support that’s typically needed.
Type of finance leader to consider adding: Bookkeeper
Average salary (US): $37,000 - $47,000
Securing funding for your pre-seed startup is no small feat. And with 90% of startups failing, securing funding is just one of the many obstacles founders face.
Many pre-seed founders turn to venture capitalists or angel investors to secure their funding. But without strong financial projections for both the near and long term included in your pitch deck, it’ll be nearly impossible to raise the capital you need.
If you’re ready to raise your first round of capital—like if you’ve got product/market fit, you need to build out your team, or there’s clear positive feedback from early users—you’ll need to have a pulse on your company’s finances.
Working with a bookkeeper to oversee basic business transactions and financial reports at this stage is highly recommended. With a bookkeeper, you’ll have accurate records of your company’s financial journey, which allow you to not only track the growth of your startup but can help with projections necessary to secure funding.
At the pre-seed level, it might make sense to work with a bookkeeper on a contract basis as hiring full-time is costly at this stage.
Bookkeeper responsibilities at a glance:
- Record financial transactions and balance the books
- Cross-reference the books against bank statements and other source documents to confirm accuracy
- Summarize the business’s financial position
Type of finance leader to consider adding: Accountant
Average Salary (US): $57,000 - $98,000
Once you’ve gotten over the initial funding hurdle and reach the seed stage, your financial needs will shift. You’ve got more money in the bank and need greater oversight on how best to spend it—whether it be to hire more team members, invest in prototypes of your product, or whatever your business needs.
Hiring an in-house accountant after securing Seed funding means someone on staff to analyze the data your bookkeeper has been maintaining. If you choose to hire someone more senior, you’ll have someone on staff to oversee account reconciliations, manage the general ledger of your startup, help with audit preparations, and more.
While the admin tasks responsible by bookkeepers are essential functions, an accountant takes things a step further and can manage the complicated financial aspects of your startup—like avoiding tax issues and putting together financial projections—as well as offering crucial insight and analysis based on the reports created by your bookkeeper.
Accountants typically come with a higher price tag than bookkeepers, so hiring one post-seed funding is wise.
Plus, if you’re gearing up for your next round of funding, you’ll want a more robust financial picture to present to potential investors, which an accountant can provide.
Accountant responsibilities at a glance:
- Ensure the accuracy of financial documents, as well as their compliance with relevant laws and regulations
- Prepare and maintain financial reports
- Prepare tax returns and ensure taxes are paid properly and on time
- Evaluate financial operations to identify issues and offer solutions
Type of finance leader to consider adding: Director of Finance
Average Salary (US): $129,000 - $255,292
As your startup continues to grow and raise funds, you’ll need to add to your financial team to keep up with business needs. In addition to an accountant, you may consider hiring a Director of Finance to lead your growing finance team.
A Director of Finance is responsible for important functions like overseeing and directing the financial planning and strategy of your startup, analyzing and reporting on the financial health of the business, managing staff accountants, bookkeepers, and other financial professionals on the team, and more.
This role—like other senior-level positions—puts an emphasis on strategy and planning over the daily, in-the-weeds tasks one would see with a bookkeeper or junior accountant. While a Director of Finance may hold some monthly or quarterly tasks, like forecasting and budget review, and more. This is especially true if this is the highest financial position at your startup.
Rajeev Dham of Sapphire Ventures says hiring a Director or Finance at this stage will help make sense of your company’s financial situation, which is crucial for raising your next round:
“I'd love to see a Director of Finance at sub $5M ARR who can really dig into the data, understand it, who's done it maybe one time before. You're already out there raising your Series B—and that's real money and real capital investment that you're asking from investors. Having your house in order and understanding what it all means is critical not just for investors, but of course for running their business.”
Director of Finance responsibilities at a glance:
- Drive the financial planning of the company by assessing performance and risks
- Have sound awareness of the company’s financial position and assess potential risks
- Oversee the company’s finance tech stack
Series B, C, and D+
Type of financial leader to consider adding: VP of Finance and CFO
Average Salary (US): VP of Finance: $315,000 | CFO: $419,000
Raising Series B, C, and D rounds of funding may mean more money in your account, but this also means greater financial oversight is needed, too. Depending on where your startup is financially, it may make sense to add other levels of senior leadership to your payroll.
A VP of Finance is a senior leader responsible for managing the finance team (including growth and development of said team), auditing, payroll management, FP&A, and more.
👉 You should likely have your VP of Finance in place when you’re generating between $5M and $20M in ARR.
As your business continues to grow, you’ll reach a point where hiring a Chief Financial Officer (CFO) will be essential. A CFO oversees the entire finance department and is largely tasked with financial goal-setting, raising capital, advising the CEO, and financial strategy.
👉 You should likely have your CFO in place when you’re generating around $25M in ARR.
CFO responsibilities at a glance:
- Advising the CEO and executive team on financial and ops activities
- Representing your company from a financial lens
- Leading and developing financial strategies for your company
- Leading the finance department
Building your finance team is a marathon, not a sprint
As with any team within your startup, as the business grows, so will your financial team. You’ll likely need a skeleton crew to start to keep financial operations running, but your needs will shift and more robust expertise and support will be needed.
When should you hire a bookkeeper and/or accountant? The sooner the better.
When should you hire a Director of Finance? Likely when you're a Series A company.
When should you hire a VP of Finance? Between $5M and $20M of ARR.
When should you hire a CFO? Near $25M in ARR.