The Importance of Finance Teams in Fintech Startups
Many fintech startups will eventually fail, but some make their failure all the more likely by neglecting their finance team. In previous, more abundant fundraising periods, some smaller firms would go years before making their first finance hire – and finance executives at major fintechs think they’re making a mistake.
Adam Swiecicki, former CFO of banking fintech Brex and current CFO of workforce/payroll management fintech Rippling, recently emphasized the importance of having someone with a strategic finance background as “the first hire that you want to make.” Swiecicki, who previously worked in M&A for Morgan Stanley and had stints in both private equity and hedge funds, believes that this role is crucial for early-stage firms to become the “thought partner to the CEO” and identify the best areas for growth.
Expert Advice on Finance Roles in Startups
Michael Miao, an ex-Deutsche Bank investment banker and current VP of finance for automation startup Glean, echoed Swiecicki’s sentiments. He highlighted that finance roles in startups go beyond mere accounting functions and require critical thinking skills to interpret messy data. Miao stressed the importance of being proficient in tools like Excel or Google Sheets for effective financial analysis.
Swiecicki cautioned against hiring directly from banks or PE firms for early-stage CFOs, suggesting that alumni with startup experience are better suited for the role. He believes that individuals who have already worked in a startup environment are more likely to thrive in a similar setting.
The Rise of Fractional CFOs
Startups are increasingly opting to hire ‘fractional CFOs’, part-time professionals who may serve as CFOs for multiple startups simultaneously. While this approach is controversial, some venture capitalists prefer hiring full-time finance executives to provide a more engaging career path for talented individuals.
The allure of joining fintech for bankers often lies in the opportunity to have equity in early-stage companies. However, the equity stake decreases for later hires, making it essential for startups to attract top talent early on to lead their finance function effectively.
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