As some of you remember, I joined this forum last year and made a decision to transfer out of PWM and into corporate finance. I was lucky enough to get a job doing corporate FP&A and business analytics at a large company. Given my education level and previous career experience, I’ve moved pretty fast in terms of skills and responsibilities. Some people think I should get promoted to a senior position even though I technically only have 1 year of experience.
A close friend has been working on his start-up for 3 years straight now. It has developed a clearly-defined service, has paying customers (some of them are Fortune 500s), and 12 paid employees at. To put things in perspective, it raised $3M in funding, has real recurring revenues, was selected by Y Combinator, and the last funding round supports an 8-digit valuation.
He called me last month to ask me to be the company’s “CFO”. I told him that a real CFO needs good accounting knowledge, better understanding of the ERP systems, and that it would take me 5 years to get there.
His response was that right this second, he just needs someone simply more qualified than himself to run the bookkeeping, invoicing, payroll, bank reconciliations for 3 hours a weekend. His hope was that over the next 2 months, I’d get more familiar with the company and the start-up would need a full-time CFO, and I’d make the transition then. Of course I agreed to that, since my skills will grow in tandem with the company’s needs. The only thing I asked for in return right now was reimbursements on CPA courses and work necessities (computers, bus tickets etc).
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This is a chance to build a company from the ground up with good systems and good automation. Where do I begin with that? Right now, the start-up is supposed to be using Quickbooks.
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We agreed to discuss compensation after I figured out how much value I could bring to the table. Obviously, we’re both thinking an equity stake, maybe with a 4-year vesting schedule. What would be an appropriate %, or how would I arrive at a number?
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What kind of advisors should I be capitalizing upon? This might be related to #1
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What is the most dangerous/difficult thing about being a CFO of a company with 10-50M in annual revenue?
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Assuming the end-game is to be the CFO of the start-up, which might have $5M or even $10M in recurring revenue in 2 years, which option is better for my next 24 months:
- Being a senior financial analyst at a disorganized company (horrible technology and systems) where I have close contact with the CFO and multiple VP’s, and direct involvement with reports to our shareholders, and the oppurtunity to train 2 other analysts
- Being a bottom-rank financial analyst at a Fortune 500 company that probably won’t let me have those responsibilities, but will expose me to real systems like Hyperion, Essbase, Peoplesoft, SAP etc