Why are CFOs most in-demand in startups now?

BY: Anjana Das

As CFOs help identify opportunities for cost-cutting, investments, and acquisition strategies, creating value for the company and stakeholders while taking startup to the next level, there is now an increasing trend to hire them, according to the talent searching firms and CEOs and founders are also endorsing such prominence of the CFOs.

Small or big , established or startups, the gradual emergence of CFOs as viable resources capable of gaining the trust of VCs and PEs is gaining traction. It's no longer a voluntary appointment for CEOs and top management, it's going towards a stage of "must have" for the start-ups going by the trends.

Neha Bhandari, Group CFO, Runaya

In today's fast-paced business environment, the role of a CFO has expanded far beyond traditional finance procurement and investor relations.

"Experienced professionals now leverage their expertise to drive marketing, regulatory compliance, business development, and M&A, among other critical areas. The CFO's diversified role also includes ensuring control, systems, and processes are in place to promote efficient governance, which lays the foundation ", said Neha Bhandari, Group CFO, Runaya.

Runaya is a manufacturing start-up extending its services and products to the industrial waste management industry, telecommunication industry with FRP rods, and the mining and construction industry through safety equipment.

Pratap Daruka, CFO, Tredence

“A CFO is essential for startups for creating the right financial plan, analyzing business data, and taking data-driven actions to mitigate business risk. They design and execute financial policies, procedures, and controls to ensure transparency, establish a good financial ecosystem, and boost investor confidence. CFOs help identify opportunities for cost-cutting, investments, and acquisition strategies, creating value for the company and stakeholders, ”Daruka says.

Tredence, a company that specializes in data science and AI solutions to various sectors including retail, TMT and industry.

Sandeep Katiyar, Group CFO, Finhaat

Katiyar says CFOs keep a close eye on compliances and operating plans and take corrective action in case of any deviation from business plans.

"Finance is not an ad-hoc role. It is a full-fledged function. Any organization, especially a startup, is constantly looking to raise capital in the form of equity or debt, manage day-to-day affairs in terms of accounting and finance, and overall manage compliances. All these require dedicated efforts and an expert who can manage day-to-day jobs while also constantly strategizing and planning for the future", he said.

Finhaat is a financial services distribution platform for the underserved population.

Praveen Gaur, CFO, TradeIndia.com

"CFOs play a pivotal role in any organization, whether it is a startup or an established company. From identifying potential investors to ensuring financial stability and adhering to regulations, CFOs play a key role in strategic decision-making."

TradeIndia.com is India´s largest B2B portal for small businesses based in India and around the globe.

CEOs and founders of startups are too adapting to the change in the scene where their importance is shared with the CFOs.

Somdutta Singh, Founder and CEO, Assiduus Global

Somdutta views CFOs as players who enhance 'accountability and transparency' since they have an in-depth understanding of financial rules and reporting guidelines.

Assiduus Global is a AI-powered cross-border E-Commerce accelerator, helps e-commerce brands launch, scale, and grow.

Ram Kewalramani, MD & Co-founder, Credable

"The CEO-CFO partnership is one of the most critical partnerships at the executive level. In a fast-paced start-up ecosystem, CFOs are uniquely positioned to find practicable paths to fund-raisings''.

Credable is a digital banking platform startup that embeds financial services in businesses across emerging markets.

Hemant Vishnoi, co-- founder, EnKash

"Every position in a company/startup requires a level of expertise and skill set in order to perform effectively. CFOs can aid startups with building financial plans and analyse them to make informed decisions about investments, fundraising and growth strategies. Furthermore, a CFO has a critical role to play when a startup plans to go public, as their responsibility is to ensure the company’s preparedness to meet the requirements to go public."

EnKash is a spend management startup platform that offers services like account payable, accounts receivable, expense management.

Swetha Kochar, partner , PKC Management Consultancy

CFOs can help startups to prioritize spending, make informed investment decisions, and develop financial forecasts that guide long-term planning.They can also help to build relationships with investors and lenders, which is crucial for securing funding.

Navneet Singh, CEO and founder, Avsar

We are currently seeing an increase in demand for CFOs. The reason for this trend is the fact that these CFOs have the requisite educational background with their highly specialised degrees. They also excel at financial planning and managing the cash flow in day-to-day scenarios. With their long-term financial planning, tracking of cash flow, ensuring that the company is running in profit, and strategic planning, a CFO ensures the growth of the organisation is going in the right direction.

Also Read: Why more Indian startups are hiring CFOs? Razorpay, Xpressbees and Shiprocket CFOs weigh in