Hire a CFO for the finance problem you have now. A company that needs basic controls, a company raising capital, and a company preparing for a heavier compliance rhythm need different leaders. Write the mandate in those terms, then test for judgment, integrity and the ability to tell a founder or a board an uncomfortable number.
Write the mandate in business language
List the outcomes: a close calendar that works, a funding process, a cost view the operators trust, or a compliance gap closed. "Seasoned finance professional" is not a mandate. Include the team they will inherit and the systems already in place.
- Say whether the role owns fundraising, controllership, or both.
- Be clear about promoter or founder involvement in spending.
- Decide the qualification bar honestly. Do not imply a statutory requirement you do not have.
Test integrity and clarity
Ask them to walk through a close, a cash crunch, or a number they refused to sign. Listen for whether they can explain finance to a non-finance founder. Check references with someone who saw them under pressure, not only a peer who likes them.
- Include the CEO and, where relevant, an investor or board member.
- Ask what they would fix in the first two quarters.
- Ask what they would not take responsibility for.
Align authority, pay and announcement
A CFO without access to the numbers, or without the right to escalate, cannot do the job. Put reporting lines and signing authority in the conversation. Agree pay in fixed and variable terms that do not reward hiding bad news.
- Variable pay should not discourage a conservative close.
- Plan the announcement and the handover from the current finance lead.
- Keep the search confidential if the incumbent does not know.
Hire for the finance outcome of this stage. Test whether they will say the uncomfortable number clearly.
Questions people ask
Do we need a full-time CFO or a fractional one?
- A fractional leader can install controls and a reporting rhythm. A full-time CFO is for ongoing decisions, a larger team, or a transaction. Do not use a title to flatter a part-time adviser.
Should the first finance hire be a CFO?
- Often no. A strong controller or finance manager may be the right first hire. Use the CFO title when the scope is truly enterprise-wide.
How do we check fit with promoters?
- Put them in a real discussion about a spending decision. Chemistry without disagreement is not evidence. You need someone who can disagree and stay in the room.
Related reading
Kabir Menon
Kabir covers applicant tracking systems and leadership hiring. He explains how shortlists are actually built, for candidates and for hiring managers.
