CFO Hiring + Comp Demystified

Daniel Himple: Yeah, sure. I mean, wow, I mean, I’ve been doing this 14 years now, which is crazy. So, interestingly, I don’t actually come from a finance background myself. I went to business school and I came straight out of school and went straight into recruitment. So that’s always been my background. So I work for a large global headhunting firm, Hays. I’ve always worked for Hays, spent the first nine years of my career over in the UK and I was then brought out here to New York where I’m based now to set up a new division and I created our senior level finance function here in New York about six years ago now. So my background has always been in senior level finance recruitment and what’s really interesting is that here in New York, working with the VC-backed startup market. So, typically the way I work is, I work in partnership with a ton of different VCs across the US, and they’ll put me in touch with the startups they invest in, and I work very closely with these startups to build out their finance functions. And yeah, conversely, I also partner with a number of CFOs and finance leaders, all who have expertise. in the startup field.

Rohit Agarwal: Pretty exciting. How did you stumble upon this particular career? Is it something that you had an insight into as you were growing up one way or the other, or did it just happen?

Daniel Himple: Yeah, I must admit it just happened. I was probably had the misfortune of graduating from school back in 2009 right in the midst of the financial crisis. It probably wasn’t one of the best years to be graduating but yeah I mean look just at the time it appealed to me because it gave me the opportunity to work in partnership with a variety of businesses and a variety of candidates. It was just a very diverse and interesting role and I kind of just fell into it. You know, the plan was to never build a career from it. I had a successful first year, second year, third year and that just snowballed. You know, like I’m saying, since then I’ve had the opportunity to come out and set up a business abroad. I now have a family out here. I run my own business out here. So, yeah, I’ve certainly had no regrets and never looked back.

Rohit Agarwal: In your view, what makes for a great recruiter?

Daniel Himple: Look, for me, the value of a great recruiter is all within their network. And then the knowledge and the insights that come with that network. You know, a great recruiter will always specialize in one specific field and not be a generalist. So, me for an example, on any given day, I might have conversations with tens of those within this field. I might speak or meet with four or five different founders. two or three different VCs or private equity firms. And I’m doing that each and every day, five days a week. 12 months of the year. Now over the course of 14 years you can only imagine the amount of insight and data and knowledge that I’m able to gather just from those conversations alone and that really enables you to become an expert in this field and I can then share that data and share that market knowledge when I’m guiding my candidates and guiding my clients. You know the key to a great recruiter is about being able to be consultative. You know I’m not here to just to find you a job. I’m here to be a consultant and guide you through these processes by sharing that insight.

Rohit Agarwal: Interesting. You, of course, have spent your early years in London and then moved to New York. What are the differences between working in these two cities and

Daniel Himple: Yes.

Rohit Agarwal: which one do you like more?

Daniel Himple: Well, I actually started off my career in Bristol in the UK. So, I spent the first nine years in Bristol and then the last six years in Manhattan. Look, for me, Manhattan is like nowhere else. The incredible thing about this city is the amount of people or population you have in such a tiny area. One of the things I adore about this city that you probably can’t get anywhere else People all in a day, you know, I’m based on Times Square and I can get anywhere in Manhattan within about 20 minutes maximum Now again in this small tiny island you have hundreds and hundreds of some of the most prestigious and prominent investors and BC and private equity firms and Thousands upon thousands of the incredible see of those and I also don’t think there’s anywhere else in the world where you can get that amount of talent and that amount of network in such a small area. So I think for me being a finance recruitment other than maybe San Francisco I wouldn’t want to be based anywhere else and I think I’d always choose New York for that reason.

Rohit Agarwal: Makes sense. What is so exciting about this role that has kept you motivated all this time?

Daniel Himple: Yeah, good question. Look, for me, I adore the fact that I’m always partnering with founders who are at the forefront of disrupting what we do in any given field. Yeah, I’m always at the forefront of different ideas and different technology and different ways of doing things. You know, typically the founders that I work with are revolutionists and they’re experts in the field. The other thing is, typically finance leaders who work within this area aren’t just money motivated. Now, typically when you work in most fields, the main driver for people is quite often money. And therefore, you spend a huge amount of your time talking about pay rises and salaries and it comes a bit corporate. maybe a bit demoralizing at times. Now the interesting thing about working in the startup field, most CFOs or most finance leaders will be taking pay cuts to come here. Most of them that will come from big public accounting firms or public companies are in particular investment banks. I can guarantee they all have earned more cash in those industries. The reason people come to these industries because they want more job enrichment, they want to take on additional roles that enables them to feel like they’re having a real impact on the growth of the business and they want to work for a business model or a vision that they’re passionate about. And having those types of conversations is so much more enjoyable than just talking about cash and compensation. So it sounds like a cliché, but look, no two days are ever the same. There’s always a different idea or a different business model or a… a different vision out there that keeps me on the edge of my seat. So yeah, it’s always exciting.

The modern CFO archetype#

Rohit Agarwal: I bet. Very interesting. You talked about some of the backgrounds of the modern time CFO. I wonder if you have any data, maybe anecdotes in terms of the distribution of backgrounds of CFOs, say accountants, FPNA folks, Curb Dev folks, investment bankers, Big Four partners, right? What are you seeing these days?

Daniel Himple: Yeah, I mean, I think… The view on what a CFO is has very much evolved over the last 10 to 15 years. Now, I can always speak a lot more when it comes to finance leaders at fast growth tech companies. But if you think historically, a CFO was always seen as almost a glorified controller. You know, the finance function within the business was seen as a cost center. It was someone that closed your books and ensured you had enough cash. Maybe that was it and therefore look typically the profile of most CFOs was someone who came from an outstanding accounting background and was CPA qualified Nowadays a CFO is seen as a strategic floor partner You know It’s someone that will be a floor partner to the founders and really help to create the strategic pathways that will grow the business And therefore naturally the profile of a CFO has changed You know more finance leaders will come from consulting and investment banking backgrounds than the main CPA backgrounds. Now, what I would stress is that doesn’t by any means mean that anyone who comes from a public accounting background and CPA qualified can’t go on to be an outstanding CFO. They absolutely can. But we are seeing that people now understand more the value just been a cross-center.

Rohit Agarwal: What are those bankers, consultants, big four partners really looking for in the CFO role and the companies that they are chasing to join?

Daniel Himple: Yeah.

Rohit Agarwal: Because I can imagine, as you said, the role fulfillment. I’ve been a banker myself, I’ve been a CFO. I wouldn’t say that investment banking didn’t do justice to fulfillment in your professional career, right? It’s… It’s amazingly fulfilling when you’re able to help a company go IPO and that makes an impact on every single employee. You help a company go raise money or do an M&A and that flow of capital goes into every single person that has been working in that company and that changes their life. And so, QTSS don’t understand, what have you heard in terms of the people that you’ve worked with over the years?

Daniel Himple: Yeah, for sure. I mean, I’ll go back to the point I stressed earlier. If you look at anyone that has spent three, four, five years in banking, that is now looking to come and work at a startup, they’re not doing that for cash. And you know, you can always guarantee that they’ve earned a higher base and bonus within those industries. The reason they want to do it is it’s quite often so that you can get exposure to a wider remit of roles and responsibilities outside of just finance. they might want to get exposure to operations, to sales, to anything that will help drive the business forward. The modern CFO are the CEOs and the COOs of the future. And come to be a CFO at a startup, you are one of the key partners that’s going to grow a business from early stage right up towards exit. So The people that are coming into the industry from outside, they want to ensure that they’ve got a seat at the table and they want to ensure that they can help to create the strategic pathways that will grow that business. They don’t want to just close the books and do the budgeting and forecasting. So yeah, they want to do a lot more than just traditional finance, which I would say is accounting and budgeting and forecasting.

Rohit Agarwal: Makes sense. When do you think a company should hire a CFO?

Daniel Himple: Yeah, it’s a question that I probably get asked four or five times each and every day. Now, look, what I would say, one of the trends that I’ve been seeing more and more, probably over the last five years, and even more so over the last two years, is Stardom and Oksana now started to bring in their first finance higher far earlier than ever before. If I look about six years ago, I would never partner with a company who any earlier, maybe late stage series B. And maybe it was when a company started to look at raising their first series C that looked to really bring in a seasoned finance leader. Last year, to give you some example, I saw… 12-13% of our business come from seed-funded businesses who are starting to bring in their first finance leader. So we are seeing that earlier and earlier, but I think there’s different factors that companies need to consider. But first and foremost, who are the founders? Is there any finance capabilities across the founders? You know, if any of the founders come from banking backgrounds or accountants themselves, maybe they can delay bringing that first finance higher. most founders tend to really come from product or engineering or sales backgrounds. It’s rare that they’ll have that finance acumen. So for those that don’t, we are seeing that trend earlier and earlier. What I would say is you don’t want to go too heavy too early. So a seed, a series A business, they don’t need a seasoned CFO. What they need is someone that they can lead a finance function without mentorship and guidance, but isn’t so experienced that they’re going to need a team immediately. Because the earliest stage business needs someone who can be an individual contributor. Someone can do the higher level strategic work, but also someone can do the lower level front work. That’s the real nuance in those early stage hires. But yeah, I think there’s different factors for each business that will dictate that.

When to hire your first CFO#

Rohit Agarwal: makes a ton of sense. There are a lot of fractional accounting, fractional CFO firms out there, and it seems like a quite fledgling business specifically catering to these startups in the tech sector. How should one think about balancing on one hand maybe a fractional CFO or an accounting firm versus having a full-time in-house CFO?

Daniel Himple: Yeah, it’s a dynamic that every single starter has to consider. When you’re pre-revenue or you’re doing less than $5 million in revenue, it’s very hard to justify having a full-time in-house finance hire. And having that fractional work from a very experienced CFO who might be doing a day or two days a week is actually a far better return on investment. Typically I’d say in the US on average most startups use an outsourced bookkeeping and outsourced Fractional CFO service will usually spend between 120 and 150 K a year on that Now it gets the point is when they stop getting the return on that investment And when do they start to bring that higher in full time the challenges? 120 or 150 K the level of person you can employ on a full-time basis is someone who’s gonna be too junior to lead that finance function on your own. At that salary level, you’re gonna get a senior manager, maybe a junior director. Now, for me personally, I think you’re better off having a fractional CFO, someone who’s very experienced, has 20 plus years experience, offering you guidance and support two to three days a week, then you are having a senior manager or an associate director. who’s never led the finance function, managing your finance function five days a week. It usually is at the point when you’re ready to start investing around 170, 180K a year. At that point is when you’re able to bring in maybe a junior VP, someone with about 10 to 12 years experience. And that person should be someone who is confident to sell the vision and sell your metrics to your investors. sit alongside you and raise capital and someone who’s really got the autonomy to lead your finance function on their own without the guidance and the mentorship from the founders. But also the benefit being that they will be junior enough to be an individual contributor and isn’t someone who’s going to need to have or demand to have a team of two or three in the first instance.

Rohit Agarwal: In that case, I would imagine most companies are going to get folks who have not spent enough time in corporate finance already. They are, as you said, coming in from maybe consulting firms or investment banking firms or big fours. How should company… what should companies look for in the trades in that kind of a VP finance and maybe roll forward a few more years, couple years, than the CFO that is coming in from either any of these backgrounds or someone who has spent some time in the corporate finance side.

Daniel Himple: So for me, if we’re looking at that very first in-house finance sire, and this is typically when you’re anywhere between seed and series B, sub-20 million in revenue. For me, the very typical template profile that we should be going after is that 10 to 12 years experience mark. It’s probably someone who spent the first three or four years of their career It’s then someone who’s gone and spent the next two to three years of their career at a public technology company, or if not a public technology company, a best in class tech company. And the reason for that is we want to ensure that they can see what much larger scale looks like. We want to ensure that they’ve seen what best in class looks like. And the most important factor, we want them to have worked for a world class CFO. That’s the key to all of this. CFOs in this market are always people who have previously worked for an outstanding CFO and had that CFO as their mentor So if they’ve gone to work for the best in class technology company and seen what an incredible CFO can do they can bring that knowledge the final piece of the jigsaw and the piece that’s always the most important is someone who’s seen fast growth and scale if If I’m a start-up and my strategic plan over the next three years is to go from 10 million in revenue to 50 million in revenue and at the same time raise a series B and a series C, I want to hire someone who’s been through that trajectory already. There are certain nuances and challenges that come with that type of growth that you just won’t know unless you’ve already been through that journey. So typically what I’d be looking for is maybe someone who’s been through that trajectory as a number two. and reported into a BPO financial CFO, and they’re now ready to come back down and do it as a number one. But for me, yeah, any startup that are looking to hire a financial leader, the real key is ensuring they’re hiring people who know the nuances and the challenge of working in a fast growth startup.

Rohit Agarwal: This is just to recap for everyone. This is amazing kind of career trajectory advice that you can get for any aspiring CFOs. As Dan is saying, spend three to four years in financial services firm, be it banking, be it consulting, be it big fours, then go and join one of the best tech companies, right? And basically work with the best of the best CFOs and kind of really hone your chops. under him or her. And then lastly, the fourth thing is see high growth, right? If you have the mix of those four, you are very well suited at the end of that whatever six, seven, eight year period to be a VP finance or at least a senior director of finance, at least the number one guy who’s kind of leading the charge at a series A or a series B startup. That’s amazing

Daniel Himple: yet.

Rohit Agarwal: advice.

Daniel Himple: Exactly. I mean the other thing to consider is, I mean it’s never too late to do anything in your career. However, the longer that people stay in banking for or even public accounting, the harder it is for them to then make that transition into other industries because they’re almost seen as institutionalized or actually you actually get to… Salary that it makes it even harder to leave. So and you know, I speak to some Incredible people who have spent the last 12 13 14 years with KPMG with Goldman Sachs and they are insanely smart and able to bring a tremendous amount of knowledge. It’s so difficult for them having done so long in that one industry to then come and join a startup, but then go and join another industry. Now, if you go for the trajectory that I just mentioned, it doesn’t. you’re not stuck in any one area because you can still go back to banking if you wanted to. If you go from a public technology company to a startup and startup’s not for you, you go back and work for a much larger technology company. If you want to carry down the remit of working for early stage fast growth startups, you’ve also got that option. So it really does open the most amount of doors for you in your career.

Rohit Agarwal: Makes a ton of sense. Why don’t we take that same kind of question in terms of, again, what should we look for in a CFO? Now really someone who is going to take you through the scale up phase to maybe, let’s say, a IPO or an M&A, whatever exit that the company is seeking.

Daniel Himple: Yeah, so. If I was to look back and try and think of when I sit in front of a founder or I sit in front of a Vestor and they say to me, Dan, these are the key things that we want you to identify or these are the key experiences that we want you to try and find. It’s going to be people who have been through a fundraise. I want to say been through a fundraise, been a pivotal part of a fundraise. The fundraising experience is crucial. Anyone who’s ever been through an exit, whether that be an IPO or a strategic sale, is never going to be short on offers. In particular, if you go for an exit at a business where you’ve spent two years or more at. If you come into a business and they exit three months later, wow, that’s incredible if you get paid out on it. But you probably wouldn’t have seen the journey that company had been from. So if you spend two years at a company and then go for an exit, yeah, you’re never ever gonna be short on offers. And there’s other things like… Have you implemented technology? Have you been through an ERP implementation? Have you helped to manage an audit? Have you built and scaled a team? Any financial accounting leader within a fast growth startup is going to be leading process improvements and implementations. So they want people who’ve got tangible experience of building out a best in class function. But those would be the big things for me. Fundraising, exit and scaling.

What CFOs look for in companies#

Rohit Agarwal: Very interesting. Let’s turn the tables a little bit and let’s understand what are these CFOs looking for the companies that they want to join? AI is something that is quite hot these days and I’m sure New York is buzzing with a lot of really cool AI startups. But what are you seeing? What are people seeking the hype? Are people seeking something that is more steady ID? Are people seeking now? We have seen a whole year of funding winter. Are they looking for something that is more profitable? What are people looking for?

Daniel Himple: Okay, yeah, I’ll answer that in two ways. First of all, what a CFO is a finance leader seeking in roles. The key phrase that is always used is a seat at the table. A finance leader in a startup does not want to be a direct report. Crucially as well. They very rarely want to report into a coo or anyone else in the business who isn’t the CEO they want a direct line into the board into the investors and into the founders and They want to have that seat at the table when it comes to strategic decision-making So there’s any startup out there who are thinking How do we best build out this role to attract the strongest candidate is by ensuring that they? Can give that person a seat at the table what CFOs are looking for or what candidates are looking for, you’re right, it’s completely changed. Everyone, given the turbulence in the market and how difficult it is to company raise capital and valuations and no one’s really predicting there’s gonna be too many exits or IPOs in the next couple of years, people are now more risk averse. So if I look back… to probably any time before coming out of COVID and before April 2022 and everything changed everyone wanted the earliest most riskiest thing possible. I want to join as early as I can get as much equity as I can and go for a big huge exit and the crazier the idea the better sign me up and actually yeah the higher the valuation and the more cash that they’ve raised even better than send me towards that. Now, naturally that’s changed and people want something that’s closer to profitability, that maybe later stage, later stage is seen as far less risky now. I find it harder to pitch the earlier stage companies now than I did before and yeah people want to make sure the company haven’t raised too much capital and they don’t have an obscene valuation. So there’s definitely less appetite for risk out there for sure.

Rohit Agarwal: have you, what have you seen the timelines of your recruiting assignments kind of changing over the years? Can you give us some data on that?

Daniel Himple: In the last two years, our average timeline from registering a role to filling a VP of Finance or CFO has increased from eight to 10 weeks. When I look at maybe the reasons for that, recruiting is more challenging during a turbulent market. This is why I try and guide a lot of my founders and a lot of my investors on. for a turbulent economy, less companies recruiting, there’s headcount cuts galore, recruiting should be far easier. So we should be able to recruit a lot quicker. It’s actually the opposite and recruitment becomes far trickier. The reason for that, if we go back to just coming out of COVID and you had the great resignation and there’s this huge boom of recruitment. Now in that market, Most of the candidates who are really happy in their jobs would say, wow I’m happy I’m not looking but yes it’s a great thing going on out there. People are making extra 30-40k and there’s 20 different opportunities out there. Screw it I’m going to take a look. Yeah let me get into a few processes let me see what’s out there. During times like this when there’s a bit more turbulent and there’s fear in the market, a lot of candidates’ mentalities might be, I’m not particularly fulfilled in my role, but man I just feel lucky to have a job. There’s no way I’m going to take a risk and move now because if I take the wrong opportunity now and I end up back on the job market six times time when maybe things are worse, you know that could be brutal. So that fear and that lack of confidence actually slows down the job market and means that attracting candidates is even harder. What I would also say is especially for finance when we look at the amount of head cut Finance wasn’t truly impacted. When companies are trying to downsize, it was mainly sales and tech where they downsized from. The great thing about being in finance is quite often you’re all somewhat recession-proof. When times are hard and you’ve got to do everything you can to have a tighter control of your budgets, to extend your runways and do whatever you damn well can to raise capital, hey, lo and behold, it’s your finance team that do that for you. So if there’s one function you’re going to try and keep hold of, it is your finance function. So yeah, that’s one of the ways to try and guide people on that. It’s actually harder to recruit right now. On the other angle, what I would say is, look, given the advancements in technology, recruit yourself. Recruitment has sped up. Now, when I first started my role 14 years ago, there was no LinkedIn. And so if I was to start a headhunting process, there was various different databases and big books of yellow pages where I’d have to go down and map out every single different company and call that company to find out who their CFO was and just mapping out the market and finding out which CFO’s work for which company. month. With modern technology that can take a day to identify that. We’ve also got different advances in AI that can maybe deal with a pre-screen or just filtering out different elements of the application process. Then obviously we’ve got things like Zoom and Skype and doing what we’re doing today. That means companies can interview candidates from all over the world. pretty quickly, you know, back in the day before video calling, if you wanted a candidate to meet with three different people in your business on different days, well that candidate would have to take off three different days from work and they might be able to do that over a month. They can now do that within three days. So technology itself has expanded the candidate pool and vastly sped up the recruitment process. The counter argument to that be is… the candidates, technology has given him a wider access to even more opportunities, the ability to speak with even more companies and therefore they also have more choice, which makes recruitment easier and challenging.

Rohit Agarwal: makes a ton of sense on the technology choices. But it’s quite surprising to me when you said that the tenure of following a role has actually increased from 8 to 10 weeks. And as you were talking, I was thinking, of course, CFO, the finance breed in general, has a different calculus of risk in their mind. a company’s capital versus when they are looking at their own finances versus when they are looking to change careers. I’m sure there is a different level of risk aversion that is coming in with that. I wonder, given that we have gone through a massive kind of shift in the valuation landscape and the multiples that are ascribed to different companies, it is also challenging for… these candidates to leave a job, pay for their ESOPs, right? And then move on to another one. Have you heard that practicality also coming into the picture where people are saying, hey, I don’t think I wanna, you know, I’m ready to buy in to my vested stock just yet based on the valuation I’ve gotten it and so on.

Daniel Himple: Yeah, it’s a dynamic. Anyone who’s granted any form of equity, it’s always a dynamic that they’re gonna have to consider when leaving a company, because potentially, they’re going to be leaving cash on the table. But that happens either way. If you’re engaged in a new job opportunity and that new company offers you equity, which they will do, and you reject that opportunity to stay at your current company, well, you still leave an equity on the table somewhere. it just makes the decision making process far more difficult.

Rohit Agarwal: make sense.

Daniel Himple: But yeah, I think it’s going to be interesting to see what a lot of companies do with their 4 or 9A valuations over the next year. A lot of people in this market joined companies two years ago when valuations were sky high. those valuations are no longer accurate. So a lot of people’s equity is now vastly underwater and those are the sort of people that are probably a little bit easier to make a move.

Rohit Agarwal: got it. It does seem like the number of CFO openings have increased dramatically over the last two to three years. Any data, any anecdotes on that front that you can share?

Daniel Himple: Yeah, sure. When I looked at Q4 of 23 in comparison to Q4 of 22, we’d seen a 22% increase in demand for CFOs or on new job recruits for CFOs. So that demand is definitely starting to return to the market. This year’s starting off very busy. We’re seeing more and more demand each and every week. So, yeah, I always say I’m not an economist. I’m not an investor. I’m a recruiter. But just when I look at the data alone from my own day-to-day job, the data would suggest that confidence in hiring is returning to the market, especially in terms of CFOs. Go back to your point you mentioned over the last five years. Yeah. I think… that all comes down to is startups are now really starting to appreciate the true value add that CFO can bring. A great CFO is always an incredible return on investment. and not a cost sensor. A CFO is not a 300, 350k person who’s going to close your books and do your accounting. A CFO, the best CFOs will always say they will more than make up their salary within the first two, three months of the role, just giving the insight that they can bring. So when you look at it like that, why would companies not make that investment earlier and earlier?

Rohit Agarwal: Well, thank you. I’ve always thought that a CFO’s salary should be paid back by just the sheer amount of savings at a minimum that one can bring in the first few months being in the seat. So yeah, very cool. Have you noticed the number of people in the finance operation also increasing or decreasing? Has there been any trend? over the last few years in terms of sheer number of people in finance function, given the criticality of the function is increasing.

Daniel Himple: Yeah, I mean, there’s a few things that I would say we’re absolutely seeing the size of finance teams within startups increasing now That goes back to startups and now making their first finance higher earlier and earlier now If you’re a first in-house finance hire at a start-up, absolutely you’re gonna be the individual contributor. But for how long? Maybe a year, maybe 18 months. But at some point you’re gonna start pushing to build out your own team. Now, if you were making your first finance hire at Series B, maybe that person starts pushing to have an accounting manager, an FPA manager at Series C. Well, if you’re making that hire at Seed, you’re gonna start building that team up at Late Stage Series A, Late Stage Series B. So naturally the team evolves bigger and bigger. The other dynamic that’s coming in, there is a lot of thought going into there’s no benefit in investing in a true CFO and not giving them the support they need to do to do the high level strategic work. by that I mean if you hire a CFO but they’re an individual contributor and 70% of that person’s time is spent on general ledger a month in close and Some of the more grunt work you are never going to get true value-add from that CFO You know from us for CFO to really be effective when a fast-growth company They’re going to need a controller or an accounting manager They’re going to need some FP&A support So by investing in that additional structure and support, you’re not actually adding more cost, you’re just ensuring the CFO’s freed up to really add the true amount of value at some of the more high level strategic elements of the role. And then I think the other dynamic is when we look at maybe some of the downfalls of these SPACs or companies whose Stop price capitulated after IPO There’s a number of reasons for that and that goes beyond my expertise But one of the main criticisms that gets thrown out of these companies is they didn’t build out the teams quick enough to operate as public companies You know Most great CFOs or public companies will tell you it would take at least two years to get public company ready. Well, two years before going IPO then, you should have a technical accounting manager, a financial reporting manager, and all the different roles that you would usually only attribute with being a public company. There’s no point in making those hires six months before you go IPOs. And again, that naturally meant that startups or pre-IPO companies were building out the finance and accounting teams earlier than ever before. or we’ll continue to do that once the appetite for IPO returns.

Rohit Agarwal: Hmm, quite interesting. Yeah, that makes a lot of sense. I think the companies get a lot of advice from bankers in terms of starting their IPO readiness process couple years in advance, but I think they should also hear from some of the recruiters that they should start building out the for the function as well, couple years in advance.

Daniel Himple: I take all my advice from the CFOs I speak with and there’s nothing more scary to a CFO when I say, hey, I’ve got this amazing company, they’re Series E and they are blowing up and they want to go public in two years. And every CFO goes, ah, that’s going to be hell, two years in Series C, that’s way too quick. They don’t know what they’re letting themselves in for. Yeah, so that CFOs don’t find that sexy and fun and exciting. They see that as over ambitious and probably a lack of understanding. A lack of understanding for maybe founders just how long it takes to truly get IPO ready.

Rohit Agarwal: It always takes longer than you think.

Daniel Himple: Yeah, I must say as well, most CFOs I know only go for an IPO process once. I very rarely see a CFO go for it once and say, hey, Dan, that was so much fun, sign me up again. And here’s the other challenge. Whenever we’re recruiting a CFO for a company who wants to go IPO, they say, Dan, you must find it’s a CFO who’s in an IPO process. Those guys and girls don’t want to do it again. So that’s always the most challenging role to hire.

Rohit Agarwal: Now, I always equate that, you know, taking a company public from a CFO standpoint to going from that zero to one journey for a founder. It’s almost equivalent sort of pain and tenacity that you go through. Yeah, makes a ton of sense. Tell us in all these years, as you have interacted with a bunch of CFOs, bunch of founder CEOs, VC firms, I’m sure you have heard a lot. Any patterns that you have noticed where the CFO hires have not worked and the CEO or the VC firm is coming to you and say, hey, Dan, we need to replace this guy. Can you find a replacement? What has happened in those scenarios where the hire has not worked?

Daniel Himple: Yeah, the most common traits were, I mean, it happens rarely, but it does happen. Last year, I made 37 different placements and of which one didn’t work out. So it does happen. When it doesn’t work out, and I looked at the reasons why, it’s usually a number of things. The most common one would be, the company haven’t been transbound enough about the challenges within the business. Now, part of any recruitment process, when you’re trying to attract the very best talent within this market, is selling the company and selling the growth and the trajectory and highlighting all the cool and sexy and amazing things. Now, the mistake you can make is, you shy away from some of the challenges. And let’s see if I will turn up on day one and go. This wasn’t what I expected. And that naturally creates some friction pretty quickly. So it’s always best to be very clear about. potential challenges or hurdles throughout the interview process. And hey, if it scares away a candidate, then we would like to have them not become the CFO. The other thing is making sure that all parties are aligned on the strategic vision of the company. Now, if you’re hiring a CFO who… believes that hey, over the next three years, we should just focus on getting to profitability and scaling from there. But the idea behind the founders is grow at all costs and burn through cash and raise crazy high valuations. That’s not going to work out. So we just need to ensure that the strategic objectives of the business are aligned throughout that interview process. Again, going back to a point we made earlier, ensuring that the CFOs are given the resources that they need to be able to do the job, whether that be in terms of external consulting firms or external advisors, whether that be in terms of direct hires, or whether that be in terms of investments in different technologies. But I think those are all things that need to be agreed upon prior to offers and start dates. But the biggest one is always, again, that communication and having a seat at the table. a CFO and tell them, look, you’re going to be a strategic board partner, that CFO isn’t included in every single strategic meeting and board meeting and whatnot. And they feel that they’re left out of the crucial conversations, they’re going to become disillusioned and it’s not going to work out.

Building the finance team at every stage#

Rohit Agarwal: Makes a ton of sense. Beyond kind of giving a seat at the table, can the CEOs or founders and the boards do anything specific in maybe the first, call it three odd months, to create an environment for the CFO to succeed at that company?

Daniel Himple: Yeah, do you know, I’m not there’s a huge amount that can be done in the onboarding, but I think the key to success is within the interview process itself. Now, what you want to ensure is whether it’s a CFO or whether it’s any executive in the business, ensure that they’ve met with every other single executive and every single person they’re gonna be working in collaboration with, and ensure they know how they can work closely and add value to those functions. Yeah, because that’s gonna be… But the ability to work collaboratively with the other executives and the other functions in the business is going to be the way that the CFO most have success. Can they work closely with sales? Can they work closely with product? Ensuring it’s going to be the sort of culture and working dynamic that they’re going to be able to excel in.

Rohit Agarwal: Got it. Makes sense. You certainly have a lot of experience with a lot of, you know, helping building a lot of these finance functions. And we have touched upon a few of the hires that one should make as a seed or a CTSA company, CTSB company. But can we go through four separate stages? Seed, CTSA, CTSB, CTSC, private late stage, and then IPO public co. And think about the key roles, maybe two to three. key roles at each of those four stages that the companies should definitely look to hire to build a really world-class finance function. Yeah, let’s start with… yeah, please.

Daniel Himple: So I would usually say there’s three stages. Three times that starts up or hire a finance leader from inception to IPO or auto sale So you’ve got your very first in-house finance hire that will happen anywhere between seed and series B Now your very first in-house finance hire that’s gonna be someone who’s an individual contributor Again, that’s all I said probably about anywhere between 8 to 12 years experience Typically that’s probably someone who comes from more of a banking background. Not in all examples, but it’s going to be someone who isn’t necessarily a CPA, but they have enough accounting knowledge to be dangerous. This is going to be someone who’s going to be able to liaise with your auditors. They’re going to be able to liaise with your external bookkeeper, and maybe at some point in the future oversee the work of an accounting manager. But it’s not necessarily going to be someone who is a CPA who’s going to be able to close your books. build up your models, it’s going to be able to be someone who’s going to be able to lead your Series A and your Series B, and it’s going to be someone who’s experienced enough that you’re going to have faith that they can sell the story and sell the vision of the business. But most importantly, someone who can be that individual contributor and experienced enough to lead the finance firm from the ground up. That’s usually your first hire. Your second hire is usually when you’re around 30, 40 million in revenue. and usually around Series C, roughly. And this is someone, you may well give them the CFO title. You may call them a VPS, VPA, and it might be someone who… who you believe can grow into becoming a CFO. Now this is the person that’s gonna take you from your 30, 40 million in revenue to your 100 million in revenue and beyond. This is someone who is gonna be able to start really scaling a team out. I’m probably scaling a team to about five or six. This is someone who has exposure to late stage fundraisers. Now this is when that specific industry inside This is going to be someone who understands the needs of your customers, can create customer centric solutions within the business to allow for scale. This is someone who’s going to have a huge roll deck of investors. This is someone who has probably worked for a number of similar companies and have a network of candidates that they can bring into the business from similar companies. But if someone has been able to say, hey, I can create the strategic pathways that can get you from 30 million. to 100 million in revenue and above. So this is the person who will take you from being still a startup to a damn sizeable business. This is your growth. The first person is your building implementation, bring everything to house. Your second person is your growth and scale taking you to a sizeable business. So that’s your second hire. Your third and final hire is your person who’s going to lead the exit. And this is at the point where a company will start to look at bringing a public company CFO. If you’re going to be looking to take the company public, yes, you’re going to work very, very closely with the bankers who will guide and advise you on that. But typically, they will be advising you bring in a public company CFO, either someone who has gone for an IPO process or someone who knows best-in-class public company looks like and how you can build out your process and your controls and build out your own structure of the business to enable you to accelerate and go through an IPO process but most importantly operate successfully as a public company. If you’re not going down an IPO route, you’re looking for and you’re going to look to sell the business, then your final finance leader is someone who’s going to have led a sale process before. sale or a big exit and someone who’s probably worked a business here between a hundred million to two hundred two and a fifty million and above So yeah, I usually feel that is about three stages

Rohit Agarwal: Makes a ton of sense. There is kind of that inherent assumption or bias in some ways to say that the people who have joined at the earlier stage in the building stage aren’t necessarily the one who are able to scale and get the company from that 20-30 million to a hundred million kind of a range, kind of a scale. And then those people who were at that kind of 80-100 million aren’t necessarily the one who are going to be able to take the company public and then run it as a public company. Why do you think finance people or CFOs in general or head of finances, let’s just keep it because again, all three of those personas may not have the title. Why do you think head of finance struggles to scale beyond a certain scale?

Daniel Himple: Because we don’t have the knowledge or exposure of working at the next stage or at the next point in that company’s trajectory But the biggest reason why is usually when they’re misled when they’re hired Now a lot of the a lot of finance leaders who are hired at series a series B They’ll often be told hey come join us and you might become our CFO and you can lead us through the exit and They do a great job in the company’s 10 million 20 million, 30 million, and it gets to a certain point and the investors or the founders will say this person isn’t going to be the right person to lead us to 100 million because they’ve never done it. There’s certain nuances or certain scales they’ve not seen. So let’s bring in a more experienced leader who can guide them. Now if that first hire was told that they were going to be the finance leader and they’re then told actually we’re going to bring in a CFO above you, they’re disillusioned, they’re frustrated and usually they’re going to leave. Now if you hire someone and say, hey, you’ve got an incredible background at early stage companies, we would love for you to be the person who’s going to take us to 30 million revenue. Hey, look, there’s a chance you could become a CFO, but it’s probably more than likely at some point Will hire a seasoned CFO But look the benefits to at that point is you’re going to have a mentor and somebody can be able to guide you and teach You and give you the exposure of working at much larger scale That will enable you to be the CFO at a larger stage company in the future So I think it’s just about setting expectations At the beginning

Rohit Agarwal: I would actually push back a little on that and say, if someone has been able to get you to 30 million, 40 million, it isn’t gonna be that much different that this person has to do in terms of getting you to 70 million, 80 million, 100 million, right? Most of the times companies are going to be continuing to operate on the same set of products. Maybe they introduce one or two more. They are going to be sticking to their lanes in terms of the distribution, given something is already working, right? So it’s all about making sure that the ROI on the channels are coming in properly and then you are able to milk those. And really scaling technology and processes from the perspective that you are able to support a $80, $100 million. scale of a business, right? Shouldn’t companies, CFOs, boards be able to do anything about bringing in outside advisors or some kind of a learning modalities to be able to really help that person scale?

Daniel Himple: I mean look, I am not campaigning that You can’t take a company from series a to exit as a finance leader It does happen and it’s tremendous when it does but if I also look at data points, it happens very rarely I do agree From speaking to my finance leaders. It does seem like some of the nuances that come with growing revenue aren’t completely different when I listen to what founders tell me about the challenges that that they face, it can come to be the scale of a team. If you’ve always worked at a 10, 20 million dollar business, you’re probably used to only having two direct reports. When you’re working for a 50, 60, 70 million dollar business, you might have eight or nine direct reports. And even in terms of leadership abilities, that’s vastly different. When you get to 50, 60 million dollars in revenue, that’s when you’re at the point of, hey, an exit is within the next two years. Most investors will be saying, hey, that person you hired at series A, they’ve never let an exit. If we’re gonna maximize the return on a sale, we want someone who’s led that exit. So again, I’m not saying that it can’t happen, but I’m talking probably some of the conversations that will happen behind closed doors usually replacements are made or usually someone who has been through that next trajectory is brought in on top of them.

Rohit Agarwal: Makes sense. Let’s change gears a little bit. In your view, how much value would you attribute to having a broader exposure in terms of industries or sub industries, let’s say within tech, someone has worked in SaaS company, e-commerce company, hardware company, and so on, versus just going deep. Someone who has been a SaaS finance operator for, you know, in three different companies, right? Are there any merits to one versus the other? And when you advise companies on their perspective, finance hires, is there a particular kind of persona that is more suited for a company versus the other? Maybe it’s stage, maybe it’s the particular industry that they operate in. Are there any nuances there?

Daniel Himple: Yeah, I would always advise going as broad as you can at the very beginning of your career and start to go narrow She gets the mid to the latest stage of your career now Most CFOs would argue that if you’re a very high class, best in class tech CFO, then you can add value to a FinTech, a SaaS, or a hardware company. But what I would say personally in terms of working very closely with founders and VCs who I pick up the remits from, they want someone who’s specialized in that space for the last 10 years. who’s led hardware companies. They don’t want to look at someone who’s worked with SaaS companies. So I’m not saying that you can’t do it, but in terms of being able to get to the top edge of those roles, you are better off to specialize in a specific area. Look, FinTech for example, there’s a huge amount of compliance and regulatory elements. your banking knowledge and financial services knowledge is going to need to be outstanding. You won’t have that if you’ve always worked in SaaS. In hardware, you’re going to have your manufacturing and your cost of goods sold and whatnot. In e-commerce, you’re going to need to know about your cost of acquisition costs, your distribution challenges, your retail partnerships. Now, there’s going to be many CFOs listening to this who will go, I could pick that all up within a matter of weeks. They could they absolutely could the challenge is that when a 80 million dollar company or looking to invest in 350k 400k in a CFO They’re not going to make that investment in someone who’s going to learn it They’re going to make that investment who someone who’s been there and done it four times The other thing is a CFO at a later stage company Typically the founders are hiring someone who’s going to know just as much or if not more about the industry and about the customers than they do. They’re also going to be hiring someone who can bring them in late stage industry specific investors within that specific field. They’re also going to be hiring someone who has a network of candidates from previous companies that they can bring into the business. or SaaS, you’re going to be able to add value to those elements more effectively, which makes you more marketable.

Rohit Agarwal: Interesting. Go broad at the early part of a career and then go narrow as you grow up. A counter to that, or more of a demystifying question is, how does recruiters look at resumes or people who have spent maybe two years at three, four, five different companies? And it seems like this guy is not stable at all, right? This guy keeps on changing companies every two years. how should you juggle the broad experience versus that kind of bias that people might have?

Daniel Himple: The crazy thing in this industry is two years has now seen as ten years. You know, going back to maybe our parents’ generations, most people might only work at two companies throughout their whole career. And it was maybe even one. But yeah, especially if you look at the startup landscape, within two years, a company will look completely different. And the needs of that company and the type of people that they need will also be completely different. And therefore, it’s natural for people to move on every two to three years. So what I would say is that two-year mark tends to be the year-on-stick potential. When people are moving on, After 18 months, that’s when it starts to get questioned. Now in this industry people will look past one brief stint, possibly two. But when people are making a move three times every 18 months, that can sometimes be questioned. Yeah, but it’s usually your two year mark that’s seen as some level of tenure, which still seems wild to me. I mean, I’ve been in the same business for 14 years now. But yeah, that’s what tends to be the view in this industry.

Rohit Agarwal: interesting. Let’s say there are five companies at all of them at a series C stage, right? Each one in a different segment of tech, one in SaaS, another

Daniel Himple: Thank

Rohit Agarwal: one

Daniel Himple: you.

Rohit Agarwal: in B2C e-commerce, third one, let’s say, FinTech, fourth one, hardware, fifth one, Web 3.0, right? How would you advise them on a CFO or a head of finance hire? And would your advice differ for each one of those companies?

Daniel Himple: Yeah, if I take Web3 at first, so over the last three, four years, we’ve seen an explosion in Web3, in crypto, in blockchain, and now AI. The challenge for those types of companies is very difficult to go out and find people with long track records within those industries because they don’t exist. You know, if you’re a web-free company looking for a CFO now, you can’t go and hire a CFO who’s worked in web-free for the last 10 years. So the advice that I make to those companies is let’s go and find someone who has a genuine passion for that industry. high-risk tolerance and can work in ambiguity because they are very fast and evolving industries where the whole landscape is completely changing day to day so if you’re looking for a role that’s going to give you consistency and security where you can do the same thing all the time that’s not the real industry for you so do they have a passion for that industry and can they work in ambiguity and crazy fast-paced change and so they’re going to be the right people. Going back to industries, yeah, I’ll refer back to the topic that we just discussed about trying to find people who have industry-specific knowledge. Where a CFO can bring the most amount of value is having just as much, if not more, industry-specific knowledge. than the founders themselves. They should be able to create strategic pathways that have customer-centric solutions. So if you’re a hardware company, you should be hiring someone who comes from extensive hardware manufacturing product-led backgrounds. So I’d always recommend that we look. we start of a search at someone who’s just been embedded within that specific vertical.

Compensation and contract terms#

Rohit Agarwal: Makes a ton of sense. Let’s talk about the elephant in the room, compensation. For tech companies, I would imagine stock is a large part of the compensation. At the early stages, anyways, cash is a little crunched. How, in today’s market, companies looking at compensation, both cash and stock, at different stages of head of finance hires.

Daniel Himple: Yes, so if we’re looking at a Series A, well your first in-house finance area, C Series A, we’re probably looking around 180 to 200K. the base and these are rough guides. I’m also talking about New York and the Bay Area, other locations with a lower cost of living will naturally be less. If we look at your big tech focused cities, yeah we’re probably looking around 180k to 200k first higher. There’s no bonus but your equity is going to be slightly higher. Within those stage companies you’re probably pushing towards a whole point of equity. Usually about 0.75 would be a fair basis. When you start to look at maybe your second finance hire, your VP of finance at a Series B company, we’re probably looking at 250k and half a point of equity. If it’s a late stage Series B and they’re hiring a CFO, we’re looking 300k to 350k and a whole point of equity. CFO at Series C. Obviously less equity because the valuation is going to be far higher. We’re working about 350k and that’s where your bonus starts to come in. Yeah, it’s usually about serious C when companies start to create a bonus scheme. Yeah. But as you touch upon there, Ohe, the wealth generator in any VC or P-back company that are looking to exit is always on the equity. You are never seeing big, huge high basis in these types of companies. Not at the CFO level anyway.

Rohit Agarwal: Got it. Makes a ton of sense. And then when we look at, let’s say, the next level, whether it’s the VP or the senior director level, what’s the measure for that?

Daniel Himple: Yeah, I mean at those types of levels it’s very hard to give exact ranges on equity because they will completely vary. But if I was to say, usually say it’s around series C where companies will start to build out the rest of their accounting function. The series B, series C. So say the CFO is making 300 to 350k, the controller is probably making 250k. you’ll probably have an FP&A director who’s making 200k it could be a VP of Finance and number two for the CFO and again they’re making about 250k yeah

Rohit Agarwal: makes a ton of sense. Have you seen a shift whether increasing or decreasing in terms of a trend on the equity portion over the last three four years?

Daniel Himple: It’s worked both ways. So one example is we’ve gone into more of a turbulent market. Candidates are naturally now starting to feel that there’s gonna be a less of a chance of an exit within the near future. So naturally, we’ll place more of an emphasis on cash comp. The counter side would be that companies now, a lot of companies, especially those who haven’t done 4 or 9A valuations are going to be having insanely high valuations. And therefore, you’re going to want a higher percentage at that valuation to feel that you’re going to get a return on your equity at the point of exit. So yeah, in this market of high evaluations, candidates want a higher percentage, but also at the same time will put a higher priority on cash, which means that they’re pushing for more cash and more equity.

Rohit Agarwal: Why not, right? Are there any other terms from a contract perspective that are table stakes for people, whether it’s double trigger or something else?

Daniel Himple: Sorry, I missed that.

Rohit Agarwal: Now I’m asking, are there any particular terms from a contract standpoint of a CFO that are pretty much table stakes from a private company perspective?

Daniel Himple: And love you. most companies in terms of their equity, they’ll offer a four year besting period with a one year cliff. That tends to be very industry standard. But no, other than that, none that I can particularly think of. The great thing about this market is the access to data. So all VCs all calculate a vast amount of data across every single… position and function within the business and pass their portfolio companies that data. So everyone in the industry kind of knows where each level or each branding of higher should be at or the percentiles that branding will be at.

Rohit Agarwal: Let’s say I have three different potential CFO roles that have been offered to me. Do you have any framework in terms of how should I decide on which one to take?

Daniel Himple: The CFOs who enjoy their role the most are the ones that have the best relationship with the founders. It’s not the ones that work for the most disruptive companies or take the biggest basis. It’s that relationship with the founders. So if I was a CFO and I had three offers, I’d want to go for dinner with each founder and try and figure out who do I have the best vibe of connection with? Who am I going to enjoy working with the most? try and speak to the rest of the executive team or I would try and back channel those founders and to try and figure out what are they like as leaders. I’ll be trying to question those founders and really trying to figure out do they see finance as a direct report or do they see finance as a strategic floor partner because again the best founders and the most successful founders are people that say hey I’m aware of my own limitations so I want to I want to bring in executives who can guide me on how to do this Whereas the worst founders are the ones that go. Hey, I’m a genius. This is my business I want to bring in direct reports and dictate to people So those are sort of things that you’re trying to figure out The other element is as we both know the big biggest wealth generator Is the equity So I would always, always ask to sign an NDA and go through financials and projections as much as you can. And do you believe in their exit plans? Do you believe in their projections? Are they in strong enough of a financial state where you believe that there is a chance of an exit and that your equity could be worth something? That’s far more important than a company might give an extra 20K on the base.

Salary negotiations#

Rohit Agarwal: Make sense. Can you debunk the taboo around salary negotiations?

Daniel Himple: Hahaha

Rohit Agarwal: What percentage of people do actually do it? And what is the range of increase in compensation packages that you have noticed that those people do actually go through a good salary negotiation are able to get?

Daniel Himple: If you asked me six, seven years ago when I was based in England, my answer would be no one negotiates their salary. What are you talking about? You’re crazy. That’s rude. If you asked me now I spent six years in America, I would say every single person negotiates their salary. I think you absolutely should, as we all know. The only time to negotiate your salary is at offer stage. it’s pretty common that you might not be able to talk about a pay increase for at least a year, usually two years. So you want to ensure that when you’re signing that offer, you’re getting the very best deal possible. And it’s very, very rare that a company will come in at best and sign up at their first offer. But for me the question isn’t whether or not you should negotiate. The question is do you know, do you have enough market knowledge to know your worth? Because otherwise, what are you negotiating? So I just mentioned that founders or startup companies will have this incredible access to data where they know what people are worth. Make sure you’ve got that same data. How big is your network? Do you regularly speak to people who are in higher positions? Do you speak to other CFOs? Do you speak, do you have a wide network of investors and VCs who can also share that data with you? Make sure you know your market worth where you feel that you should be. Yeah, you never wanna, yeah, the advice we give to candidatures, you never wanna over-negotiate. You don’t wanna try and… A classic example will sometimes be that a VP of Finance will negotiate themselves a CFO salary or a CFO title when they’re maybe not quite ready to be a CFO. Now the challenge there is their expectations or the deliverables that the company, the founders, and the investors want to achieve then skyrocket. They go from VP of Finance outcomes to CFO outcomes. yourself and you can often find yourself out of job in six to nine months so you also don’t want to over negotiate.

Rohit Agarwal: Do you have any anecdote in terms of the craziest salary negotiation argument that you have heard?

Daniel Himple: of I had… I mean look, fortunately no wild ones. The craziest one that I can think of was a… I won’t mention any names, but there was a CFO I placed last year who joined the company and the plan was that the company would exit in four years. So it was a four year time The CFO was desperate for 350k and the CEO wouldn’t budge. Gave him an extra.3% of equity rather than 50k and the company was actually acquired nine months after they joined. So made, I don’t wanna put any figures on it, but made a damn sight more than the extra 50k.

Rohit Agarwal: Wow, that is some negotiation that worked, that did not work in your favor, but then fortuitously did

Daniel Himple: Yeah,

Rohit Agarwal: at the end. Very interesting.

Daniel Himple: but the good thing about this in that my specific industry and the access to data No one’s coming in saying hey, I want 500. I want 600 because everyone knows what the ranges are and where the percentiles are Yeah There was an element where during the great resignation coming out of COVID, we started to see graduates or junior candidates just give themselves crazy high compensation expectations, but that’s pretty more the lower junior end of the market.

Rohit Agarwal: got it. Let’s shift gears a little bit and talk about technology. You referenced a little bit in terms of how it has influenced the recruiting process, but I want to see if you can elaborate a little bit, maybe on the qualification side or any other sort of processes that you go through in the recruitment.

Daniel Himple: Yeah, well in terms of qualifications and finance leaders, I wouldn’t say that a finance leader now needs any different qualifications, but a modern CFO should be able to make recommendations to the business for technology innovations that will help the business better perform. A modern CFO will be at the forefront of technology. I’m not just talking about accounting processes. That could be any technology in the business. will help you scale. For my own end… Yeah, again, going back to the points I mentioned earlier, every recruiter will say LinkedIn first. To try and go back to the days of imagining where we didn’t have to use LinkedIn was crazy. I cover the whole of the US. I’m based in New York, but my remits are right across the US. About 40% of the work that I do is in the Bay Area. So technology means that I can meet. multiple candidates and clients in the Bay Area throughout the day, you know, just by doing things like this. So that enables me to be far more efficient and have far better relationships in my job than ever before. There’s also now multiple AI tools that allow my candidate generation, my market mapping, my interview note-taking, my profile writing services. make my job far easier. And then these are things that have only really started to happen in the last six to nine months. Each and every day I’m seeing a different product or program that I’m trying to get involved with to make my job easier.

Rohit Agarwal: Make sense. Let’s unpack your work a little bit more. Tell us how does recruiting itself works? What is the typical process that you and your clients follow?

Daniel Himple: Yeah, okay. So And if I was to talk you from the start finish to a cfo hire with a starter The very first point of contact would be to go out and meet the founders and meet the investors And what we’re trying to decipher first and foremost is what is it we need? There’s many different types of cfo And and quite often a lot of founders. It’s a personal part of cfo So that so they’re not quite sure on the exact profile should be looking for. Do we need someone who’s got a really strong public accounting background who’s led an IPO? Do we need an M&A specialist? Do we need someone who can go out and raise your ton of capital? So the very first point of core do is go out and meet the founders and investors and I’ll show them multiple case studies at CFOs that we’ve placed at very similar stage companies within their industry. what’s worked well, what’s not worked well, and how we best run that process. And the first thing we do is we build out the perfect profile of what we should be seeking. We then build out a job description for them. We’ve got our interview process for them. And then from there, the first week of the search is what we call our market mapping. So we go out and we research the market. a series C hardware company that were looking to raise a series D&E and then go public in two years. What we would do is we’d map out every single hardware company in the US that have gone public in the last five years, every single hardware company that raised series D&E and we would go out and we’d identify every single VP of Finance or CFOs that have worked for those companies in a period of time. So that gives us our potential candidate pool. The next thing I’ll do is I will identify who I already know. Now the great thing for me is I’ve been in this industry for 14 years. I only ever recruit for CFOs. So you’ll tend to find that actually a huge portion of candidates within that market mapping are working with multiple locations. So I’ve already got a relationship there. The ones that I haven’t… that’s when we start a head-hunting approach for this. So I’ll directly approach those candidates, whether that be through LinkedIn, I’ll call them, I’ll email them, just to tell them about this amazing opportunity. So the first stage is generate an excitement, or generate an interest in a role, because the very best candidates in this market are gonna be those that are passive, those that are actively looking. So you can’t just call those people up and interview them, you have to say, wow, that are looking to go public in two years. These are the investors, here’s the founders. This is what they’re disrupting. This is why I’m excited. I really think you should take a look at this opportunity. And we try and generate their interest. We try and do the founders justice by selling their business. The second stage is we then interview those candidates. You know, once we’ve captured their interest, we want to ensure that they’re going to be right for the job in terms of technical abilities, cultural fit, soft skills, and so on. And then from there, we present the first short list. Yeah, we facilitate the interviews. We help with the job offer, and we help with the onboarding process.

Rohit Agarwal: Very cool. During your interviews, what makes a candidate stand out? Is it more of the softer things? Is it more of the technical things? What is it that you feel has clicked for you and something that has not clicked for you in terms of the personality that you feel like, hey, this is the right candidate for the CFO profile?

Daniel Himple: Yeah. For your technical skills, it tends to be when they’re able to demonstrate tangible outcomes that they’ve achieved in a business. They should be able to say, hey, I played a very important role in growing revenue from A to B. I led this implementation. I raised this fund. I scaled this team. There’s multiple examples of where they personally added value to a business, rather than just French numbers. In terms of personality traits, it’s always that level of humbleness. I think in a startup you have to be You have to be humble. Yeah, you have to be a people’s person You’re in a startup you might be only one of 60 people and you need to be able to work collaboratively and cross-functionally You’re going to speak into the board members and the CEO You’re also going to be speaking to the admin assistants and the EA’s and the more junior people unless you have a personality trait to the whole business, it’s very hard to work in a startup. So yeah, a person has the skills, humbleness and an ability to just to demonstrate exactly what they’ve added value. The other thing is, do they display a genuine enthusiasm and excitement in the business you speak about? If you don’t believe in the business model and the mission statement of a startup, there’s no benefit in you working there because Mean look 30 years ago, you know, even our parents generations You went and worked for Coca-Cola or tobacco and you got a big huge paycheck and you got great benefits And that was fine. Whereas nowadays, you know, especially the startup You’re not getting paid a huge amount of cash and it can be damn long hours There’s a lot of blood sweat and tears So you need to believe there’s gonna be an exit so you need to have a passion for what they’re trying to do And if you don’t It very rarely works

Resumes, interviews, and the hiring process#

Rohit Agarwal: Makes sense. Can we demystify resume? It seems to be the single most important document that can get you from one place to another to the third one to the fourth one. And nobody seems to have a great understanding of what is a really, really good resume. Can you share any of your insights?

Daniel Himple: The first thing is if we’re looking for lower level junior roles whereby you’re submitting a resume for a job advert, I can guarantee that job advert will receive 200 to 300 resumes. Which 99% won’t be relevant at all So most resumes in any industry at any level will get glanced at for about 10 seconds So, please do not worry about having war and peace across three or four different pages about all these incredible things You’ve done they’re gonna be looking at your job title the type of business you work with and then we’re gonna see hey in your roles Responsibilities have you been able to articulate where you’ve added value? That those are the key things Now fortunately with the evolution of LinkedIn and online profiles and whatnot, especially executive recruitment, we are now moving away from resumes. And really people on the LinkedIn profile, the LinkedIn profile should be an extension of their resume. Where we see a lot of pressure from resumes starting to come in is whereby companies want to ensure that the person within their interview process is serious about making a move. You will quite often have candidates that are engaged in a job interview process. just to test the waters, maybe to increase their own market knowledge, maybe they’re not really looking to make a move, but hey, they’ll poke their head out there. Now if you’ve got a business critical hire that you need to make within the next month, having those sorts of candidates within your interview process can be detrimental. So sometimes by saying, hey, I want a fully up-to-date two-page resume can help to filter out maybe candidates who aren’t as serious.

Rohit Agarwal: That’s a really good point. Yeah, I think especially in these kind of markets where everyone is phishing, just getting down in front of your laptop and committing those two hours to update your resume is a great testament. Makes sense.

Daniel Himple: Agreed.

Rohit Agarwal: you, whenever you’re recruiting sort of high level roles, whether it’s finance or anyone else, right? I’m sure there are some kind of common challenges that you face, right? Maybe it’s personas, maybe it’s expectations, maybe it’s something else, right? Can you share a story of a particularly challenging recruiting experience that you have had?

Daniel Himple: Last year I worked very closely with a series D FinTech company and they were looking to hire their first CFO and the plan was that they were hoping to go public within two years, the holy grail. And to their credit one of the things that they had learned or read was that a lot of tech companies or a lot of companies build out these crazy long interview processes whereby there’s 10, 11, 12 stages and you lose Canada’s interests and Canada’s get frustrated and they withdraw. And this is a business critical hire that they needed to make within two months. So they said, hey, we’re going to go the opposite way and we’re going to have just a free stage interview process and then we’re going to extend an offer. before me and they’ve been using them for four months and it hadn’t worked out and they just kept they had extended four offers and candidates kept rejecting that and they couldn’t fathom why. And the advice and guidance that I gave them was they weren’t doing enough to sell the business or capture the interest of a CFO. Now a CFO might only change, you might only have three CFO roles in your whole career. You never want to make the wrong move as a CFO because one short stint of a CFO, people always say, hey, what happened there? That was an executive level role and you’re only there for six months. So you… professionals tend to be risk-averse. So you’re going to want to do as much due diligence as possible. So most CFOs aren’t going to take a leap of faith after only three conversations. So I actually advised that we went the other way and we extended the interview process. We didn’t have any crazy or unnecessary task or meetings but it was the first interview was an informal call with the CEO. Previously they had the first conversation with one of their talent It was more of a generic. What conversation are you looking for? Where do you live? How can you be in the office? That’s my job. I do that as a recruiter. That’s not gonna capture anyone’s interest. The very first call should be directed to the CEO. The CEO should say, hey, here’s my vision for the company. Here’s my vision for the role of CFO. This is how I like to partner with CFO. This is where a CFO can have value. Then from the first conversation, you’re captured and exsigned them. From then on, meeting with the rest of the executives in the business, that every executive should be guided that, hey, not only are you here to interview, but you’re also here to sell the company. If anyone isn’t suitable, let’s filter them out, but let’s ensure that everyone’s walking away from each conversation going, wow, this is a great company to work for. Every single conversation you’re on interview process should be twofold, interviewing and selling. And then the final point, prior to working with me, out a case study at the second stage. So candidates were having one conversation and then having to do a case study and they were saying hey I’m happy in my role I’ve only had one conversation why am I going to do a case study? If you’re going to do a case study as an interview process do it right at the end of the process when you’ve done everything you can to capture the candidate’s excitement and for them to go wow this is brilliant I want to work with this company of course off on best timing of a case study.

Rohit Agarwal: I’m a huge fan of doing a case study or any kind of practical assignment for any single hire. Tell us how do you advise your clients in terms of approaching a practical assignment and an existing CFO moving from one company to another company? It’s sort of given that they have the technical chops, right? And so what exactly are you trying to decipher? from that practical assignment.

Daniel Himple: Yeah. Yeah, exactly. I personally would never give a CFO a technical example, a technical assessment. If someone’s been a CFO for the last five years, I think you’re going to be little of them if you start asking them to build out a model or build out a forecast. The other advice I give is you don’t want to implement a case study too early. The best candidates in this market are always those that are happy in their job and passing. So if you have an open-ended conversation with a new company and then they ask you to spend three hours preparing a case study when you’re not even looking, you’re going to withdraw for the process. So you want to do it towards the end of the process. Typically, a great case study to have a CFO do is get them to build out and present how they would approach their first 90 days within the role. And that just helps to assess where they’re going to add value, how well do they know your industry, how well do they know how to scale, and do they think strategically.

Rohit Agarwal: Very cool. What advice would you give to someone aspiring to become a CFO?

Daniel Himple: Um. build out your network and go and work for World Class CFO. So I think we go back to what I mentioned right at the beginning, I would try and get as wide a breadth of experience as possible at the very beginning of your career and try and touch on multiple different industries because who knows where your passions lie. What I would then do is constantly, constantly be building out your network, whether that be VCs, other finance professionals, founders, Yeah, that’s where your knowledge and data is going to come from. But the most important thing is go and do whatever you can to work for a world class CFO. The best CFOs in this market have always worked for the best CFOs. To try and get that mentorship is fantastic. And CFOs… they tend to look after one another. Most great CFOs that I work with will still be mentoring four or five of their ex-colleagues and we’ll still pass them around and recommend them and interpret processes.

Rohit Agarwal: Make sense. Last question before we move into the lightning round. What are your top three predictions for 2024?

Daniel Himple: I think we’re gonna see a continued focus on profitability. That’s. grow for all costs mentality is gone out the window. Very simplistically, it’s now more expensive to raise money, more expensive to borrow money. And therefore, companies are already continuing to extend runways and focus on profitability. I think looking at my data, we’re going to see an increased demand in finance leaders. Again, I’m not an economist, I’ll never make any predictions as to what’s going to happen in the economy, but my data suggests that confidence in the job market and confidence in hiring finance leaders is very quickly returning. And I think we’ll continue to see increased demand in companies hiring start-up leaders, finance leaders, even earlier.