As more and more startups receive funding, there’s more and more of a need for those startups to hire CFOs. A lot of these hires happen early on in the lives of startups. As a result, CFOs are taking on more than the typical job description for the role. There’s no doubt that CFOs are a growth catalyst for growing startups. According to PitchBook, 71 percent of 180 unicorns in the U.S. had CFOs as of April 17, and 64% of startups with valuations between $5M and $1B had CFOs. But what the role entails isn’t as black and white.
CFO is a multi-faceted role
It’s clear that early-stage startups seeking or managing new funding can benefit from the expertise of a financial chief. But in today’s startups, these CFOs are taking on more than just finances. They’re fulfilling necessary job functions like HR, legal, and even IT. This is due to more than just scrappiness or taking full advantage of resources. Startup founders and executives today know that they need CFOs who can have a hand in the company’s growth. This means overseeing efforts that are not directly tied to financials.
While the expanding role of the CFO is especially prevalent in startups, we’re seeing it happen in larger companies as well. There is an increasing focus for companies of all sizes on finance’s role in how companies operate. As a result, CFOs are becoming more involved where finances meet strategy and generally have more of a pull in their companies’ trajectories.
More responsibility means more risk
Taking all of these new responsibilities for CFOs into account, they are often stretched pretty thin. Overseeing many different functions in a company combined with potential lack of expertise in some of those areas has created substantial risk for today’s CFOs. Imagine making an error or oversight in your day-to-day work tasks and being personally held legally liable for it. It sounds unlikely, but this is becoming more and more of a reality for modern CFOs. The expanding role of CFO means they are open to the risk of personal legal liability due to oversight or inadvertent noncompliance.
Our whitepaper, “The top 5 operational risks modern CFOs face day to day,” outlines the ways that startup CFOs are more vulnerable now than ever due to increasing responsibilities parallel to increasing compliance obligations.
What operational risks do CFOs face?Download the Whitepaper
All of this can sound pretty scary. But there are ways that CFOs can mitigate the risks that are becoming more inherent to the role. By sending legal and financial information with a secure document sharing solution like DocSend, CFOs can maintain the level of security and compliance they need to manage all of their responsibilities effectively.
To take a deep dive into the risks that CFOs face in day-to-day operations and the various steps they can take to minimize these risks, download our whitepaper.