How to Hire a CFO

Your startup needs a CFO with relevant experience—and the ability to strengthen your company culture.
By M13 Team

Last Updated: January 19, 2021

Published: January 16, 2021


Every established business has key high-level executives who are hired to drive operations and help grow and scale the business. The common chief executive-level positions include Chief Executive Officer (CEO), Chief Operating Officer (COO), Chief Information Officer (CIO), Chief Marketing Officer (CMO), and Chief Financial Officer (CFO). Each position works together to ensure the company’s success.

The CFO is the chief-level executive that is in charge of the financial health and all financial planning for a business. Typically a CFO manages a team that attains financial data and a team that creates forecasting models. With this data in hand, a CFO can make recommendations for financial directions or actions that need to take place within the business. These findings are presented to either the CEO or the board of directors. 

Based on the CFO’s recommendations and findings, the executive team is able to make key decisions that can have significant impacts on the trajectory of the business. 

Because a CFO is directly involved in the financial decisions and planning for a business, it is incredibly important to find a CFO that has immense knowledge of corporate finance and understands the ins and outs of the business. 

Below are some recommendations for how to select the right CFO.

Long-standing financial experience

The CFO has the imperative task of ensuring the startup’s financials are in order and the company can be profitable, so having extensive experience within the financial sector is key. When hiring a CFO, it is not always about finding an individual who has been a prior CFO. Many individuals who have extensive corporate finance experience make a great CFO and are typically more in tune with the numbers and methodologies behind finance, compared to CFOs who have been in the position for years.

Long-standing financial experience is an important factor because, with a long history, these individuals will have experience with different financial situations and will know how they were dealt with. 

If for example, a finance analyst was working within a business that faced a harsh downswing in sales and was able to aid in reestablishing these numbers, this experience is extremely valuable for any business. 

When in the process of hiring, be sure to ask about relevant experiences that the candidates have had in dealing with financial blips and how they worked to rectify them. 

Having good problem-solving skills and having the ability to quickly adapt to changes are qualities that these kinds of experiences facilitate and are important skills that a CFO should hold. 

Pro tip

When in the process of hiring, be sure to ask about relevant experiences that the candidates have had in dealing with financial blips and how they worked to rectify them. 

Holds a diversity of roles in finance

When hiring a CFO, it is advisable to find an individual who has served in a multitude of different roles within the finance department. This is something to look for in a prospective CFO because it is crucial to have a general understanding of reporting structure, ground-level operations in the department, and how financial statements are assembled is crucial.

Rather than having to make an additional hire, simply hiring a CFO who is financially competent in all aspects of a business's finances is ideal. These individuals do not need to be a master of all financial positions, however, they should be familiar with who does what, and generally how each position plays into the bigger picture. A CFO is better able to understand the financial department as a whole if they have held a variety of positions within the field. 

Direct experience with data, reporting, and analytics can prove to make a CFO candidate an invaluable addition to the business. 

Specific expertise in product type

One quality that often gets overlooked in the hiring process of a CFO is the direct financial experience based on a business's type of product. This may seem trivial, but it truly is important as not all businesses’ financial structures are the same.

Service-based businesses do not have the same concerns that an online retailer has when considering finances and tracked metrics. Finding a CFO who has relevant financial experience with the business model will ensure you are getting a professional who is knowledgeable of how the specific finances should look and are knowledgeable about key financial indicators. 

A CFO who meets this requirement is better able to provide valuable financial insight with expertise in a similar product or service. 

Shares values of the company

Every business carries a unique set of values and a unique culture. These factors can ultimately impact how the business runs and the satisfaction of its employees. Finding a CFO with values that align with the values of the company is something that is paramount. A CFO is a highly trusted position as poor finances could quickly result in the IRS or other financial entities knocking at the door. Finding a CFO who genuinely embraces the business’s message and culture will ensure that they will do their best to propel the business forward. 

The CFO is also the head of the financial department. As the lead, the CFO needs to set an example and expectations for their reports to look to for guidance. When you hire a CFO who embraces the culture and values of the business, you are better able to reach the same message to the financial employees who are below the CFO. In this manner, the CFO can have a large cultural impact on the entire department.

Choosing the wrong CFO who has a poor concept of the company's message and culture can leave negative lasting effects on the business. A recent study found that the more self-centered and less team-centric the CFO, the longer it took them to identify losses. This study illustrates the importance of finding a CFO who not only looks good on paper but one that meshes well with the business’s culture and values.

When you hire a CFO who embraces the culture and values of the business, you are better able to reach the same message to the financial employees who are below the CFO.

M13 Team

Knowledge of business analytics

Business analytics is continually becoming a more important aspect of financial advising for businesses, and having knowledge of these methodologies can make a potential CFO a much more effective member of the executive team. But what is business analytics, and why is it important for a CFO to know what it is?

According to Harvard Business School, there are three ways that business analytics work. These include interpretation of historical data, the use of past data to predict future outcomes, and the analysis of the effectiveness of decisions. 

Ultimately, business analytics offers a business a department that is dedicated to quantitative reasoning to support decision-making. Without the utilization of hard numbers, all financial decisions would be guesswork and ill-informed. Hiring a CFO who values the hard data to drive decision-making will be much more effective than one who makes decisions on a hunch.

Nearly all business fluctuations can be predicted to some extent thanks to an analytics team. The team itself looks at not only financial data but key metrics that can indicate how a business is growing and how it is likely to do in the future. Metrics like customer acquisition rate are not inherently thought of as a financial entity but in reality, this rate can provide vital insight into how a new ad campaign is doing or how receptive customers are to a change. 

Having a CFO who is aware of the workings of analytics and metrics will make them a much more valuable member of the executive team. A CFO that believes in and appreciates the impotence of data-based decision-making will be the most effective and provide the most value to a company. 

Knowledge of the internal workings of the business

Before setting out on a search for candidates elsewhere, consider looking internally for prospective CFOs. Internal candidates who have deep financial expertise and experience have a lot to offer, from already knowing the team to also knowing what needs to be done. Starting out with an internal search to fill a CFO position can be often the best option for many reasons. 

The first of which is that internal candidates are already fully aware of the reporting structure, what services or products are being sold, the details of the inner workings of the business, as well as having existing relationships with the team. Having a background and perspective of what goes on behind the scenes could allow these individuals to enact changes that could drastically improve the efficiency of the financial department. This thought process is much like that of giving an employee a promotion. 

Promotions offer individuals upward mobility in the company but also allow an individual to manage and enact changes based upon their experience in the lower-level position. External hires will most likely be unaware of any inefficiencies and will continue to work with what they have, whereas internal hires can make a significant impact by easily and quickly solving for those inefficiencies

The second reason to begin a search with internal hires is that they typically are willing to put more effort into the company. Long-standing employees typically stick around because they have job satisfaction and feel that their work is fulfilling. 

By promoting a financial executive to the position of CFO, a business typically does not need to worry that the individual is there to clock in and out with minimal effort. For those employees who climb their way to the top, they have a sense of pride and reputation they have built. To keep this reputation, an internally promoted individual will deliver and put forth the effort to prove they were a worthwhile addition to the chief executive team. 


Finding a Chief Financial Officer is much like choosing a typical candidate to hire for any other position, but typically the stakes are much higher. A CFO holds many essential roles within a business, and it is important to find an individual that fits the needs of the business. 

When hiring a CFO, it is important to ensure that they have:


Relevant experience


Deep knowledge of the financial processes


The ability to mesh well with the culture and values of the company

It is very difficult to find the perfect hire and to find an individual who meets all of the standards, but setting these high hiring standards will make life much easier later on. 

Hiring a CFO can be a complex process and ensuring that the right person is selected for the position is a decision that should be taken seriously. A CFO is an executive insight into how the business is doing financially.

By conducting a thorough hiring process, a business is better able to ensure that they are choosing the right candidate who will continue to allow the business to thrive and make smart financial moves and decisions. 

Resources we love

Business Analytics: What It Is and Why It’s Important [Harvard Business School]

Study Links CFO Narcissism, Poor Accounting Choices [Olin Business School]

Tax Execs: IRS Scrutiny Bad for Business []