ADVICE NEEDED: Financial Analyst offered a CFO position

As some of you remember, I joined this forum last year and made a decision to transfer out of PWM and into corporate finance. I was lucky enough to get a job doing corporate FP&A and business analytics at a large company. Given my education level and previous career experience, I’ve moved pretty fast in terms of skills and responsibilities. Some people think I should get promoted to a senior position even though I technically only have 1 year of experience.

A close friend has been working on his start-up for 3 years straight now. It has developed a clearly-defined service, has paying customers (some of them are Fortune 500s), and 12 paid employees at. To put things in perspective, it raised $3M in funding, has real recurring revenues, was selected by Y Combinator, and the last funding round supports an 8-digit valuation.

He called me last month to ask me to be the company’s “CFO”. I told him that a real CFO needs good accounting knowledge, better understanding of the ERP systems, and that it would take me 5 years to get there.

His response was that right this second, he just needs someone simply more qualified than himself to run the bookkeeping, invoicing, payroll, bank reconciliations for 3 hours a weekend. His hope was that over the next 2 months, I’d get more familiar with the company and the start-up would need a full-time CFO, and I’d make the transition then. Of course I agreed to that, since my skills will grow in tandem with the company’s needs. The only thing I asked for in return right now was reimbursements on CPA courses and work necessities (computers, bus tickets etc).

  1. This is a chance to build a company from the ground up with good systems and good automation. Where do I begin with that? Right now, the start-up is supposed to be using Quickbooks.

  2. We agreed to discuss compensation after I figured out how much value I could bring to the table. Obviously, we’re both thinking an equity stake, maybe with a 4-year vesting schedule. What would be an appropriate %, or how would I arrive at a number?

  3. What kind of advisors should I be capitalizing upon? This might be related to #1

  4. What is the most dangerous/difficult thing about being a CFO of a company with 10-50M in annual revenue?

  5. Assuming the end-game is to be the CFO of the start-up, which might have $5M or even $10M in recurring revenue in 2 years, which option is better for my next 24 months:

  • Being a senior financial analyst at a disorganized company (horrible technology and systems) where I have close contact with the CFO and multiple VP’s, and direct involvement with reports to our shareholders, and the oppurtunity to train 2 other analysts
  • Being a bottom-rank financial analyst at a Fortune 500 company that probably won’t let me have those responsibilities, but will expose me to real systems like Hyperion, Essbase, Peoplesoft, SAP etc

I’m not so sure if there is a blueprint man. You have to decide what you want to do and go with it.

I don’t get the vibe we have many people with the experience that could answer your questions about the technical aspects of being a CFO.