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The pragmatic CFO: How to approach the finance job market in 2024

Andrew Waters
Andrew Waters Co-Founder at Zanda

A CFO is the most important hire any Founder or CEO makes, and probably ranks second just behind CEO hires from a PE & VC investor perspective. I am not sure if we are on CFO 3.0 or 4.0 currently, but it certainly feels that CFO requirements are shifting gradually from the CFO profile that we have been asked to find in the previous 18 months.

Truly, I believe there has never been a time when the positive impact that a CFO can bring has been greater. The market is constantly evolving and businesses need impactful CFOs to help steer the ship in the right direction.  

In this article, I’ve expressed my view on the state of the CFO job market, including current trends from founders and investors hiring their next CFO. As a CFO, you’ll know how to land the role you really desire in this current market. 

About the author

Andrew Waters is a Co-Founder at Zanda, a UK & US based executive recruitment service that supports tech companies looking to build out their finance function with ambitious CFOs and Senior Finance Leaders. Zanda's speciality lies in supporting the learning and development of up and coming CFOs through numerous programmes, which in turn provides their clients with highly-skilled, industry ready candidates. 

Zanda is known for finding transformative CFOs for Series A to pre-IPO companies, in industries ranging from B2B SaaS, FinTech, HealthTech, e-commerce, marketplaces and CleanTech. 

Andrew has been dedicated to helping founders grow their teams and finance professionals land their dream roles for the last 20 years and is ingrained in the startup world as an active angel investor, advisor, and business mentor.

The state of the CFO job market in early 2024

By my subjective estimation, the market is 25-30% more buoyant than this time last year. There’s been a marked improvement in founder and investor appetite to hire new CFOs at the beginning of 2024.

Some of that is as a result of the businesses and their investors. For example in the last 6-12 months, we’ve seen a lot of movement particularly in the private equity space, as private equity firms look to shake up the C-suite leadership team in underperforming businesses. 

Among these C-suite roles, the CFO position sees the most change, resulting in a high demand for interim CFOs as permanent searches advance. 

But there are also a lot of CFOs in PE and VC backed businesses, who struggle to see their equity being worth what they’d hoped it would be at this point, and think it will be another four or five years until they see a return. Combine that with 18 months of cutting costs, managing runway and continual restructures, and you have a true representation of the weight CFOs are currently carrying in this market.

Most tech CFOs are entrepreneurial and ambitious, and want to say “yes” to the right strategic growth opportunities. But for the last 12-18 months, all those decisions around capital allocation have been negative, as businesses look to survive, extend runway or drive towards profitability. Most tech CFOs want to have that commercial, strategic aspect to their role. So if they’re not getting that, they’re naturally looking for new opportunities. 

What companies are looking for

Given the significant, society-altering events of recent years, it’s no surprise that companies’ expectations and requirements from CFOs have changed radically. To highlight how the CFO role has evolved, we want to share a  few different CFO mandates, we’re received in the last 5-10 years: 

  • Pre-Covid: Maintain business discipline, look for growth opportunities and efficiencies, and raise funds when the time is right. Build enterprise value and target exit opportunities when available.

  • During the pandemic: Keep the lights on, digitize processes and ensure that everything works remotely. 

  • Late 2020-2021: Raise as much money as possible, as quickly as possible, spend as quickly as possible and scale at all costs. 

  • 2022-2023: Drive towards profitability, extend the runway, and cut costs.

  • 2024-: Similar to the pre-Covid period, where requirements were for CFOs to raise capital when the timing and valuation make sense, and for there to be a  focus in building great businesses that are ambitious again, but targeting sustainable growth.  

This year, we’re seeing more appetite from founders to hire a CFO who meet the moment. Companies are looking for a measured, entrepreneurial, but pragmatic CFO. They want someone who can see opportunities and raise funds to invest in them, but also deeply scrutinize the company’s capital allocation and apply good metrics. 

Our clients are requesting CFOs who are  constantly reviewing growth levers and pushing the right buttons. These include M&A, international expansion, product development, sales and marketing growth. Which of those avenues hit the metrics we want, whether that’s top-line growth, margin, or visibility?

A lot of businesses are focused on sustainable, profitable growth, and just want to keep moving in the right direction. Going into the next few years, businesses will have to accept down rounds, but that is part of a longer-term view for the business, as they look towards profitability and maximising enterprise value. 

Of course, this is all fluid. In 12 months’ time, I wouldn’t be surprised if we were talking about raising major capital again. But as it stands today, companies are looking for pragmatic, entrepreneurial CFOs who are driven by responsible growth and sensible capital allocation. 

That hopefully means real chances for enjoyment and growth, but also a lot of pressure. It’s an amazing job that can transform a company, especially in tech. But it has never carried more weight. 

The CFO hiring process in 2024

A great hiring process is a journey for both sides. It comes with many touchpoints: CEO, Chief People Officer, other C-suite peers, Chairperson and investors. 

During the interview process we encourage the candidate to communicate as much as possible with the 5-6 main stakeholders that they will interact with on a day to day basis, through different forms of communication: Zoom, emails, voice notes, and ideally in-person sessions. 

Both sides need to see how different forms of communication feels from a fit perspective, so it is useful to explore a variety, such as relaxed coffee chats, spontaneous interactions on the role and its deliverables, and more pressurized competency or presentation sessions.

What we’re really testing is how well the candidate and those stakeholders communicate with each other in this modern, hybrid environment. As interactions flow across the different channels, you get a sense of how well the candidate fits in the company, and vice versa.

This essential process can take a number of weeks or even months. But it’s the best way to maximize comfort and ensure that the right CFO is being selected for this business. Plus, candidates get to see some live data points on what they’re walking into. 

The main challenge in any CFO role is misalignment. If a CFO begins a new role with a false idea of the revenue and EBITDA - or thinking they have 18 months’ runway when they really have six - that’s a real issue. 

A great way to avoid misalignment is to run a case study exercise, which should expose the candidate to some live data and it might well be that what they see is worse than they thought, but if they are still up for the challenge, at least they are prepared and have a realistic expectation going into the role. The important thing is that the CEO, investors and the CFO are all aware of the realistic  situation as it stands, and agree on the way forward. 

As a candidate in this position, be candid with the founder and see how they react. Are they delusional or in denial? Or are they already thinking about how to respond to a messy situation, and are you prepared to go there with them? 

That mutual understanding is the gel that glues a CFO and CEO together. 

Current trends in CFO hiring

The following CFO skills & experiences have always been relevant in the hiring process but we’re seeing they are more relevant today than in previous years. 

1. Building a lean finance function

There’s less budget across the business, but particularly for internal operations. CFOs  may have to accept fewer resources than they’d like to build a world-class finance function. Which may force them to be more hands-on in things like reporting, analysis and operations. 

Meanwhile, the high-level expectations are still there, so utilise the best technologies, outsourced providers and optimized finance structures to make an impact quickly 

2. Renewed enthusiasm for mergers & acquisitions (M&A)

Startups in certain segments simply won’t be able to raise capital but they may have assets, customers, or teams that can be bolted together or acquired by a larger business, or a competitor with a solid balance sheet.

M&A has grown a lot in the last 6 months, and I think that will only continue this year, particularly in the PE space. If CFOs can highlight their experience on either side of the M&A equation, it’s a huge advantage.

3. Diplomacy in emotional conversations

We don’t always think of CFOs as needing to be emotionally sensitive, but companies are going through a range of situations they were hoping to never face, with opinions and sensitivity from all sides. 

CFOs must navigate founders' emotional reactions to down rounds, as well as manage investors' diverse emotional responses and varying timelines. Investors who have entered at different funding rounds may perceive fundraising, exits, or M&A situations in distinct ways.

CFOs need to take the emotions out of these situations to make the right commercial decisions and position the company for the long term. They need empathy, communication skills, and laser focus to see past sentimentality.

4. Decoding company values

Clear, strong company values will always be important. CFOs need to understand, align and be able to lead with these in an authentic way.  

Assess conversations with stakeholders. Do they embody the stated company values? Are they who they say they are? These frequent discussions help you truly understand and embody the values, and then hopefully lets you freely operate in accordance with them.

The number one issue for new CFOs is a disconnect between the company they thought they were joining, and the one they found upon arrival.

5. Seeing both sides in action

As mentioned we’re seeing case studies used in the vast majority of hiring processes. 3-4 years ago, maybe a quarter of processes involved this, whereas today it’s more like three quarters. 

These don’t have to be too heavy. A light-touch example we’ve seen is a 100-day plan presentation. The more detailed version involves viewing and analyzing a data room or business statements and suggesting changes to the board. 

What I like about these case studies is that both sides get to see each other in action. As the candidate, you obviously get to see some live data and envision yourself in the role, and be able to honestly challenge what you see. You also get to see how the other side reacts. Do the founders and investors take suggestions in good faith? Will there be a strong working partnership to achieve the longer term business objectives together?

Cautious optimism for 2024

After 18 months of budget cuts, arduous fundraising efforts, hard choices and restructures, this year may be just what CFOs need. Hopefully, 2024 will give CFOs the chance to think strategically about real growth and to help lead businesses towards a brighter future. 

That’s certainly what founders and investors are thinking. They’re hiring CFOs who combine a sensible, cash-conscious approach with a clear growth mindset

If you’re looking for your next role, show how you can both mitigate risk and spot opportunities; pump the brakes and strike while the iron is hot. 

The best CFOs advance their firm’s growth and marketplace position by identifying the key constraints holding the company back, and use finance as a strategic tool to make the best medium-long term decisions.

2024 is the year of the entrepreneurial yet pragmatic CFO

And that’s an exciting place to be.

If you want to stay ahead in the competitive landscape of finance leadership roles within startups, read Zanda’s 2024 Compensation and Equity benchmarking guide. It’s built on 1,000s of data points from CFOs & finance leaders in the UK, and jam-packed full of insights from industry leaders and VC experts.