Finance teams are the heart of every business. So it should come as no surprise that it’s critical to hire the right people for this function — especially in the early days of fast-growing SaaS startups.

But building a team, as every finance leader knows, is a challenging endeavor. To bring more clarity to this process, we interviewed several finance leaders to understand their approach to hiring early finance teams. We’ll explore some of their best advice in this post.

Phase 1: Planning

The first phase of building a team is to make a plan. In other words, what is your vision for this early team? To answer this question, Ruth Ku, CFO at Entrepreneurs for Global Change and former CFO Advisor at Ellevest, says the first step is to assess where the business is at — especially if you’re new to the role.

“I always take the first couple of months to get a sense of what the business needs are in terms of bookkeeping, reporting, financial modeling, KPIs, etc. I also take time to get to know the founders and the team — and to really understand at a higher level what the goals of the business are because that’s going to influence what type of team we need.”

That big picture will then inform your hiring plan. For instance, if the company isn’t earning any revenue yet, all of your finance needs are likely expense related. So perhaps your first hire should be someone who can review all those transactions. Or, if the volume is still relatively small, maybe it makes more sense to outsource this work or hire someone part-time until you can justify bringing someone on full time.

Phase 2: Sourcing

Once you know which role you want to fill, it’s time to start sourcing potential candidates. This then raises the question of: who is the right person for this role? Here are some of the ways that the finance leaders we talked to think about personas:

• Experience. Jeff Epstein, Operating Partner at Bessemer Venture Partners and former CFO of Oracle, tends to look at candidates through the lens of experience. “Do you hire an experienced person who can already do what you need them to do? Or do you hire someone who is overqualified? This is someone who's almost bored by their current job because, in a year or two, you know the company will be two to three times bigger and you need to hire ahead. Or do you hire someone younger and inexperienced, but is really ambitious? There's no right answer, and I think most well-run companies probably have a combination of all three. But if you're a fast-growing startup and you have the capital, I generally recommend hiring ahead.”
  
• Mindset. Many finance leaders tend to hire people who come from certain backgrounds or industries. Jenny Bloom, fractional CFO and former CFO of MailChimp and Zapier, doesn’t care as much about those credentials. She’s personally hired people from across all industries and backgrounds, from retail to interior design to ecommerce. Instead, she focuses on mindset. “I just want to hire someone who knows how to get things done — especially in a remote world. What I want to know is: if nobody is around or your teammates are asleep because you’re in different time zones, what are you going to do if you run into a problem? How are you going to solve that? How are you going to make sure the work still gets done?”
  
• Cultural proficiency. With more and more SaaS companies going cross-border, another important hiring consideration is international experience. This is something that Doris Yeung, CFO at Tradeteq and former Group Controller of Okta, thinks about in the hiring process. “At Tradeteq, we operate on a global stage. So having people who understand how to work across different cultures and have that international perspective is very critical to me.”
  

Phase 3: Interviewing

Every company’s interviewing process will look different. But Myoung Kang, Interim CFO at MotherDuck and former Head of Finance at Notion, has a framework called the 3 C’s — which stand for competency, commitment, and culture — that may be helpful for teams to keep in mind while talking to candidates.

• Competency. This refers to the skillset of the candidate. In other words, do they have relevant experiences that will translate well to the role you’re hiring for?
  
• Commitment. This is a signal of how excited and engaged a candidate is in your company. Hiring is such a resource intensive process that you want to make sure the person you bring on is committed to staying for a long time.
  
• Culture. “Someone can be highly competent and highly committed and come from a Big Four, but that doesn’t necessarily mean they’ll be successful at a startup,” says Kang. That’s why filtering for candidates who either have startup experience or are excited about the idea of working in a fast-paced, high-growth environment, is important.

To surface where candidates fall across the 3 Cs, it’s important to ask the right questions during the interview. Below are a few go-to questions of the finance leaders we spoke to:

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Phase 4: Scaling

At startups, scaling teams is a tricky business. Scale too slow, and your team may get burned out from being overworked. Scale too fast, and you have team members being underutilized. So how do you strike that balance and ensure you have enough people on the team at a given time?

One framework that Epstein uses is the 5% rule: “I’ve found that, at most companies, about 5% of the total headcount work in finance. So if you have a company with 50 employees, you probably have two or three people in finance. You have a company with 100 employees, you probably have five in finance. When I was the CFO of Oracle and we had 100,000 people at the company, we had around 5,000 in finance.”

Other finance leaders keep an eye out for hiring signals. Some examples include:

• Minor cracks in the process. Jeremy Lambertsen, VP of Finance at Alyce, says he knows it’s time to hire another team member when he sees small things start to break down. “When you don’t have enough people, the speed of decision making tends to break down first. Your close process is too slow, your accounts receivables are dated, your payables are getting paid too fast. So you're losing on both sides of cash flow.”
  
• Cost. Another signal for Lambertsen is cost. “As soon as the invoice I get from a firm that we’re outsourcing work to is equal to or greater than the cost of a full-time person, then I know it’s time to hire.”
  
• Painful vacations. For Kang, she notices the pain points most when a team member goes on vacation: “When somebody goes on vacation and it's a complete disaster, that’s a clear sign we need another person on the team.”

Finally, Yeung offers advice to help teams scale smoothly. “Make sure to put everyone’s responsibilities on paper. At early-stage startups, almost everyone will have to wear a number of hats, so it’s inevitable that there will be overlap. To scale efficiently, every team member needs to have a clearly defined scope of responsibilities and understand where to engage each other other but also help support each other when needed.”

Building an early finance team can be an intensive, but rewarding process. Use these best practices from seasoned finance leaders to get your hiring process started on the right foot. If you work at a high-growth SaaS startup and are looking for a tool that can grow with your team, visit www.rillet.com and request a demo with a product expert today.