We had a lot of experience with Carta and put a lot of value on having the equity ledger on Carta from day one. Initially not using them for either 409a or Board resolutions. So just need the basic package for about six months and plan to eventually move to them for 409a valuations.
CRM: HubSpot
Cost: Their startup package, about $1,000 for the year.
Typically, companies will go with Salesforce.com, but one of our investors had a lot of experience using HubSpot for startups and our early workflows for our CRM were basic enough where the tool itself wasn't as important as building a solid foundation.
HRIS: Gusto
Cost: $1,600/year.
We wanted to use a lightweight and basic HRIS at this stage that could scale for our early planning and members of the team had a positive experience with Gusto. In addition, Gusto was able to issue 1099s for any contractors we used and can integrate our payroll and benefits administration in all of the states we were planning on being in for the foreseeable future.
Calendar Management: Calendly
Cost: Free or $10/month/user for more features
This has solid integrations and ease of use. We needed to set up a lot of calendar events in the early days as we had to do 100s of market interviews and found Calendly helpful as it integrated with Outlook and Zoom.
Payroll: Gusto
Part of the HRIS.
401k Provider: Guideline
Cost: About $1k. $39/month + $8/PartEmployee per month
We liked Guideline's approach of no AUM fee and really just a place to buy Index funds. This approach minimizes the overall expense ratio of the plan and fits well for what we wanted in a 401k. If we had not already funded the business, we likely would have waited before spending money on this benefit. It also integrated seamlessly with Gusto.
Insurance Provider: Vouch
They had a really easy workflow to get the basic General, EPL, E&O, and D&O. The price was less than what we had thought it would cost to get the basic insurances needed for our operations. Very effective for a startup.
Key Processes Established
Documents to track
Document storage
Domains and aliases
Purchasing and asset management
Corporate cards
Social accounts to build
409a/83b valuation
Trademark search
Brand positioning
Vendor tracking
Asset management tracking
Chart of accounts
Incorporation/EIN/W9
The total is under $10,000 for the first year.
Chapter 23 CEO‐to‐CEO Advice About the Finance Role
Matt Blumberg
What comes before a full‐fledged CFO? Lots of startups have nothing more than an outsourced bookkeeper or one junior staff accountant. Sometimes a founder or a founder's spouse even steps in on this front. As startups scale, they are likely to hire a more senior accountant, maybe an AR/AP/Collections staff member, or even a Controller or VP Finance.
Signs It's Time to Hire Your First CFO
You know it's time to hire a CFO when:
You wake up in the middle of the night concerned about cash—not just that you're running out of it, but that you aren't clear on how much you have and how fast you're spending it.
You are spending too much of your own time managing fundraising, debt, investors, and cap table questions, and issues.
Your Board asks you about some small‐to‐mid‐level analysis or metric like CAC, customer profitability, margins, or ROI, and you don't have a great answer and aren't sure how to get one.
When a Fractional CFO Might Be Enough
A fractional CFO may be the way to go if your business model is simple … some combination of a limited number of complex accounting issues, a limited number of customers/invoices/transactions, and an insignificant difference between the income statement and the cash flow statement. If what you need is someone to oversee a gradually growing team, a slow‐paced implementation of higher‐order systems, basic financial analysis or modeling, or the occasional fundraising event, a fractional CFO may get the job done, for several years.
What Does Great Look Like in a CFO?
Ideal startup CFOs do four things particularly well:
1 They spend time learning and steeping in the substance of the business—understanding the product and spending time in‐market with customers and partners. They do not believe their function is “corporate” or a service function. They insist that the people in their department do the same.
2 They are deliberate about regularly reviewing homemade systems, processes, and spreadsheets and looking for opportunities to streamline things, reinvent them, or move them into systems. Once most things are automated and in systems, they are constantly evaluating whether or not the systems are serving the business well enough and are looking to integrate systems across the company. They are not afraid to tear down and reinvent systems and processes that they themselves set up in the past.
3 They have the right balance of pessimism and optimism and are strong at communicating both. While they are proactive and timely about delivering bad news to you and the Board, their orientation isn't around “no” and bad news. Their orientation is around investment and return and always thinking about things going on around them in the company through the lens of realistic opportunity.
4 They can fly at multiple altitudes at the same time, noticing the smallest detail that's off while thinking about business models and strategy. While most executives need to be strategic and tactical at the same time, the CFO needs to be like that more than most—mostly because the details and tactics are frequently life‐or‐death for your startup.
Signs Your CFO Isn't Scaling
