You’ve made a big decision. It’s time to hire your SaaS or subscription-based company’s first CFO. Your organization is in a position to warrant a professional executive in this role, and you generally know what you’re looking for in a CFO.

But, how can you be sure that the CFO you’re hiring truly meets your needs? Subscription-based businesses require certain capabilities and expertise around process and structure to function properly.

As a corporate finance consultant and on-demand CFO with a particular focus on recurring revenue businesses, here are my do’s and don’t of hiring your first CFO:

1. DO look for a specialized SaaS CFO

Hire a CFO who has done what you need him to do. 

As explained here, CFOs are specialized. As a founder, you can’t afford to hire one you think could do the job. Instead, hire one you know can and will do the job.

You may not know any offhand. That’s okay. This role is too important to rush. Rather than pull the trigger on someone unqualified, tap your network. Ask your fellow entrepreneurs and find someone who specializes in building recurring revenue and SaaS companies.

Rest assured, there are plenty of SaaS CFOs out there waiting for your call. Don’t settle. Find a qualified CFO even if it takes more time and more money than you think you have. It could mean the difference between your productivity and your frustration.

2.  DON’T hire a CFO with the intention to save money

Great CFOs are not cheap, even the ones who claim they can save you money because they are a shared resource (CFO-as-a-Service). The promise of these firms is an expensive and experienced CFO for a fraction of the price.

Would you hire a VP of Sales who claimed he would save you money? No.

Generally, I would not recommend you go bargain hunting for any key hire. The role of a CFO is to manage and drive business growth. That’s simply too important to take lightly and cut corners with.

Take your time. Find a SaaS CFO that is experienced and skilled at being a SaaS CFO. 

(PS: If you need one and you can’t find one, I know gobs so drop me a note and I can refer you to some really excellent options.)

3. DON’T hire a CFO who promises to raise you capital

CFOs are not the magic wand-wavers of capital raising. I have yet to meet anyone who is able to predict the future.

Be aware that promising to raise capital for you and preparing your company to raise capital are two vastly different things. A great SaaS CFO will know what SaaS investors look for when evaluating you and your firm.

SaaS investors come in all shapes and sizes: VCs, angels, strategic investors, independents, government programs or grants, and family offices (to name a few.) A great CFO will know what types of investors are a better fit for your stage in development and your offering, with consideration to your competition and your management team. 

Expect your CFO to prepare you for raising the type of capital that suits you best. Ask your prospective CFO this question before you hire them:

“What type of capital do you think suits us best at this stage in our development? How much do you think we should raise? And when?” 

While there’s no crystal ball that will give anyone the ability to predict the future, a CFO who is seriously interested in associating with you will have thought through the calculus of his approach already. 

4. DO expect to hire more than one CFO (but not at the same time)

The shelf life of a SaaS CFO is really short. 

The CFO you need now is not the same CFO you will need 36 months from now. A company that thrives evolves to a stage in 36 months time that requires a CFO to manage other managers.

If your company is not thriving, in 36 months you will need a CFO who can effectuate a turnaround and thrives in an environment with really tough operating uncertainties. They must be able to plot a path through problematic times.

These are two very different people with two really different skill sets.

As an on-demand CFO, I like to tell prospective clients that my goal is to put myself out of a job. The challenges many hire me for at the start of our engagements are not the same ones they have 36 months later, or sometimes 2 months later.

I solve problems and then move on to new problems, either at the same company or new brands.

You should expect your CFO to have the same mindset. Ask any CEO: running a $5M company is far different than running a $1M or $12M company.

The SaaS CFO you decide to work with should not expect that this will be their job for life. Given the rise of the liquid workforce, this should be no surprise to you or your candidate of choice. Ensure you get on the same page as your prospective hire. Ask them now what they plan on doing when the company matures and moves beyond the stage that is firmly in his strike zone.

Doing so will set both of you up for success.