Start-Up and Scale-Up Finance Roles: What to Check Before You Join
Start-ups and scale-ups can be exciting places for finance professionals. You build things from scratch. You work directly with founders. You see decisions made quickly and results appear fast. Many people land a Head of Finance or senior Finance Manager title years earlier than they would in a large company.
They can also be chaotic, underfunded and short-lived. Some finance professionals join a promising scale-up and find messy books, no systems, a founder who ignores the numbers and a cash runway measured in weeks.
Before you join, it pays to look closely. This article explains what to check before you accept a finance role in a start-up or scale-up, and how the move can affect your career.
Why finance people join start-ups
The appeal is real. Common reasons include:
A bigger title and broader scope than a corporate role would offer
Direct access to founders, investors and the board
The chance to build a finance function from the ground up
Exposure to fundraising, investor reporting and fast growth
Equity or share options that could be valuable if the business succeeds
A culture that moves faster than a large organisation
For the right person, a scale-up role can accelerate a career by several years.
What the role usually involves
Finance roles in start-ups and scale-ups are rarely narrow. A Finance Manager or Head of Finance might cover bookkeeping oversight, month end, cash flow forecasting, investor reporting, board papers, payroll, tax, R&D tax incentive claims, fundraising support, pricing, systems and sometimes HR and legal administration.
In an early stage business, you may be the entire finance team. In a larger scale-up, you may lead a small team and work with an external accountant or fractional CFO. Either way, expect to be hands-on.
Check the cash
The most important question in any start-up is how long the money will last. Ask directly.
How much cash does the business have?
What is the monthly burn rate?
How many months of runway does that give?
When is the next funding round planned, and how confident is the business of raising it?
Is the business profitable or on a path to profitability?
As a finance professional, you are entitled to ask these questions. A founder who will not answer them is telling you something important. A business with six months of runway and no clear funding plan may not be a stable place to work.
Check the investors
Investors shape the business. Venture capital, private equity, angel investors and strategic investors all bring different expectations.
Find out who has invested, how much, and what they expect. Are they focused on growth at any cost or on profitability? How involved are they? Is there a board, and who sits on it?
Strong, supportive investors can make the business more stable and the role more rewarding. Investors pushing for rapid growth or an early exit can create a very demanding environment.
Check the founders
In a start-up, your relationship with the founder or CEO will shape your experience more than anything else.
Ask how they view finance. Do they see it as a partner in decisions or as a back-office function? Do they read the management accounts? Have they worked with a senior finance person before? How did it go?
If you can, speak to someone who has worked with them. A founder who respects finance and listens to the numbers is a very different boss from one who sees finance as a necessary cost.
Check the books
Many start-ups have messy financial records. Bookkeeping may have been outsourced, done by the founder or done inconsistently. Revenue recognition may be unclear. Tax obligations may have been missed.
Ask to see recent management accounts and the most recent year-end accounts. Ask who prepares them. Ask whether there are any known issues with tax, payroll or compliance.
A clean-up job can be a great opportunity if you know about it upfront and the business supports you. It is much harder if you only find out after you start.
Understand equity and share options
Many start-ups offer equity or share options as part of the package. These can be valuable, but they are uncertain.
Understand the details. How many options? What percentage of the company? What is the strike price? What is the vesting schedule? What happens if you leave? What happens if the company is sold?
Treat options as a possible bonus, not a guaranteed part of your pay. Make sure the base salary is enough to live on if the options end up worth nothing. For more on assessing offers, see doing due diligence on a job offer.
How the move affects your career
A start-up or scale-up role can be very good for your career. You get breadth, senior exposure, fundraising experience and the chance to build something. Those experiences are valuable in future Head of Finance and CFO roles.
There are also risks. If the business fails, you may be job hunting sooner than planned. Some larger employers wonder whether start-up experience translates into their more structured environments. And a big title in a small start-up may not be recognised at the same level elsewhere.
Protect yourself by building strong, transferable evidence. Systems implemented, audits delivered, funding raised, reporting built, controls introduced. Those achievements travel well, whatever happens to the business.
Moving from corporate to start-up
If you are moving from a large organisation, expect a big change. There will be less structure, fewer resources and more ambiguity. Decisions will be made faster, sometimes without much analysis. You may need to do work you have not done since early in your career.
The corporate skills that serve you well include strong controls, clear reporting, systems thinking and governance. Start-ups often need exactly these as they grow.
The skills you may need to build include speed, comfort with imperfect information and the ability to prioritise ruthlessly.
Moving from start-up back to corporate
If you later want to move into a larger organisation, present your start-up experience carefully. Explain the scale and stage of the business, what you built and what results you delivered.
“Built the finance function for a Series B SaaS scale-up growing from $8 million to $22 million ARR, including systems, month end, board reporting and investor reporting for a $15 million raise” is a strong line for any employer.
Common finance issues in scale-ups
Certain problems appear again and again in growing businesses. Knowing them helps you ask the right questions and hit the ground running.
Revenue recognition. Subscription, project and multi-element contracts are often recognised inconsistently.
Cash flow surprises. Rapid growth can consume cash quickly, especially when customers pay slowly.
Systems that do not scale. Tools that worked for ten staff break down at fifty.
Payroll and employment compliance. Fast hiring can lead to errors in pay, superannuation or contractor classification.
Tax incentives and obligations. R&D tax incentive claims, GST and payroll tax can all be missed or poorly documented.
Investor reporting. Investors want regular, accurate reporting on metrics the business may not yet track properly.
If you have solved any of these before, make it clear in your application. It is exactly what a scale-up founder wants to hear.
The metrics that matter
Start-ups and scale-ups often talk in different metrics from traditional businesses. Annual recurring revenue, monthly recurring revenue, customer acquisition cost, lifetime value, churn, gross margin, burn multiple and runway are common in technology businesses.
If you are moving from a traditional business, learn these metrics before your interview. You do not need to be an expert, but you should be able to discuss them sensibly. Showing that you understand how investors look at the business builds credibility with founders quickly.
Building the function
One of the most rewarding parts of a scale-up role is building the finance function. You decide what systems to use, how the close runs, what reports the board sees and who to hire.
That experience is valuable for future Head of Finance and CFO roles, because it shows you can design a function, not just run one. Keep a record of what you build and the results. It will become some of the strongest evidence on your resume.
Talk to the external accountant
Most start-ups and scale-ups rely on an external accountant or fractional CFO for year-end accounts, tax and advice. If you can, ask to speak with them before you accept. They will know the state of the books and the main issues far better than anyone else.
A good external adviser will also become one of your most useful allies once you start. Building that relationship early helps you settle in quickly and avoid surprises at year end.
Questions to ask in the interview
Here are questions worth asking before you accept a finance role in a start-up or scale-up.
What is the current cash position and runway?
What are the funding plans for the next 18 months?
What does the board expect from finance?
What are the biggest finance problems right now?
Who has held this role before, and why did they leave?
What systems and external support are in place?
What would success look like in the first year?
Common mistakes
Accepting without asking about cash and runway
Valuing share options as if they were guaranteed
Assuming the books are clean without checking
Not meeting the founders and board properly before accepting
Being won over by a title without checking the scope
Your next step
If you are considering a start-up or scale-up role, write down your answers to the cash, investor, founder and books questions above. If you cannot answer them, ask before you accept.
If you want help positioning your experience for start-up roles, or presenting start-up experience to larger employers, my Gold package covers your resume, cover letter, LinkedIn and positioning strategy.
If you are weighing up an offer and want an outside view, book a complimentary Clarity Session.
