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Ziddu » News » Business » PE Backed SaaS Companies and the Part-Time CFO
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PE Backed SaaS Companies and the Part-Time CFO

William JohnsonBy William JohnsonFebruary 24, 20236 Mins Read
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PE Backed SaaS Companies and the Part-Time CFO
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SaaS companies succeed with the right leadership. Many SaaS companies find themselves with a skills gap. They’re competing against other start-ups, often in saturated markets, attempting to attract private investors. There’s one internal investment that can increase a SaaS company’s chance of success: a part-time CFO.

The evolution of the role of CFO has opened it to smaller companies, from pre-revenue start-ups to rapidly scaling SaaS companies. CFOs are working with multiple clients on a part-time basis, making the role more financially viable for smaller organisations.

Part-time CFOs make SaaS companies more attractive to private investors by offering a fresh perspective on the company’s finances and ensuring financial compliance. The competitive nature of the SaaS industry makes part-time CFOs a leadership position that pays for itself.

SaaS companies don’t have to be on the stock market to have a CFO on board. The role of part-time CFO suits SaaS companies that don’t have the financial capacity or workload for a full-time position. Recruiting a part-time CFO can enable PE-backed SaaS to unlock their potential and implement a data-driven financial strategy.

FD Capital, the UK’s leading financial recruitment agency, has reported an increase in SaaS companies recruiting part-time CFOs to address the current economic uncertainty. It’s possible for SaaS companies seeking PE backing or with PE funding to recruit a CFO on a part-time basis, either remoting or in-person.

SaaS Companies and CFO Fundraising

Funding can make or break a SaaS company. PE-backed SaaS companies rely on having a CFO on board for financial credibility. Private investors and traditional financial institutions feel more secure with companies that have a CFO on their leadership team.

CFOs provide investors with the reassurance that regulations will be met and provides them with someone who can translate financial ideas and strategy. Investing in a part-time CFO can open new fundraising opportunities for SaaS companies. Many CEOs find themselves out of water when approaching potential funders with a part-time CFO filling the skills gap.

SaaS companies are increasingly turning to part-time CFOs to manage investor relations and to navigate through seed and Series A fundraising. A CFO could be brought on board to prepare a company for engaging with private equity investors by streamlining accounting and conducting an internal audit.

When Should SaaS Businesses Hire a Part-Time CFO?

A SaaS company can hire a part-time CFO at any stage of its development or fundraising cycle. It’s possible to hire a part-time CFO at any time, including as one of the first appointments to the leadership team.

The role of CFO can be moulded to suit the needs of the company, from managing budgets to investing in accounting software.

Not every SaaS company will have the workload for a full-time CFO, making a part-time position more cost-effective. SaaS companies don’t typically hire a full-time CFO until their revenue is above $5 million.

The remote working revolution has led many CFOs to transition to part-time work with a portfolio of clients. It provides a larger talent pool for SaaS companies to choose from, allowing them to select a candidate with the exact skills and experience their company needs to progress.

Fundraising and investor relations can be a sticking point for SaaS companies and CEOs without prior fundraising experience. Recruiting a part-time CFO outsources this work away from the CEO and to a financial expert who can build trust between the company and its investors.

Ideally, a SaaS company will have a part-time CFO on board before embarking on fundraising efforts. It may also be a requirement imposed by private equity investors for the company to hire a part-time CFO as a term of the funding contract.

While a SaaS company can hire a part-time CFO to engage with PE houses, they may also turn to a CFO during times of economic uncertainty or rapid growth. A CFO will bring a fresh perspective on the company’s finances and strategy, putting systems in place to develop economic resilience.

The Advantages of a Part-Time vs. Full-Time CFO

Hiring a part-time CFO can be the most cost-effective option for PE-backed SaaS companies. The company can decide how many hours a week they want to contract the CFO for, including whether their focus remains solely within financial management or if they have wider responsibilities.

The reason why PE-backed SaaS companies typically choose a part-time CFO is because of time and money. Many don’t have the workload to justify a full-time position with a part-time CFO creating a smaller financial burden. A SaaS company may choose to transition its part-time CFO into a full-time position in line with the company’s growth.

1. No Long-Term Commitment

Most part-time CFOs are recruited on a fixed-term contract, allowing the PE-backed SaaS company to trial the position and candidate. Hiring a part-time CFO provides the company with the option to extend the contract and eventually transition the position to full-time as the need arises.

A part-time CFO provides a PE-backed SaaS company with financial management and an in-house strategic advisor without a long-term commitment. Initially recruiting on a part-time basis can also allow the investors a chance to work alongside the CFO to decide if they’re the right fit and if they can develop a working relationship.

2. Addresses The SaaS Company’s Skills Gap

Most SaaS companies have a skills gap, usually in the finance department. Many CEOs start by double-jobbing, taking on most of the responsibilities of a CFO. Recruiting a part-time CFO addresses the company’s skills gap and frees up the CEO’s time.

A SaaS company can work alongside a recruitment agency to find a candidate who fills the company’s skills gap, from financial management to investor relations.

3. Cost-Effective Alternative

SaaS companies need to balance their books, especially with private investors involved. Part-time CFOs are a more cost-effective alternative to a full-time position with CFOs being an investment that pays for themselves.

How PE-Backed SaaS Companies Recruit Part-Time CFOs

Outsourcing recruitment to a specialist agency is the most effective way for PE-backed SaaS companies to recruit a part-time CFO. The agency will work with the company to identify its specific needs and streamline the recruitment process, producing a suitable shortlist of candidates.

Agencies like FD Capital specialise in connecting SaaS companies with part-time CFOs who have the skills to unlock the company’s potential. Start your search for a part-time CFO today by contacting recruitment@fdcapital.co.uk.

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William Johnson

    William Johnson is a prolific news editor who spent many years at Ziddu, one of the largest news organizations in the world. Prior to joining Ziddu, Johnson worked with a variety of different news agencies, gaining extensive experience in the field of journalism.

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