Former CFOs move into the founder’s chair

If you’re a CFO or seasoned finance professional, you may already have the right tools to start and run your own company. Now at the center of most business activities within an organization, today’s CFOs are well-equipped to see where there are business gaps and problems that need solving.

The broad operational and strategic experience of modern CFOs gives them a head start, according to Amy Spurling, founder and CEO of Compt, an employee perk stipend software platform for HR and a former long-time CFO herself. “I really do believe that most operational CFOs—as long as you've got an idea that you believe in—are sitting in a phenomenal position to start a business,” Spurling said. “So the question is, what do you need to put in place to actually go and start it? And that’s really just a matter of taking the leap.”

Today’s CFOs are much more engaged in aspects of a business that they may not have had direct exposure to in the past, from communications, to managing IT and HR, to business development—experience that can help when founding a business, Richard Deosingh, district president at accounting and finance staffing firm Robert Half, told CFO Brew. “They’re able to see the entire picture,” Deosingh said of CFOs. “Having that entire picture perspective—not just part of the jigsaw puzzle, but all of the pieces in the jigsaw puzzle, will certainly make them…more versed in solving the growing pains of a business today.”

Howard Katzenberg is founder and CEO of Glean AI, a vendor spend management software company. He says when he was a CFO, he wasn’t able to find a tool that effectively managed vendor spend. “There were no strategic solutions that helped answer the questions I cared about as a CFO, like, why did we choose this vendor? What are we purchasing from them? Do we have a good deal? I’d experienced that problem firsthand. And I could visualize what the solution would look like in terms of the user experience, the design, and the functionality,” he told us.

Spurling also faced a common problem for CFOs: She couldn’t find products that allowed her to manage increasingly complicated employee compensation and perks. “I saw it and was very frustrated that the tool didn’t exist. I talked to lots of other CFOs, complained about it frequently, and was like, why isn’t somebody building this?” she said.

That frustration led both Katzenberg and Spurling to launch their own companies to solve the problems they were identifying, a familiar motivator for many entrepreneurs. And they were both able to lean on their practical experiences as CFOs to build their products. “Finally, I was like, nobody’s building it because they have to have my background to build this,” Spurling said. “So I’m going to build it, because I need this tool.”

Making the first move. Once finance professionals—especially today’s more operational CFOs—make the leap into founding their own companies, they have an advantage over traditional founders, according to Deosingh. But that doesn’t mean a CFO will have completely smooth sailing as a founder; there are a lot of areas where a former CFO will have to adjust and grow.

“As a CFO, you have to be analytical, you have to be very data-driven, measured in how you make decisions. As a founder, you have to break things, you have to go on instinct, you don’t have data available,” Katzenberg told CFO Brew. “I had to unlearn a lot of my CFO tendencies as a founder to encourage faster paces of innovation, faster pace of change, faster pace of experimentation.”

For Spurling, it took time for her to learn how to sell her company’s value proposition. “I can be a good salesperson, but it was definitely an adjustment to learn that, because a lot of times you're looking at things in a very different way as a CFO,” she said.

Handling uncertainty. Katzenberg encouraged CFOs who are thinking about starting their own company to consider whether they have “a unique experience of a problem” that can give them an advantage over the competition. He also added that having a broad network that can help find talent and create partnerships is essential.

Deosingh sees the potential for more CFO-founded startups in the future, and sees the appeal of having a CFO at the helm, especially for private equity-backed companies that are looking for prudent fiscal management of investment dollars. “You’ll probably see more of that, which means that, more than likely, the person you would want to lead that charge would be a very well-experienced, well-versed CFO,” he said.

But according to Katzenberg, perhaps the most important question fledging founders should ask themselves is: Can you handle the risk of owning your own business? “It’s a tremendous sacrifice. You need to have those conversations with loved ones about the sacrifice required,” he said. “A lot of CFOs may not handle uncertainty. Do you have the right mix of both hard skills and soft skills? Soft skills are really important as a founder, in terms of recruiting and selling.”