BSc, MBA, CPA, CA, CMC, PhD*
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Recruiting the Ideal eCFO for Your High-Growth Entrepreneurial Venture
As Canadian VCs consider the financial management needs of growth-oriented ventures are stage-of-development dependent, I have created an echelon of recruiting criteria that matches the evolution of need. These are presented in a pyramidal structure within the article (Figure 1). The base level comprises core functional capabilities which are foundational to the provision of basic financial management services (e.g. accounting and financial reporting). As a second, albeit optional level, VCs considered having relevant industry experience or domain expertise to be a benefit because it reduces the time required for learning a new industry's modus operandi. The third level comprises higher order financial management competencies which are commonly accompany experience of higher ranked positions (like VP Finance or CFO). For example, these can include financial strategizing, more comprehensive business planning & modelling, financial forecasting & scenario analysis, MDA-quality financial reporting & interpretation, and capital-raising). The fourth level distinguishes an entrepreneurially-minded CFO from those professionally-qualified and experienced financial managers that may be better suited to an established, stable organization. The associated 10 (or 12) distinguishing attributes are identified in article #4C7.2023. Finally, the notion of an 'ideal eCFO' must be entity-specific owing to the uniqueness of both the venture's TPM opportunity and the idiosyncrasies of its leader. Therefore, the ultimate criterion if Person-Person fit with the specific entrepreneur-leader.

It is my opinion, the top 3 echelons are mandatory and critical to recruiting an 'ideal eCFO' for a specific enterprise. The lower levels are either nice-to-have or can be delegated to less-qualified managers. Since relationships blossom over time with appropriate nourishment, I also recommend recruiting an 'ideal eCFO' as early as possible in the enterprise's evolution, rather than the common practice of waiting till a Series 'A' or 'B' capital raise, when the enterprise can 'afford it'. The latter strategy risks delays in enterprise development and incurs an increased cost and adverse opinion from management churn. eCFO recruiting should be value-based rather than cost-based and an 'ideal eCFO' will be able to justify their value even before hiring.
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