Ask HN: Do start ups need finance people?
So, I have this passion for programming (yes, I have my side project in flask), but I was wondering if my day job skills as a finance controller might also be helpful for start ups.
To be clear, I am not talking about accounting here, but rather more about modelling/understanding the company financials: budgeting, cost tracking against the plan, sales planning, margins, cash flow, account receivables, etc.
This is especially important if you get pushed on profitability or if you want to show a company in order to increase its acquisition value. Another example could be if you are considering giving up equity or getting a borrowing. Etc.
Do start ups do this? If they do, do you think they could benefit from external advice as hiring a person for that might just not be worth due to their size?
2 comments
[ 3.1 ms ] story [ 19.0 ms ] threadBefore raising any money or selling something, there's little point in a finance person being involved. Startups should be concentrating on building a product and putting it in front of people, defining a strategy for putting it in the market somewhere and doing everything they can according to that strategy. NOTE: That's not a business model. You can't really have a business model until you know who wants the product. You can guess at one, but that's pretty worthless in my opinion because you'll just throw it away once you get some market data.
Once you have a product and some knowledge of how it fits in the market though, then you can start doing financial projections and business modelling. That's when a financial advisor is very useful. Still not much point in hiring someone though because there isn't that much to do and most startups can't afford the tools to do it. Advisors bring their own tools.
Then one of two things happens - investment or sales (or both). If there are sales after the product gets some traction, then a financial controller is a very good idea. The thing is though, then the company isn't really a startup. It's a "proper business". If the startup goes down the investment route though, then there's very little for a financial controller to do outside of the actual capital raising exercise - so they should still only be an advisor.
tl;dr There's not much value in a financial controller unless you have sales, at which point the business is beyond what I'd define as a startup.
For me, all that matters is burn rate and cash in the bank. The rest won't be relevant to me until I've got revenue as well as expenses.
For slightly larger startups, they will hire someone like you to assist in these tasks, but since you already do that as a day job I doubt that is what you have in mind.