How to use FinOps fractional roles in startups | Oliver Wimshurst, RORA

Scaling businesses are increasingly turning to hiring specialists for fractional roles to build the complex operational processes, especially in finance. In this episode, Oliver Wimshurst from RORA joins us to discuss the importance of fractional roles in early stage startups, the need for startups to plan their fundraising early and when is the right time to hire a CFO.

How has the finance function evolved? 

Gone are the days when finance teams were confined to invoices and payroll, now, they're integral to the entire business operation. In the startup world, where every move counts, having a finance team actively engaged in various aspects is a game-changer. Yes, they handle reports and financial management, but picture them teaming up with sales, influencing pricing decisions, and strategizing with the software team to manage expenses.

Why does this integration matter? Well, in today's market, investors care about profitability. Finance teams play a pivotal role in showcasing a company's financial health and growth potential. It's a shift from the traditional view of finance as a separate entity - now, they're active players, not just observers. Having finance more integrated in business processes not only adds value to the company, but also gives finance professionals a more exciting and meaningful role.

How to set up financial operations for scale? 

It starts with setting up solid foundations. In the early stages, it's about payroll, bookkeeping, and tracking receipts. As startups grow, finance operations get more complex, that means your tool stack will also mature. Finding finance partners who understand these unique challenges is key and also rare. It's not a one-size-fits-all approach - it's about tailoring solutions to align with your company's goals. And that is where the value of fractional roles come in. These people have seen it all and can set up your finance and operations right from the very beginning so when you are ready to build an in-house team, they are set for success. 

The evolution of finance operations in startups is real—moving from basic bookkeeping to a more integrated approach that adds value to the business. That means evaluating your payment stack and how that integrates in your systems. 

And then, there's cash flow. Building simple, flexible cash flow is crucial. Startups often would over-engineer cash flow and make it overly complex. Accurate data, easy-to-understand forecasts, and controlling expenses are the pillars of financial stability. It's about making informed decisions based on reliable financial forecasts. Traditional forecasting methods using spreadsheets have evolved making way for new software tools that use accurate data and useful interface to help finance teams do their job better. 

What to consider when hiring your first roles in finance team? 

The early hires shape the company culture and goals. It's not just about qualification, cultural fit and adaptability. Hiring senior executives from bigger companies might seem impressive, but it can be a challenge in the startups. The financial implications of hiring decisions are real, and startups need to assess skills, expectations, and cultural fit to avoid costly mistakes. Founders also need to trust their instincts. While advice from VCs is valuable, their incentives are guided by the long term success of the company. Seeking support from other founders and leveraging startup communities is essential.

And when considering hiring a CFO, timing is crucial. Bringing in a CFO too early might not align with the company's growth stage. In later investment rounds CFOs can bring certain optics that demonstrate there are financial processes, controls, and compliance are in place. Especially in businesses that operate in regulated markets, those optics are crucial.