- Fintech and other startups increasingly treat the first strategic finance hire (often a banker/PE-style generalist or CFO) as essential, not optional.
- This role goes far beyond accounting by cleaning up messy data, building forecasts/models, prepping fundraising, and advising founders.
- Fractional CFOs can bridge the gap early, but often fail as revenue, fundraising, and regulatory complexity rise, pushing the need for a full-time leader.
- Equity for early finance hires is meaningful but declines fast, with median grants dropping from about 1.5% for the first non-founder hire to about 0.3% by the sixth.
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The evolving environment in fintech and startup ecosystems means that having a seasoned finance executive early on is no longer a luxury—it has become strategic. Founders like Adam Swiecicki, ex-CFO at Brex and current CFO at Rippling, advocate making a “generalist Swiss army knife” from banking or private equity the first finance hire, not the finance team build-out. Given the current fundraising, regulatory, and macroeconomic pressure, early-stage startups leave themselves highly exposed if this role is delayed.
What distinguishes early-stage from later-stage is scale, complexity, and risk. Startups often begin with rudimentary systems and processes. As one VP of finance noted, outsourcing accounting and basic bookkeeping is fine early, but having someone who understands data messiness, financial modeling under uncertainty, and investor expectations is crucial for building trust and market confidence.
Fractional CFOs (part-time or outsourced) are increasingly popular as startups look for interim solutions, especially before seed or in early Series A stages. They help with fundraising readiness, KPI alignment, and financial hygiene. Still, multiple sources caution that fractional roles can’t always carry through as companies hit $10M+ in revenue or approach regulatory/regulatory complexity where a full-time CFO becomes mission-critical.
Equity compensation plays a major role in attracting early-stage finance executives. Data from Carta shows that the first non-founder finance hire typically receives around 1.5% of startup equity, while grants fall sharply to ~0.3% by the sixth hire. Founders who wait to hire a finance leader or who delay equity offerings risk both operational inefficiencies and losing key talent to competitors who are more generous and earlier in alignment.
Strategic implications for startups include recognizing signals when financial leadership is overdue: a messy cap table, underdeveloped forecasting, opaque metrics, or preparing for large inflection points like funding rounds, regulatory compliance, or scaling operations. For investors, prioritizing portfolio companies that hire a strong finance partner early tends to reduce downside in due diligence, cleaning up problems ex post, or rescuing performance shortfalls.
Open questions for founders and boards include: What is the ideal profile for the first finance leader (banking vs. startup experience)? What mix of cash vs. equity is sustainable? At what revenue run rate or capital raise size is a fractional CFO insufficient? And how do regulatory or regional variances affect these thresholds?
Supporting Notes
- Adam Swiecicki, ex-Brex CFO now at Rippling, argues the first finance hire should be a generalist with investment banking or PE experience to act as a thought partner to the CEO.
- Michael Miao, VP of finance at Glean and former Deutsche Bank banker, says early-stage finance isn’t just accounting—which can be outsourced—but needs someone who can grapple with messy startup data and think broadly.
- In a variety of interviews, Swiecicki advises hiring a full-time finance executive rather than hiring too late or relying on non-startup banking alum who may dislike early-stage ambiguity.
- Fractional CFOs are used as interim solutions, but VCs and investors often believe they fall short when depth and consistency are needed, especially approaching Series A or regulatory complexity.
- According to Carta data via TechCrunch and financial-careers sources, the median equity for hire #1 is ~1.5%; by hire #6 it drops to ~0.3%.
- Evidence that first five hires together consume ~3.6% of cap table under median equity terms; first ten hires often use less than ~5%, preserving dilution for later rounds.