The most important recruiting tool for CFO candidates is LinkedIn, executive search pros specializing in finance leaders said in an Airbase webcast.
Executive recruiters maintain databases of controllers, heads of accounting and FP&A, vice presidents of finance, and CFOs. But they go to LinkedIn when a client is looking for a finance leader and they don't have a well-targeted pool of candidates to tap.
"Invest time in your LinkedIn profile," said Rhoda Longhenry, global head of the financial officers practice at True Search. "It's not a resume; its a marketing tool."
Longhenry, a 20-year veteran of the field, said she can tell within a few seconds if the person is a potential fit for the company she's partnering with on a search.
"I don't need to read it closely," she said. "I want to know the story that profile tells me."
She looks at the quality of the companies the person has worked for, their career progression, and, if they've moved around a lot, whether the reasons for the moves are clear.
Less important is detail on the accounting, FP&A or other technical skills the person brings; those skills are seen as table stakes. Recruiters are looking for evidence the person knows how to drive organizational change.
"How were you a catalyst?" she asked. "What have you actually contributed? ‘I joined to build up the FP&A function or controllership function.' It's not just your scope of responsibility."
Most startups, once they've had several funding rounds and start looking for their first CFO, will often want someone who's been a CFO already, especially if they're planning to go public within a year or two.
"We'll often look for somebody who has taken a company out, especially if that CEO has never done that before," said Jen Holmstrom, talent head for venture fund GGV Capital.
The most important detail recruiters look for is how the CFO will fit with the CEO, because that's the most important relationship in the organization. "It's a bit of a marriage between the CEO and CFO," Holmstrom said "Not only from a skills standpoint, but how they think."
A CEO who is a first-time founder with technology chops and company vision typically wants someone who can fill in fundraising gaps, generate a return on investment, and other types of strategic gaps. A company like this might already have a vice president of finance or controller, but unless that person is more than a numbers person, looking externally for a CFO makes sense.
"The biggest difference between a CFO and a vice president of finance is operational versus strategic experience," Longhenry said. "They're also set apart by their leadership skills, presence and gravitas, and whether they can stand up to board members, talk to investors, and tell the story of the business."
It can be hard for a controller, head of FP&A or vice president of finance to find opportunities to step into the CFO role, but it does happen, recruiters said. What's key is the person is forward-thinking and the company is in the right stage of growth.
"CEOs and board members are open to step-up candidates, but it depends on the company's stage and scenario," Longhenry said. "If it's a little bit earlier in that growth curve, and they're willing to take a chance on someone who hasn't had the seat before, absolutely."
If the company is later in a growth stage, elevating a lower-level executive is a bigger stretch. "As companies get more complex, they may be operating in multiple geographies, and the business itself may be getting multifaceted," Holmstrom said.
That's why it's important for a controller or head of FP&A to reach for chances within their company to go to the other side to get that broader experience.
"Think about your [LinkedIn] profile," Longhenry said. "You want to be anticipating six, 12 or 18 months forward."
The CFO recruitment process averages three months, although Longhenry has completed a recruitment in as little as seven days and has taken as long as 18 months. "The process takes a lot longer than many people expect," she said.
Typically, the recruiter has an initial meeting with the CEO to determine what kind of CFO makes most sense for the company. That can vary widely depending on the growth stage, which gaps the CEO needs to fill, and the company culture.
"I know what an FP&A-oriented CFO feels like," Longhenry said. "I know what a controller-oriented CFO feels like. I know what a banker one feels like. I try to understand what I'm really trying to solve for and what that looks like in a candidate."
In many venture-backed startups, the venture firm has an executive placement person working with recruiters to help fill c-suite roles throughout portfolio companies. In these cases, the executive placement person will meet first with the CEO and then work with the recruiting firm throughout the process as a key contact.
In a typical search, the recruiter will bring an initial five or six candidates to the CEO and then one or two a week after that until the candidates get narrowed down.
Getting these interviews on people's calendars is one reasons the process can take so long; people are busy on both sides.
"Even if they meet someone really strong who they're excited about, it still takes time," Longhenry said. "You have board meetings coming up they have to prepare for, or they're distracted by other business priorities."
The recruiters shared two potential landmines for candidates: meeting the staff they would manage if they get hired, and a last-minute board interview.
Letting finance staff weigh in on a candidate is generally poor practice, unless they bring the same broad understanding of the role the CFO is expected to play as the CEO does, which is unlikely. "It's easy for the team to say, ‘We don't like this person' just because they didn't click with him," Longhenry said.
A last-minute board interview isn't good because the board typically has veto power, and that is best wielded earlier in the process.
"One of the worst things that can happen is the team is very excited, they find a candidate, get to the end of the process, and they're ready to go with an offer," Longhenry said. "Then, they meet with the board, and the board says no."
For finance executives interested in making a move, there's nothing wrong with emailing a recruiter and then following up periodically, but it would just be the first step in a potentially long process, Longhenry said.
Recruiters typically look for specific types of candidates on behalf of clients. If you don't fit what they're looking for at that time, they'll add your information to their database but typically they won't take it beyond that. But at that point, you're on their radar screen; they can revisit your information as they work with other clients.
Longhenry recommends email over a phone call, because an introductory call isn't an efficient use of time on either side; the recruiter will likely do the same thing as would be done with an email: file the information away.
On the other hand, if a recruiter calls you, either take or return the call, even if you're not looking; it can help if you want to put out feelers in the future.
"At least have the courtesy to say, ‘I'm happy now but I'll think of ideas.' Something as simple as that," Longhenry said. "That allows me to tell my client. 'I've talked to this person, they're not interested,' and I'll know to call you again, so when you're ready, hopefully we can help you."