Our board says we should replace our CFO for someone with more experience as we prepare to go public. Should we?
Maynard Webb
Founder, Webb Investment Network; Author ‘Dear Founder’; Board member Visa and Salesforce.
Q: We have a great CFO and we’ve been very happy working with her. Now, as we prepare to go public, our board thinks we need a CFO who has done an IPO before. What do you think?
-Founder of a Series D pre-IPO company
Dear Founder,
Congrats on your company’s growth.
It is a safer route to hire someone who has done it before, but that doesn’t mean it’s a better route. Someone doing it for the first time may have a larger appreciation for it and may be more enthusiastic.
It’s great that you are happy with your current CFO. That means that you work well together and that’s demonstrated by the success you’ve already achieved together. Do you think she can take you through this next stage?
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Let’s look at the full picture:
-Do you have a board member who was a CFO and has experience taking a company public who can help?
-Are you open to hiring outside advisors? There are many external advisors who can help, including those who can offer more assistance to your CFO.
-Have you thought about the long-term plan? An IPO is a massive event, and it is a big deal to take a company public. Once you do there are new regulations and the new reality of having institutional shareholders. Is your CFO the right person to lead you through the initial public offering and beyond? Is that something she is excited about, or terrified about? You want her to be enthusiastic about this whole new world and all that it entails.
I understand the opinion of the board may carry a lot of weight, but this is still your call. They may be more comfortable with the safe route. You can listen to their thoughts and explore if there’s someone better to take you through this next phase. But don’t be bulldozed into making that decision. If the CFO’s only sin is that she hasn’t done an IPO, then you can buttress her with other experienced advisors. Remember, at some point everyone has a job they haven’t done before and experience doesn’t always mean excellence.
Every week I respond to a new question. Ask me your question in the comments section.
Love this thoughtful, balanced, answer. One of my CEO’s asked me, “is this your first VP HR role?” When I said, “yes”, he said it was his first CEO role. Let’s do this!
I always choose someone who is willing to die for the company over genius. In my experience, all the knowledge, experience in the world rarely equals the hunger, ambition, passion and sheer will power to succeed. It is in these moments, through these attributes that leadership is defined by challenge rather than the ability to spell check. Bearing in mind the multi-faceted complexity of an IPO, if I'm a potential investor I need/demand to see commitment at the atomic level from the creator of the vision to the technician who makes it possible to the alchemist who makes it happen.
Everyone has to do something for the first time. I was a first time CFO when I joined Braze in 2020 and our IPO took place in November. In fact my whole career has been about doing things for the first time. Knowing how to lead a team, learn fast and leverage advisors has so much more value than ‘having done it before’. Humility and hard work will get you so much farther than a rinse and repeat, in my view. Relevant knowledge / financial mastery for a CFO is obviously critical but boards have to be open to that person who will attack the role with passion and grit and may not have ‘done it before’.
Bachelor of Commerce - BCom from Nizam College at Hyderabad Public School
2 年????
Infrastructure & Software Engineer
2 年The board does not have any weight in this conversation. This is my personal opinion. If she has her CFO position, she has already proven her capacity and if there are any doubts, the investment banks will take care of them. Go ahead, ask your investment bank(s) to help out with your IPO and watch what happens. Also don't overprice or you will shoot yourself in the foot.