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Financial Officers

Hiring the right CFO for your scale-up in emerging markets: A fine balance of experience and agility

A strategically minded CFO can help ambitious scale-ups turn vision into reality, but success also depends on timing, diversity of experience and appetite for adventure.


By Tom Clarke and Suvi Kitchloo

The CFO is one of the most critical roles in any company. Whether at a Fortune 100 organization or a small private partnership, the CFO holds a unique position in the C-suite, providing vital strategic support to the CEO as well as overseeing day-to-day financial operations. This is the same for any successful scale-up. At some point, it becomes necessary to bring in an experienced leader who can ensure the business can both scale quickly and professionalize at the same time. The phrase “build the plane as you fly it” is an applicable analogy: a management style that favors agility and flexibility over traditional planning and execution. This applies to organizations in emerging markets as much as their counterparts in developed markets.

Founders and investors frequently enlist us to help them tackle this need. For this article, we asked observers with skin in the game to outline their decision-making process and interviewed them to understand the successes and failures they have seen within their portfolio or peer network. 

Timing is key

Typically, we see the need for a CFO when a company’s growth hits the steep climb on the S-curve.1 Scaling can mean different things. It might be that the company is looking to enter new markets, or geographic regions, or launch new products and services to generate more revenue. This is typically when a company is seeking growth capital to accelerate its development and gain market share and wider commercial coverage. If a company does not have a CFO or equivalent, it will lack the foundation to navigate this growth period. Founders and investors look to the CFO as a key pillar to support the strain of hypergrowth.2 With an experienced financial leader in place, founders and the board can be comfortable that this vital function is receiving deliberate attention. This frees founders to focus on other growth functions such as marketing, sales and business development. 

Amjad Ahmad, managing partner at 500 Global, said finding the right time to hire a CFO depends on the company's profile and financial complexity. “Some variables to consider are: How complex is the fundraising for your business, and does it involve multiple sources of funding—equity, debt, and convertibles? Are you growing rapidly with increased complexity in budgeting, cash management, financial reporting, and tax? Are you a multi-jurisdictional business? Are you planning an IPO in the next 24 to 36 months? Are you planning complex transactions such as acquisitions, M&A, corporate or government partnerships? These are all important to flag and highlight before making a CFO hire.”

For Sandeep Kher, director for portfolio finance at Peak XV Partners, a CFO becomes necessary as soon as the business has achieved some level of product-market fit (PMF) and monetization. “Finance roles are not back-ended roles,” he said. “It is important for stakeholders to get away from that mindset. Finance is an enabler and should have a seat at the table early on, balancing growth, capital allocation, and risk management. I believe the CFO role is pivotal and plays an immense part in the success of any organization.”

Strategic thinkers wanted: Prioritizing CFO qualities

The next dilemma is determining the type of leader required. This depends on what value is needed for the next three to five years in terms of technical skills, leadership attributes and experience. It will also depend on what the finance function looks like today, the skill set of the current founder(s) and leadership team members, and the business model. We commonly see two types of CFO requirements for scale-ups: a highly strategic and growth-orientated finance leader or a technically and operationally strong finance executive. Some hold both skill sets, but you may only have the appetite (and budget) for someone who covers one.

A strategic and growth-minded CFO can add great value if the current finance function is not complex and doesn’t need a major overhaul, or if the finance function has been built sufficiently for scale already. In these situations, a strategic CFO can support forward-looking initiatives such as fund or debt raises, IPO readiness preparation, M&A activity, talent development, and board management. If the company is looking to raise capital in the short to medium term, this leader may have extensive experience in capital markets with a background in investment banking, private equity, or broader financial services. These leaders usually have extensive financial services experience (15-plus years), holding multiple certifications and qualifications in finance. Some will have spent time as a CFO; however, others may come from industry segments such as investment banking, financial consulting, or private equity. They hold great value as they have advised a variety of clients through both growth periods and tough economic times. Their diverse project experience and exposure to a variety of business models and situations help them think creatively, and most importantly, with value as the key metric.

An operationally strong CFO/finance executive can be strategic but will have deeper experience in building up finance functions to be autonomous and data-driven. These leaders will be tenacious and have a strong technical understanding, having worked with multiple enterprise resource planning (ERP) systems and modules. They will not be afraid to get their hands dirty, chipping in to support accounting, financial planning, and system rollouts. They could have worked in smaller teams; however, we also find these leaders in larger organizations that have executed finance function buildouts or other major rollouts. Many private equity firms will have a rolodex of these financial surgeons, using them to drive greater performance in some of their portfolio companies. 

Working as a CFO in a start-up or scale-up environment can be the most dynamic, demanding and enriching incarnation of the role, said Peak XV Partners' Kher. “It takes a lot out of you but provides a platform full of learning and rich experiences. Nowhere else would you get such a wide spectrum of tasks to manage.” He said this environment suits those who “thrive on ambiguity, are always ready to deal with unpredictability and have a willingness to dig into trenches and think long term.”

500 Global's Ahmad noted that in his experience, CFO hires work when the individual is chosen as a strategic thinker who can add value as part of the executive team, informing “critical initiatives from leading fundraising efforts and negotiating with banks and business partners to assessing the impact of acquisitions and pricing strategies.”

He added: “The CFOs who have not worked are one-dimensional and can only do financial reporting and planning.” 

The value of diverse experience

Direct scale-up and growth experience obviously have merit, but the right leader will be successful for many reasons beyond these. Very few scale-up CFOs have only worked at scale-ups. Many began their careers at multinationals or more established businesses. Having a corporate background can add huge value when it comes to upgrading the finance function. This means that it can also be effective to source leaders still in the corporate world yearning to apply their skills and experience to an ambitious early-stage business. These leaders are harder to find and carry a large element of risk, but with the right mindset, they can prove to be equally—or even more—valuable.

The other important factor is the adaptation of technology within the finance function. Strategies vary according to complexity, scale, budget and objectives, which themselves differ greatly depending on whether the organization is a scale-up or multinational. Scale-ups often value agility and cost-effectiveness, while multinationals focus on compliance, scalability and business analytics. Scale-ups can benefit from a CFO who has worked at multinationals and implemented technology such as ERPs or other business intelligence tools. It is also important to note that a CFO in a multinational environment will have gained additional experience in compliance and risk management, which can help build the muscle for risk tolerance as the company matures. 

It pays to keep an open mind when hiring a CFO. The safer option would seem to be a CFO with scale-up and growth experience. Yet across multinationals, we have seen high-performing talent with a combination of international experience, agility, and inspiring leadership credentials perform very well when hired into early-stage companies. We also see a trend of younger CFOs taking the mantle who bring best-in-class FP&A practices, as well as strong systems exposure that can professionalize the finance function. They may lack some of the leadership and stakeholder management competencies of an accomplished CFO, however, they are good options for firms that are at the commencement of scaling.3

Common traits of a high-performing CFO 

As the CFO role continues to evolve from a functional leadership role into a true business partner, CFOs need to put increased focus on people management and co-creating purpose for the business. One important area for CFOs to navigate is cultural norms related to hierarchy and expectations around roles and responsibilities. Decisive leadership and good communication are core qualities of CFOs that can steer their companies to success. This involves the ability to inspire and guide teams with empathy towards common goals and build balanced teams through both internal talent development and external recruitment.

With new responsibilities on their plates, CFOs must also have the right attitude: an eagerness to succeed and cultivate a business-value mindset. This is crucial for addressing unforeseen challenges, delivering precise and timely information to stakeholders, and above all, taking charge of business change, such as digital transformation, environmental, social and governance (ESG), or leading diversity, equity and inclusion (DE&I) efforts. With diverse and complex regulatory and governance landscapes that vary across emerging markets, CFOs must also strategically navigate these nuances with tact.

Part of the mindset for success also includes viewing technology as both an enabler and a disruptor. CFOs should lead the way by advocating for technology within their teams and honing their digital capabilities. To make better decisions with data-driven analysis and drive automation, these leaders must tap into the latest developments in AI and natural language processing (NLP).

Advice for founders

It is important to recognize that there is no standard solution when it comes to hiring a CFO for a scale-up. There is a CFO profile for your specific growth stage and for your company, including the culture. 

Founders should appoint CFOs with the capabilities and qualifications to achieve full functional leadership. This includes the skills to maintain a strategic, forward-looking view of the entire company as well as the ability to oversee the finance function. Other key experiences to consider for the CFO role could include fundraising capability or cost restructuring. It all depends on what the company needs to enable growth over the next one to three years. This will not be the same within every startup or scaleup. Don’t be afraid to look at the different types of leaders to give you perspective. You can then weight up what the business truly needs from this leader and decide on that basis.

Cultural fit is vital. As CFOs occupy an increasingly prominent role in the organization, they have a direct impact on the people in their teams and exert influence across the business and even beyond.4 Founders and Boards should spend time seeking out this fit during the search and interview stages. Later, they should implement a systematic onboarding plan to ensure the CFO’s transition into the role is accepted by the business and that they are set up for autonomy and success.

Ultimately, life at a start-up or scale-up is an adventure. To succeed is to accept and enjoy working with uncertainty and unexpected challenges. While part of the CFO's role is to tame these factors by introducing structure and an element of rigor, the most important qualities that they bring to the table are the ability to strategize, adapt, and enable the organization to seize opportunities. The right CFO is a great asset, and the appointment process must reflect this reality.


1 Alexander V. Izosimov, “Managing hypergrowth,” Harvard Business Review, 2008, hbr.org

2 For more on how this applies in biotech specifically, see Henry Bartlett and Lisa Gordon, “Biotech focus: Finding CFOs for booming companies,” Heidrick & Struggles, heidrick.com.

3 For more on considerations for new finance leaders, see “First-time CFO guide,” Heidrick & Struggles, heidrick.com.

4 These considerations also apply to COOs. For more, see “Fintech COOs: Redefining the role for a new industry,” Heidrick & Struggles, heidrick.com.

About the authors
Tom Clarke
Tom is a partner in Heidrick & Struggles’ Dubai office and a member of the global Technology & Services, Technology Officers, and Digital Officers practices.
Suvi Kitchloo
Suvi is a principal in the Dubai office and a member of the global Industrial Practice.