You’re entering a great phase of your company. Your startup finally has the capital it needs to accelerate development and growth. It also means that you have a lot more on your plate as the Founder or CEO.
Startups are often so focused on developing their products, they forget about the importance of building back office functions for the non-core activities of the business. High-growth startups depend on successful back-office functions that scale seamlessly when they experience rapid growth in revenues and employees. While each startup is unique every venture backed CEO needs functions like accounting, finance, administration and human resources to move forward. To give you an idea of just how integral and overwhelming the tasks involved can be let’s get a bit more specific on the back office functions a VC Backed CEO needs.
Some of the more critical functions include:
- Forecasting Burn with a high degree of accuracy
- Monthly Close so you can report to your board and investors
- Accounts Payable & Receivables
- Credit & Collections
- Policies & Procedures
- Payroll Administration
- Employee Handbook & Labor Law Compliance
- Benefits Administration
- Stock Plan Administration
You could hire a PEO to manage all the HR activities or a staffing agency that handles the accounting believing they will scale with you, or even a smaller bookkeeping firm to handle your part-time demand, but you’ll still be short the guidance of an advocate ensuring both are acting in your best interests. So, you’ll need to add a part-time CFO to handle reporting, financial projections to name a few. Each step along the way eating away time and focus from product development and sales without ensuring confidence that operations are going to scale in a seamless fashion, whether you go from 5 to 10 employees or 50 to 100 employees.
Once you have secured your venture capital, it’s important to think strategically about the back office functions of your startup. Formulating a plan is critical, to not lose focus and time on product development so you can start to scale your company.