Finance as Strategy: When and How Startups Should Build a Finance Function

watch time: 17 minutes

Product and engineering lead the way with tech startups, as should HR, but unfortunately, this often means finance comes very last. Yet finance should come first — or at least much, much sooner — argues Caroline Moon, who runs a16z’s financial operations practice (part of our corp dev team) for guiding startups.

Finance is — and should be! — much more strategic than just bookkeeping. Speaking of, what is accounting? Startups should treat financial data much the same way they do product data: not just tracking and analyzing everything about it against KPIs, but also building out the data streams in a way that gets you answers to key questions. In fact, why not think of finance in much the same way one thinks of product management and product managers — or as an agile process running on top of the company, making sure everything is moving in the right strategic direction?

Moon doesn’t stop there, though, sharing other helpful analogies to help technical and first-time CEOs think through the importance of finance, and more importantly, how to structure and when to build out a finance function (no matter what stage you’re at). Especially because finance ties together all the things that startups run on: people, products, and cash.

 

image credits: purchased via istockphotos, Pexels, Shutterstock