Start up CFO compensation

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Bb073084
Posts: 117
Joined: Sun Feb 03, 2019 10:24 am

Start up CFO compensation

Post by Bb073084 »

I have been approached a few times about start up CFO roles for post series B heathcare tech companies. The opportunities are usually with well funded and well connected organizations. Revenues have ranged from $50M - $150M all with strong YoY growth. I was curious what typical compensation would look like for such roles. Below are my thoughts but not sure:

Base - $300-400k
Bonus - 30-50%
Equity - 1-2%
Location - east and west coast

I am not sure on how common an employment contract would be for this level and key terms such as severance, length, accelerated vesting terms, etc… would be and hoped to receive some advice.

I have about 14 years experience in accounting and finance. I spent a fair amount of time at a very successful start up as the number 2 to the CFO.

Any feedback or examples would be appreciated!
dcw213
Posts: 218
Joined: Sun Dec 16, 2012 3:04 pm

Re: Start up CFO compensation

Post by dcw213 »

Your numbers seem reasonable to me. Friend of mine is a CFO for a midsize organization in a different, more established, and likely less lucrative industry and is a hair under your base comp with a 50% bonus.
WapelloHawk
Posts: 11
Joined: Thu Apr 08, 2021 4:22 pm

Re: Start up CFO compensation

Post by WapelloHawk »

Since when is $100mm in revenue a startup? Inflation really is rampant.

Anyway, regarding CFO comp, I would kind of cop out and say it depends on the type of CFO role and organization:

Higher pay scale: major personal involvement in acquisitions oriented growth, partner to CEO, plan to raise additional capital, etc.

Lower pay scale: operations focused company, strong experienced CEO already in place, self funding business through current operating cash flow.

For a $100mm rev company, your estimated numbers would lean more towards the higher pay scale in my experience.

12 months severance should be common /expected. I would expect all CFO jobs to have an employment agreement, but “term” is often at will and nothing longer than the severance.
Topic Author
Bb073084
Posts: 117
Joined: Sun Feb 03, 2019 10:24 am

Re: Start up CFO compensation

Post by Bb073084 »

Thank you. The roles have all been what you qualify as the higher scale. Appreciate the insight!
softwaregeek
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Joined: Wed May 08, 2019 8:59 pm

Re: Start up CFO compensation

Post by softwaregeek »

Equity seems high. 100m rev seems high for series b.
Skiandswim
Posts: 181
Joined: Tue Dec 21, 2010 3:24 pm

Re: Start up CFO compensation

Post by Skiandswim »

$50M - $150M in revenue does not seem to be post Series B, this is more a late stage firm that is looking for a strategic exit or IPO. For Series A-C type firms your compensation is on the high end, but equity is low. I have found 2-3% equity offers normal for CFO position is early stage firms with an anti- dilution clauses for 1-2 rounds (or $XM in added capital). Bonus? For early stage firms I have not supported bonuses - equity is the bonus. Job security is low, but the potential payoff is high. "But choose wisely"
demdeah26
Posts: 13
Joined: Mon Mar 29, 2021 8:26 am

Re: Start up CFO compensation

Post by demdeah26 »

Bb073084 wrote: Sun Jun 20, 2021 8:58 am I have been approached a few times about start up CFO roles for post series B heathcare tech companies. The opportunities are usually with well funded and well connected organizations. Revenues have ranged from $50M - $150M all with strong YoY growth. I was curious what typical compensation would look like for such roles. Below are my thoughts but not sure:

Base - $300-400k
Bonus - 30-50%
Equity - 1-2%
Location - east and west coast

I am not sure on how common an employment contract would be for this level and key terms such as severance, length, accelerated vesting terms, etc… would be and hoped to receive some advice.

I have about 14 years experience in accounting and finance. I spent a fair amount of time at a very successful start up as the number 2 to the CFO.

Any feedback or examples would be appreciated!
As the head of recruitment for a tech startup that does just north of 60m/yr, we hired ours last year on the low end of the base and a little less than half the bonus and equity ranges outlined.

For a company doing 100m, my gut would be you’re pretty in line with what you could negotiate, assuming they really like you. Bonus and equity might be a little high up front but imagine easily doable if given a 1-2 year schedule.

Also of note, we specifically brought in a guy we were familiar with and had a heavy M&A background. His purpose is more so preparing us for sale and acting as our agent in brokering the deal than it is building out our corporate FP&A structure. So we were lighter on the equity given if he did his job it would be a quick payoff. Not sure what these companies have outlined in terms of definitions for success but that obviously plays a factor in offer structure for a role like this.
Topic Author
Bb073084
Posts: 117
Joined: Sun Feb 03, 2019 10:24 am

Re: Start up CFO compensation

Post by Bb073084 »

demdeah26 wrote: Sun Jun 20, 2021 9:51 pm
Bb073084 wrote: Sun Jun 20, 2021 8:58 am I have been approached a few times about start up CFO roles for post series B heathcare tech companies. The opportunities are usually with well funded and well connected organizations. Revenues have ranged from $50M - $150M all with strong YoY growth. I was curious what typical compensation would look like for such roles. Below are my thoughts but not sure:

Base - $300-400k
Bonus - 30-50%
Equity - 1-2%
Location - east and west coast

I am not sure on how common an employment contract would be for this level and key terms such as severance, length, accelerated vesting terms, etc… would be and hoped to receive some advice.

I have about 14 years experience in accounting and finance. I spent a fair amount of time at a very successful start up as the number 2 to the CFO.

Any feedback or examples would be appreciated!
As the head of recruitment for a tech startup that does just north of 60m/yr, we hired ours last year on the low end of the base and a little less than half the bonus and equity ranges outlined.

For a company doing 100m, my gut would be you’re pretty in line with what you could negotiate, assuming they really like you. Bonus and equity might be a little high up front but imagine easily doable if given a 1-2 year schedule.

Also of note, we specifically brought in a guy we were familiar with and had a heavy M&A background. His purpose is more so preparing us for sale and acting as our agent in brokering the deal than it is building out our corporate FP&A structure. So we were lighter on the equity given if he did his job it would be a quick payoff. Not sure what these companies have outlined in terms of definitions for success but that obviously plays a factor in offer structure for a role like this.
Thank you. Very helpful example!
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