A VC's perspective on the modern CFO, with Nick Wijnberg
In this episode of "The Growth Minded CFO," hosts Alex and Lauren engage with VC partner at Lorimer Ventures and fractional CFO Nick Wijnberg to uncover the evolving role of CFOs in today's challenging business landscape.
As an ex-Wall Street banker turned company builder, Nick offers unique insights into the dual responsibilities of a fractional CFO and an investor, and the importance of forward-thinking financial strategies.
A VC Who 'Gets' the Startup Challenges
Transitioning from a banker to a hands-on operator has taught Nick the complexities involved in running a company. In startups, titles often blur as individuals take on a multitude of roles to reach business milestones.
"To earn that trust you really have to be in the trenches with them and to empathize. That's really how I felt about it...how can I empathize if I've never been in their seat before? So I really felt like I had to go and get my hands dirty in order to be in the trenches with the founders that I want to back."
The Dual Role: CFO and Investor
Navigating the roles of both a fractional CFO and investor, Nick provides insight into what he seeks when evaluating potential investments.
A critical component is the financial foresight for what could be, not just what is. He stresses the importance of CFOs embracing a forward-facing approach, where it's imperative to consider the future returns of any financial commitments made today.
"We can invest in companies pre-revenue, but they really need to have an understanding of what the revenue model would be. Oftentimes the finance is kind of like, 'don't ask about it, put it away. It'll sort itself out. I'll hire that function when I'm a Series A or Series B and let me just build'."
Frontline Finance Functions in a Changing Economy
As interest rates rise and capital markets tighten, Nick discusses how the role of the CFO is transitioning into a more central position within organizations. No longer confined to financial statements, finance professionals today must be present in strategic conversations, bringing data-driven insights to drive smarter decisions.
"I think a great CFO isn't just somebody who knows the numbers, but really can put the strategy behind the numbers...an intellectual sparring partner, not only to the founder, but also to the board at large. The CFO needs to have a perspective on where things are going and what would happen if things don't go right, what would have to change."
Preparing the Finance Function for Growth
For young finance leaders, Nick advises a proactive and detail-oriented approach, especially when gearing up for fundraising. By maintaining detailed and realistic financial models, finance leaders can effectively communicate their company's growth potential to investors, thus ensuring they are seen as reliable and forward-thinking partners in the journey to market dominance.
Key Takeaways from This Episode
Embrace forward-looking finance: Nick emphasizes the significance of being visionary as a CFO. It's crucial to focus not just on historical data but also on projecting the future success and understanding the ROI on investments.
Empathy in leadership: Having first-hand operational experience is invaluable. Nick highlights the importance of empathy and trust in building strong partnerships with founders and being an effective finance leader.
Adaptive finance roles: The role of the CFO is evolving to meet the demands of a rapidly changing economic landscape. Finance leaders must be prepared to be strategic partners present in core decision-making processes.
Preparation for growth: For finance leaders approaching fundraising rounds, the focus should be on creating detailed financial models and scenarios. This ensures credibility and demonstrates a disciplined approach to executing business plans.
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