Your First Finance Hire: What Role to Fill First
A practical guide to deciding between bookkeeper, fractional CFO, controller, or VP Finance based on your startup's actual needs.
You've been managing the finances yourself—checking bank balances, forwarding receipts to a tax accountant, maybe updating a budget spreadsheet when you remember. But things are getting complicated. Investors want reports. You're not sure about your runway. The books are a mess.
It's time for your first finance hire. But what should that be? A bookkeeper? A CFO? Something in between? The answer depends on your specific situation, and getting it wrong can be expensive—either overspending on capability you don't need or under-investing and leaving critical gaps.
This guide helps you understand your options and make the right choice for your startup's current stage and needs.
The Core Question
What do you actually need: someone to do the work (transactional), someone to think about the work (strategic), or both? Most early-stage startups need primarily transactional help with some strategic guidance, but the balance shifts as you grow.
When to Make Your First Hire
Before deciding what to hire, confirm that you need to hire at all. Here are clear signals that it's time:
Time Signals
- You're spending 5+ hours/week on finance
- Month-end takes longer than a few hours
- Financial questions delay decisions
- Board prep consumes a full day or more
Quality Signals
- Your books are consistently behind
- You're surprised by cash balances
- You can't confidently answer investor questions
- You're making decisions without financial data
Stage-Based Guidelines
| Stage | Team Size | Typical Need |
|---|---|---|
| Pre-seed | 1-5 | DIY or minimal bookkeeping |
| Seed | 5-15 | Bookkeeper + possibly fractional CFO |
| Series A | 15-40 | Bookkeeper + fractional or first FT hire |
| Series B | 40-100+ | Finance team (2-5 people) |
Understanding Your Options
Let's break down the four main options for your first finance hire, from least to most senior. Each serves different needs and comes at different price points.
Quick Comparison
| Role | Primary Focus | Cost Range | Best For |
|---|---|---|---|
| Bookkeeper | Transactions | $500-3K/mo | Clean books |
| Fractional CFO | Strategy + Operations | $2-10K/mo | Strategic guidance |
| Controller | Accounting operations | $120-180K/yr | Day-to-day management |
| VP Finance/CFO | Strategic leadership | $200-350K+/yr | Executive-level strategy |
Option 1: Bookkeeper
A bookkeeper handles the transactional foundation of your finances: recording transactions, reconciling accounts, categorizing expenses, and maintaining your books.
What a Bookkeeper Does
- Record and categorize transactions
- Reconcile bank and credit card accounts
- Process accounts payable
- Generate basic financial reports
- Prepare for tax filing
- Track receipts and documentation
- Manage invoicing (sometimes)
- Support monthly close
What a Bookkeeper Doesn't Do
- Strategic financial planning or analysis
- Build financial models or forecasts
- Advise on business decisions
- Prepare board decks or investor materials
- Handle complex revenue recognition
Cost and Engagement Models
Outsourced Bookkeeping Service
$500-2,500/month depending on complexity
Services like Pilot, Bench, or local firms. Good for standardized needs.
Part-Time Bookkeeper
$25-50/hour, typically 10-20 hours/month
More customizable but requires management. Good for specific needs.
When Bookkeeper Is Right
Choose a bookkeeper first when your primary problem is messy or missing books. You need clean financial data before you can do anything strategic. Every other finance role builds on top of solid bookkeeping.
Option 2: Fractional CFO
A fractional CFO is a senior finance executive who works with your company part-time. They provide strategic financial leadership without the full-time commitment and cost.
What a Fractional CFO Does
- Financial planning and forecasting
- Cash flow management and runway planning
- Board deck and investor materials
- Fundraising preparation and support
- Unit economics and metrics analysis
- Budget development and monitoring
- Oversee bookkeeping and accounting
- Strategic financial advice
What a Fractional CFO Doesn't Do
- Day-to-day bookkeeping (they oversee it)
- Full-time availability
- Tax preparation (they coordinate with CPAs)
- Everything a full-time CFO would do
Cost and Engagement Models
| Engagement Level | Hours/Month | Monthly Cost |
|---|---|---|
| Light touch | 5-10 hours | $2,000-4,000 |
| Standard | 15-25 hours | $3,500-7,000 |
| Heavy (fundraising) | 30-40 hours | $7,000-12,000 |
When Fractional CFO Is Right
Choose a fractional CFO when you need strategic guidance and can't justify a full-time CFO. Ideal for seed to Series A companies, especially those preparing to fundraise. You typically pair a fractional CFO with a bookkeeper for full coverage. Learn more about fractional CFO costs.
Option 3: Controller
A controller manages your day-to-day accounting operations. They're more senior than a bookkeeper and can handle complex accounting, but they're not typically strategic advisors.
What a Controller Does
- Manage the month-end close process
- Oversee bookkeeping staff
- Handle complex accounting (rev rec, accruals)
- Prepare financial statements
- Manage accounts payable/receivable
- Implement internal controls
- Coordinate with auditors and tax CPAs
- Maintain accounting systems
What a Controller Doesn't Typically Do
- Strategic financial planning and analysis
- Investor relations and fundraising
- Business strategy and executive advising
- Lead board presentations
Cost
A full-time controller typically costs $120,000-$180,000 in salary plus benefits, depending on experience and location. Total loaded cost is often $150,000-$220,000.
When Controller Is Right
A controller makes sense when you have enough accounting complexity and volume to justify a full-time accounting professional. This typically happens post-Series A, when you have complex revenue recognition, multiple entities, or are preparing for audit. Many companies pair a controller with a fractional CFO for both operational and strategic coverage.
Option 4: VP Finance or CFO
A full-time VP Finance or CFO provides executive-level financial leadership. They're part of your leadership team, not just a service provider.
What a VP Finance / CFO Does
- Lead all financial strategy
- Own investor relations and fundraising
- Serve on executive team
- Present to board
- Build and lead finance team
- Drive strategic initiatives
- Partner with CEO on company strategy
- Handle M&A and complex transactions
Cost
Full-time CFOs typically cost $200,000-$350,000+ in base salary, plus bonus and significant equity (0.5-2%+ depending on stage). Total compensation can exceed $400,000-$500,000 for experienced candidates.
When Full-Time CFO Is Right
Most startups don't need a full-time CFO until Series B or later. Premature hiring wastes equity and often leads to poor fit—senior CFOs from larger companies may not thrive in early-stage chaos. Consider this when you have: (1) complex financial operations, (2) ongoing fundraising needs, (3) team of 50+, or (4) path to IPO or M&A. See When to Hire a Full-Time CFO.
Decision Framework
Use this framework to determine what you need based on your primary pain points:
"My books are a mess"
Start with: Bookkeeper (outsourced or part-time)
You need clean data before you can do anything else. Get the foundation right.
"I need strategic guidance and fundraising help"
Add: Fractional CFO (alongside your bookkeeper)
Get senior expertise without the full-time cost. Ideal for fundraising prep.
"My accounting is getting complex and needs daily attention"
Consider: Controller (full-time)
When you have revenue recognition, audit prep, or enough complexity for a dedicated role.
"I need executive-level leadership and a real finance team"
Hire: VP Finance or CFO (full-time)
Typically Series B+ or when you need someone on the exec team full-time.
Common Combinations
Seed Stage
Outsourced bookkeeper + fractional CFO (as needed)
Monthly cost: $2-5K
Series A
Bookkeeper + fractional CFO (regular engagement)
Monthly cost: $5-10K
Late Series A
Controller + fractional CFO
Monthly cost: $15-20K
Series B+
Full-time CFO + controller + staff accountant
Monthly cost: $30-50K+
Hiring Tips
Once you've decided what role to hire, here's how to find the right person:
For Bookkeepers
- Look for startup experience: They should understand accrual accounting and startup-specific needs
- Test their QuickBooks/Xero skills: Proficiency in your software matters
- Check responsiveness: You need timely communication, not just accurate books
- Start with a trial period: See how they handle your actual transactions
For Fractional CFOs
- Verify relevant experience: Have they worked with your stage and business model?
- Assess communication style: Can they explain finance to non-finance people?
- Understand their capacity: How many other clients do they have?
- Check references: Talk to other startup founders they've worked with
For Controllers and CFOs
- Stage fit matters: Someone from a Fortune 500 may struggle at a 20-person startup
- Look for builders: They should be excited to build, not just manage
- Test technical skills: Give them a modeling exercise or case study
- Assess cultural fit: They'll be part of your leadership team
Common Hiring Mistakes
- Hiring too senior before you have the infrastructure to leverage them
- Hiring too junior when you actually need strategic guidance
- Not checking references specific to startup experience
- Underestimating the importance of communication skills
Related Articles
Scaling Your Finance Function
Complete guide from seed to Series B
Finance Team Structure
Building your team as you grow
CFO vs Controller vs Bookkeeper
Understanding the differences
Fractional CFO Guide
Everything about fractional CFO services
Need Help Deciding?
Eagle Rock CFO provides fractional CFO services for seed and Series A startups. Let's discuss what your startup needs right now.
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