The CFO Role in Series Funding

Written by Amanda Bower    |    Published: August 15, 2023

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For startups and fast-growing businesses, funding is an essential resource that sustains their operations. It’s what allows them to develop new products, expand into new markets, and bring on top-notch talent. 

And let’s be real, without it, they could fail. That’s why nailing down series funding rounds is so critical and why having a CFO on board is crucial for success.

A CFO, or chief financial officer, is a financial guru who manages a business’s financial aspects to ensure long-term growth and success. They specialize in financial planning and analysis, financial reporting, compliance, cash flow management, risk management, and making tough financial decisions. And when it comes to securing series funding, they play a major role in the path to success.

Obtaining funding for a startup is no walk in the park. You need to demonstrate market value, viability, and traction among users, which requires rock-solid financial data, analysis, and practices. And let’s not forget about advanced series funding, which is like climbing Mount Everest in a blizzard—only a small fraction of startups succeed in getting Series A funding.

However, with a CFO in your corner, you’ll have the financial horsepower you need to make it through the series funding process unscathed. Many startups opt for a virtual CFO (also known as an outsourced CFO), which provides the same level of expertise at a fraction of the cost of an in-house CFO.

They’ll help you navigate the choppy waters of series funding and make sure you have the capital you need to crush it. With that in mind, here are some ways a CFO can help your startup during the series funding process.

Strategic Finance and Planning

First things first: with series funding comes the need for extensive strategic finance and planning. A CFO can work closely with the CEO, decision-makers, and other stakeholders to develop a startup’s financial strategy for a funding round. This might include analyzing the startup’s financial needs, determining the funding structure (for example, how much equity is up for grabs), and establishing financial goals and milestones.

The CFO is a valuable resource for startup leaders when it comes to creating long-term financial plans. They work closely with the executive team to determine the best use of funds once they are acquired. CFOs are skilled in creating forecasts and predicting cash flow needs, which can help identify where additional capital is needed the most.

Investor Relationships and Due Diligence

Series funding is nothing without investors. In the earliest stages (pre-seed), investors might be founders, friends, or family. 

In the seed round, investors can include angel investors or crowdfunding investors. In the later stages, raising capital often comes from venture capital firms, private equity firms, and hedge funds. 

These investors can bring a lot of money, connections, and valuable guidance to the table (in 2021, angel investments topped $29 billion). But unfortunately, investors can also be tough to win over, especially if a startup doesn’t have a prior relationship with them. 

A CFO can help bridge the gap between startups and the investors they’re vying after. CFOs typically have years (or decades) of experience working for the best financial institutions around. Because of this, CFOs are often well-suited for nurturing investor relationships (and perhaps even bringing connections to the table).

That’s not all—a CFO also typically plays a large role in the due diligence process. With this, a CFO can provide financial information, prepare financial statements and reports, and collaborate with legal and finance teams.

Risk Management

Risk management is another critical responsibility of a CFO when it comes to series funding. A CFO can conduct thorough assessments of financial risks that a startup might encounter during the process (which can include challenging relationships with investors, over-dilution of ownership, unexpected market challenges, and cash flow issues). Generally, a CFO can help a startup make the best-educated financial decisions possible, including taking on wise and beneficial investments. 

It’s also key to remember that for investors, investing in startups typically comes with financial risk. A CFO can provide clear, transparent information to investors and address any concerns they might have. This can contribute to investors gaining trust and confidence in a startup and its ability to manage its finances. 

Financial Analysis

Financial analysis and projections play a central role in the series funding process because investors often want to understand where a startup is heading before investing. They may want to see a certain degree of projected success to ensure their investment will benefit them. 

When seeking funding in more advanced rounds, financial analysis becomes especially important. Series B funding, for instance, is geared towards expanding and scaling operations, with the goal of achieving major milestones like an initial public offering. At this stage, investors expect solid financial projections and analysis showcasing the company’s ability to dominate markets, grow, acquire other companies, and achieve substantial growth.

Reporting and Compliance

Accurate and timely reporting is integral to successfully executing series funding, and your CFO can play a big role in it. For example, a CFO is typically responsible for preparing financial statements, including income statements, balance sheets, and cash flow statements, which play a role in fundraising. They also coordinate any external audit or reporting needs, such as regulatory filings or financial disclosures.

The CFO also plays a  crucial role in reporting financial information to investors during fundraising. They can regularly update the startup’s financial performance, including key metrics, milestones achieved, and future performance projections. 

Additionally, startups seeking series funding must comply with financial regulations and requirements. A CFO can ensure a company stays compliant and monitor any regulation changes. They can also work with legal and finance teams to ensure compliance with taxation, securities laws, and industry or location-specific regulations (such as state and local laws). 


Forecasting is another crucial aspect of the CFO’s role during the series funding process. This involves working closely with the executive team to determine financial needs, allocate raised funds, and develop growth plans and revenue projections. 

There are many aspects to forecasting that the CFO can take the reins of. For example, cash flow management is a crucial part of budgeting and a critical risk area for startups (one of the top reasons startups fail is because they run out of cash). 

The CFO can monitor cash flow to match the budget allocation and projection. This might include forecasting cash flow needs, monitoring cash inflows and outflows, and establishing cash reserves to prepare for shortfalls. By proactively managing cash flow, startups can align with their budget allocation and projections to ensure financial stability and success.

While It’s Not Always Necessary to Have a CFO to Raise Funding, It Surely Increases the Odds

Obtaining series funding is a significant milestone for startups as it can push them to new heights. However, it’s no easy task. 

While you can try to navigate the process alone, having a competent finance expert by your side can significantly increase your chances of success. Our Strategic Finance services are designed to meet your needs and exceed your expectations. 

With our team of top financial experts, you may not have to worry about hiring an in-house CFO. We are confident our services will be a valuable investment for your startup.

Contact us today to get started.

Further Reading

CFO Resources for Small Business Owners
CFO Resources for Startups
Outsourced vs Fractional vs CFO: Understanding the Difference

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