Dear SaaStr: When Should You Make Your First Finance Hire?
Even with all the great AI and other tools out there in finance now — if you are growing quickly, you should make your first finance hire earlier than most founders think.
Here’s the breakdown:
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At $1M–$2M ARR, hire a full-time Director of Finance if you’re growing quickly.
Once you’re at $1M ARR, things start to get messy fast. You’ve got invoices to manage, collections to track, and recurring revenue to account for. Outsourcing finance might still work here, but it starts to break down if you are growing fast. A Director of Finance can handle all of this and set up scalable processes for growth. If you’re growing quickly—say, 10–12% MoM—you need someone full-time at this stage. Don’t wait until you’re drowning in complexity. -
If you’re pre-revenue or very early, consider part-time help.
At the pre-seed or seed stage, you don’t need a full-time finance hire yet. But you do need someone part-time to help with basic bookkeeping, cash flow management, and financial modeling. This could be a fractional CFO or a finance consultant. Just make sure they have SaaS experience—recurring revenue accounting is very different from traditional businesses 57. -
By $10M ARR, you’ll need a full-time VP of Finance.
Once you hit $10M ARR, the complexity of your business will demand a senior finance leader. This person will own everything from revenue recognition to fundraising support to financial planning. If you’ve raised significant VC funding—say, $20M+—you’ll need this hire even earlier to ensure your metrics are rock-solid for investors . -
Don’t over-hire too early. Especially a “CFO” When You Really Need a VP.
A common mistake is hiring a CFO too soon. At $2M–$20M ARR, a strong VP of Finance is usually enough. A CFO is more strategic and expensive, and you don’t need that level of expertise until you’re scaling toward $50M+ ARR or preparing for IPO-level complexity. Hiring a CFO too early can lead to overbuilding your finance team, which gets expensive fast. And most CFOs today need large teams and want to work a lot on strategy. You can make that hire early, if you have the capital. But a true CFO? Even $50m ARR is sometimes too early these days.
The bottom line: If you’re at even $1M-$2M ARR but growing quickly, hire a full-time finance exec as soon as you can find a good one. If you’re pre-revenue, get part-time help. And if you’re at $10M ARR or raising big rounds, it’s time for a VP of Finance.
