A startup finance team is built in order, not to a headcount target: outsourced help first, then one internal controller or head of finance with a bookkeeper underneath, then usually only one or two finance people at 50 staff and two or three near 100. The CFO comes last.
Finance stays lean for longer than you think
Founders picture the finance team they will need at scale and start building towards it. The real thing is much smaller. Finance is always lean in a startup, and I put numbers on it on Celia's Corner:
“In a 50-person business, you're probably not going to have more than one or two finance people... getting closer to 100, you might only have two or three maybe.”
That is the whole structure question in one line. Product, sales and customer teams hire in drives. Finance adds one person at a time, and each one has to be the right seat, because there is no bench behind them. The job is picking the next seat, and knowing which work sits with an outside provider instead.
The shape at each stage
This is my read from the first finance hires and first CFOs I place.1 Read the rows as a sequence. Business model moves the CFO row more than anything else does.
| Who is in the team | Why it works at this stage | |
|---|---|---|
| Before the first internal hire | Founder, bookkeeper and external accountant, often with a fractional or virtual CFO for a raise | Gets the house in order before going to market without a full-time salary. Most of this work is invisible in public hiring records. |
| First internal hire (roughly 10 to 50 people) | A Financial Controller or Head of Finance, with an outsourced bookkeeper for AP, reconciliations and payroll | One senior person on the higher-end work, transactional work underneath. Not one person doing everything, not several full-timers too early. |
| Around 50 people | One or two finance people | Usually the first hire plus an accountant or analyst, still with outsourced processing. |
| Getting close to 100 | Two or three finance people | Controls, reporting and planning start to need separate owners. The transactional layer is often offshore or automated. |
| The CFO layer | A CFO on top of what exists. Series A for deep tech and lending or payments fintech; Series B for single-product SaaS | Capital, investors and governance need an owner once the business spans products, countries or institutional investors. |
Source: my first finance hire and first CFO searches at Story Recruitment.
Before the first internal hire: outside help, on purpose
The first finance capacity in most startups is a bookkeeper, an accountant and, often, an outsourced fractional or virtual CFO. What often happens before someone hires in finance, as I said on Celia's Corner, is that a founder brings in an external party to help get the house in order, usually ahead of a raise. That is a sensible structure, not a gap.2
The trigger to go in house is rarely a headcount number. It is when the financial decisions start taking a real share of your week away from the things you are actually good at, and when the board expects monthly reporting you cannot produce without a late night. Founders tend to wait until they are drowning. Move a quarter earlier than that.
For the stage signals that say a CFO, not just a first finance person, is due, I set out when to hire a CFO.
The classic first structure: one controller, one bookkeeper
The most common model I see, and the one I see work best from roughly 10 to 50 people, is a Financial Controller or Head of Finance doing a bit of everything at the higher end, with an outsourced bookkeeper handling accounts payable, reconciliations and payroll. It is not the controller doing everything, and it is not several full-time people too early. It keeps your most expensive finance person on expensive work.
The two titles in that seat are not the same role. The way I described it on the podcast:
“Financial controller is more around as in the name, financial controls and compliance and reporting, where a head of finance is probably going to be a little bit more broadly across the forward-looking tasks. Like financial modeling or FP&A.”
If the next twelve months are about a raise or a plan, you want the head of finance shape. If they are about making the numbers trustworthy, the controller shape is the right buy. One signal to watch in yourself: if you expect a controller to do all the bookkeeping with no support underneath, the brief is really asking for a bookkeeper, and a good controller will read it that way.
Part of that first structure is not optional. ASIC requires a company to keep proper financial records, and the directors carry that duty personally. A bookkeeper keeps the past tidy. The first finance hire builds the reporting, controls and systems the next three years run on, which is what Kaycee Singh, who built a tech finance function from zero took me through on The CFO Track.
If you are choosing between those two seats, I compare CFO vs financial controller vs head of finance with the share of startups that hired each one first.
What 191 startups actually hired, in order
Story Recruitment's study of 194 funded Australian startups dated 966 finance hires from public professional profiles against each company's announced funding rounds. 191 of the companies have at least one dated finance hire. Three things in it bear directly on structure.
The first seat is usually below CFO. Of the 191 companies we tracked, 71% (135) made their first finance hire below CFO. Of those 135, 48% (65) later added a CFO above that person, a median 26 months after the first hire. The other 70 have not so far.3
The second seat is usually below the first. Of the 156 companies with a second finance hire, the most common second seat was an accountant or FP&A analyst at 33% (52 of 156), then a CFO at 28% (43), a finance manager at 14% (22), a head of finance or finance director at 13% (21) and a financial controller at 12% (18). In other words, the team most often grows downwards, with someone to take transactional and analysis work off the first hire, before it grows upwards.
| Second finance hire | Companies | What that seat usually takes on |
|---|---|---|
| Accountant / FP&A analyst | 52 of 156 (33%) | Month end, analysis and reporting off the first hire's desk |
| CFO | 43 of 156 (28%) | A senior seat added above a first hire who started below CFO |
| Finance Manager | 22 of 156 (14%) | Day-to-day finance operations and the close |
| Head of Finance / Finance Director | 21 of 156 (13%) | Planning and running the function |
| Financial Controller | 18 of 156 (12%) | Controls, compliance and statutory reporting |
Each later hire tends to come sooner. Among the companies we tracked, the median gap from the first finance hire to the second was 16 months (n=156), then 11 months to the third (n=120), 8 to the fourth (n=107) and 7 to the fifth (n=83). 18% (35 of 191) have made only one finance hire so far, and 43% (83) have made five or more. The function sits at one person for a long stretch, then fills in faster once it starts.4
The full title mix by sector, how long first hires stay and where they came from are in your first finance hire: which seat Australian startups fill first.
When the CFO layer goes on top
The CFO is the last piece, not the first. When that seat is due depends on the business model more than the headcount. As I put it on Celia's Corner:
“If it's a Deep Tech business, then it might be series A. Or if it's a Fintech that's got a big strong component on lending or payments, then it might be series A again. But if it's a SaaS business that's one jurisdiction, one location, one product, then it probably doesn't need a proper CFO until series B.”
Put a CFO on top before the base exists and you have a leader with nothing to lead: no reporting engine to draw on and no transactional layer underneath, so they either build process the business does not need yet, or leave. And plan for the CFO you hire at Series B not being the one who takes you to an IPO. The requirements change once institutional investors are on the register, and the person who built the function is not always the person who scales it.
What the finished structure looks like is still leaner than most founders picture. One client of mine runs finance with a CFO, a financial accountant and a management accountant in Australia, an outsourced transaction processing team offshore, and outsourced payroll in each overseas region.[1] The strategic layer stays small and local; the transactional layer is where the headcount, and the outsourcing, sits.
Where AI changes the structure, and where it does not
The layer that is shrinking is the one below the first hire. Ledger work, AP and AR, reconciliations: in the calls I have with founders, more of that is being automated or sent offshore, and early-stage businesses are not hiring people to do it in house. The first finance hire is not shrinking, because someone still has to understand what the output means. That pushes the second hire later and makes it more analytical than it used to be, which fits the study: the most common second seat is already an accountant or FP&A analyst, not another transactional role.
For what that first person builds in their first year, see what a CFO does in a startup.
Common questions
How big should a startup finance team be?
Smaller than most founders expect. In Tom Hunter's experience placing first finance hires in Australia, a 50-person startup usually has one or two finance people and a business closer to 100 has two or three. The question is which seat to hire next, not how many people to have.
What should the first finance team structure look like?
The most common model is one Financial Controller or Head of Finance doing the higher-end work, with an outsourced bookkeeper handling accounts payable, reconciliations and payroll. Before that, most startups run on a bookkeeper, an external accountant and often a fractional or virtual CFO for a raise.
What is usually the second finance hire in a startup?
In Story Recruitment's study of 194 funded Australian startups, 156 had made a second finance hire. The most common second seat was an accountant or FP&A analyst at 33% (52 of 156), then a CFO at 28% (43), a finance manager at 14% (22), a head of finance or finance director at 13% (21) and a financial controller at 12% (18).
How long between finance hires in a startup?
Among the companies Story Recruitment tracked, the median gap from the first finance hire to the second was 16 months (n=156), then 11 months to the third (n=120), 8 to the fourth (n=107) and 7 to the fifth (n=83). 35 of 191 companies have made only one finance hire so far.
When does a CFO join the finance team?
Last. Tom Hunter's read is that a deep tech business or a fintech built on lending or payments may need a CFO around Series A, while a single-product, single-market SaaS business often does not need a proper CFO until Series B. In the study, 48% (65 of 135) of the companies whose first finance hire was below CFO later added a CFO, a median 26 months after that first hire.
Notes
- The headcount bands by stage, and the right-hand column of the second-hire table, are my read from the first finance hires and first CFOs I place, not study data. The study records when people were hired, not how many staff the company had at the time.
- The companies were found through their finance people, so the figures describe startups that did build an internal finance function, not every startup. A fractional or outsourced CFO supplied by a firm does not appear in public employment records at all, so a lot of finance work never shows up in public hiring records, and “no internal hire yet” is not the same as “nobody doing finance”.
- Some of the 70 are too recent to have reached that point.
- The data shows order and timing. It does not show that any order produces a better company.
References
- A structure I know well from one of the businesses I work with. How the seat itself changes between start-up, scale-up and multinational is in my Finance Manager salary report.
These guides set out how we see it, drawn from the searches we run and the finance leaders we work with. They are general information about the market, not financial, accounting or legal advice, and they are no substitute for advice on your own circumstances.