When a software startup later put a CFO over its first finance hire, the first hire was still in the seat in 46% of cases (11 of 24).
The second hire comes a median 15 months after the first, and each hire after it comes sooner
- First to second
64 companies15 months - Second to third
46 companies11 months - Third to fourth
39 companies7 months - Fourth to fifth
29 companies7 months
View as a table
| Between hires | Median months | Companies |
|---|---|---|
| First to second | 15 | 64 |
| Second to third | 11 | 46 |
| Third to fourth | 7 | 39 |
| Fourth to fifth | 7 | 29 |
39% (30 of 77) of software startups had a second finance hire within a year of the first, and 59% (41 of 70) within two, counting only companies whose first hire is at least that old. So a year in, most were still on one person; two years in, most were not. Once the second hire lands, the function fills in faster: 11 months to the third, 7 to the fourth.
Some never make the second hire. 22% (18 of 82) of software startups have only one finance hire, and 9% (6 of 64) of those whose first hire started three or more years ago are still on one. 83% (15) of the 18 are a financial controller or head of finance, which is the shape a simple software business can hold for a long time.
The first seat sets the direction, and in software controllers and heads of finance build underneath
| First finance hire | Below | Same level | Above |
|---|---|---|---|
| CFO first | 79%15 of 19 | 21%4 of 19 | 0%top seat |
| Head of finance first | 75%9 of 12 | 0%0 of 12 | 25%3 of 12, all CFOs |
| Financial controller first | 70%7 of 10 | 0%0 of 10 | 30%3 of 10, 2 CFOs |
| Finance manager first | 3of 9 | 2of 9 | 4of 9, 2 CFOs |
| Accountant or analyst first | 0%0 of 14 | 29%4 of 14 | 71%10 of 14, 4 CFOs |
| All software startups | 53%34 of 64 | 16%10 of 64 | 31%20 of 64, 11 CFOs |
A senior first hire builds underneath: 76% (31 of 41) of the software startups that started with a CFO, head of finance or controller hired below. The controller row is where software differs. Across all startups, 54% (13 of 24) of controller-first companies hired above the controller, 11 of them a CFO; in software, 30% (3 of 10) did. That fits what I said on Behind The Story about companies that do not need a CFO straight away: they can run on “a fractional person and a really good financial controller or a really good head of finance that can look after the day-to-day.” With the capital questions covered from outside, the next internal seat is the one underneath.
In a software company that person needs the model as much as the ledger. As I wrote about why finance people bomb SaaS interviews, they should be able to explain why 5% monthly churn turns into a retention crisis, why CAC payback matters more than CAC, and why a 70% gross margin is the floor. Brief the hire below for that. A CFO first is the same story from the top: 79% (15 of 19) of CFO-first software startups hired below, and for the CFO that search is easier if candidates already know how they lead. As I wrote about visible finance leaders, people stepping up to be a CFO’s 2IC want to know the person at the top before they commit.
A junior first hire usually gets someone above: 61% (14 of 23) of those that started with an accountant or finance manager hired above, 6 of them a CFO. Often that is the first brief catching up with the business. As I wrote about first finance hire salary bands, a lot of founders under-hire, pricing the role against the complexity they have today rather than the complexity they will have in 12 months, and then they are hiring again.
Above or below your first hire?
Four yes-or-no questions about your finance function as it is today. One yes is enough.
- You still own the forecast, the board pack or the SaaS metrics?
- A raise, investor reporting or an acquisition in the next 12 months that nobody on the team has run before?
- Your first hire is an accountant or finance manager?
- You hired for the business you had then, and it has grown past that brief?
0 of 4 answered. Your answer appears here after the last one.
Not sure which way your next seat goes? Send me who is in the seat, what they own today and what the next round needs, and I will tell you.
Get a read on my finance hireIf you are being told to promote, or that AI means nobody below
“Promote your first hire into the CFO seat.” Sometimes that is right.5 It is the harder route. As I put it to Sam Nagra on Episode 9 of The CFO Track, “often the first CFO role isn’t necessarily with the same business, normally have to go elsewhere to get it.” And ask first. My CFO Track guest Sammy Michaels, now VP Finance at the software company Octopus Deploy, learned the hard way that not everyone wants to be promoted. If you promote, the second hire goes below and becomes the first person they manage.
“AI means you will not need anyone underneath.” It is shrinking that seat, and in software it is still the most common second hire: an accountant or analyst, in 27% (17 of 64) of companies. What changes is what you hire it for. As AI takes the manual and technical work, what separates great finance people from good ones is being able to communicate and business partner: helping the rest of the company act on what the numbers mean.
When a CFO goes over the first hire, the first hire is still there about half the time: 46%
Of the 62 software startups whose first finance hire was below CFO, 39% (24) later hired a CFO. The first hire was still in the seat when the CFO started in 46% (11 of 24). In another 46% (11) they had already gone, one of them in the month the CFO arrived, and 2 cannot be placed because the dates are recorded to the year only. Across all startups the first hire was still there in 54% of cases (35 of 65), so in software the CFO more often arrived to an empty seat.
When the CFO was the second hire itself, the pattern is steadier. That happened 11 times; the first hire was still there in 82% (9), and 8 of those 9 were still there a year later. A CFO brought in early, over a first hire who knows it is coming, usually keeps them.
The CFO seat is a different job from the first one: the raise, the board and the investors move onto it. If that is the search you are about to run, tell the person already in the seat before it starts, and brief the CFO on how the two of them will split the work.
A same-level second hire is often a replacement: in 40% (4 of 10), the first person had left by the month the second started.
If the next search is a CFO over a sitting finance lead, I set out how to run a CFO search in Australia.
How Sonder, CarExpert and Inspace made their second finance hire: a CFO above, then two hires below
Sonder
A CFO above the FP&A manager three months in, and the FP&A manager stayed
- Business
- Workplace wellbeing and safety app, founded 2016
- First finance hire
- FP&A manager, Mar 2019, the earliest we could find
- Against the first roundVs first round
- 3.5 years before the first round we could confirm
- Next finance hire
- CFO, Jun 2019, above
- Now
- A CFO-led team with FP&A, a controller and an accountant (Sep 2026)
The earliest finance hire we could find at Sonder was an FP&A manager in March 2019. Three months later it hired a CFO above them, a second hire far quicker than the 15-month median.
The FP&A manager stayed another 18 months, to December 2020, and a management accountant joined underneath in July 2020. The first CFO held the seat for five years, through an A$35 million Series B led by Blackbird in September 2022.
A CFO over a first hire three months in did not cost Sonder the first hire. Build underneath both of them once the CFO lands.
CarExpert
A CFO first, and a finance manager under them seven months later
- Business
- Car reviews, news and vehicle marketplace, founded 2020
- Rounds
- Series B, Oct 2023 (A$3M)
- First finance hire
- CFO, Sep 2023
- Against the first roundVs first round
- 1 month before the Series B
- Next finance hire
- Finance manager, Apr 2024, below
- Now
- Both in role (Sep 2026)
CarExpert’s first finance hire was a CFO in September 2023, a month before a Series B that the report linked to plans for an IPO and a launch in Asia. A CFO hired into that moment is there for the investors and the listing work.
So the second hire went underneath: a finance manager in April 2024, seven months after the CFO and well inside the 15-month median. Both are still in their seats. It is the most common direction in the software data: 79% (15 of 19) of CFO-first companies hired below.
Start with a CFO and the next hire goes underneath. Budget for it inside the first year, or the CFO does the month end.
Inspace
A head of finance first, and a finance manager underneath seven months later
- Business
- Workplace design and space planning software, founded 2017
- First finance hire
- VP finance and operations, Jul 2023
- Against the first roundVs first round
- 21 months after the pre-Series A
- Next finance hire
- Finance manager, Feb 2024, below
- Now
- Finance manager in role (Sep 2026)
Inspace made its first finance hire, a VP of finance and operations, in the month of its A$6 million round in July 2023. The second came seven months later, a finance manager underneath: the head-of-finance-first pattern, and quicker than the median.
The VP left in October 2024, 15 months in. The finance manager is still there and is the only finance employee on the public record since.3
Hire the person below as if they may one day carry the function on their own.
Against the other sectors, software’s second hire goes below most often
| Second finance hire | Software | All startups | Fintech | Deep tech |
|---|---|---|---|---|
| Second hire below the first | 53%34 of 64 | 49%77 of 156 | 45%15 of 33 | 49%23 of 47 |
| Second hire a CFO above the first | 17%11 of 64 | 19%30 of 156 | 15%5 of 33 | 26%12 of 47 |
| Controller first, second hire above | 3of 10 | 13of 24 | 2of 5 | 7of 8 |
| First hire still there when a later CFO started | 46%11 of 24 | 54%35 of 65 | 60%9 of 15 | 62%13 of 21 |
The clock barely moves between sectors: a median 15 months to the second hire in software and fintech, 16 across all startups and 17 in deep tech. The direction is what differs. Software controllers got someone above least often, and when a CFO did arrive over a first hire, software had the lowest share of first hires still in the seat. Each sector has its own page: all startups, fintech and deep tech. The other software benchmarks: before or after the raise, how long after a raise and what to hire first. The CFO decision itself is in when a SaaS company needs a CFO.
Common questions
Should a software startup's second finance hire be more senior or more junior than the first?
Usually more junior, depending on the first seat. Of the 64 funded Australian software startups we tracked that made a second finance hire, 53% (34) hired below the first person, 16% (10) at the same level and 31% (20) above, 11 of them a CFO. 76% (31 of 41) of those that started with a CFO, head of finance or financial controller hired below; 61% (14 of 23) of those that started with an accountant or finance manager hired above.
How long after the first finance hire do software startups make the second?
A median 15 months (n=64), with the middle half between 6 and 26 months. 39% (30 of 77) of software startups made it within a year of the first and 59% (41 of 70) within two, counting only companies whose first hire is that old. Later hires come sooner: a median 11 months to the third and 7 to the fourth.
What happens to the first finance hire when a software startup hires a CFO above them?
About half the time they are still there. Of the 62 software startups whose first finance hire was below CFO, 39% (24) later hired a CFO. The first hire was still in the seat when the CFO started in 46% (11 of 24), had left in 46% (11) (one of them in the CFO's first month), and 2 cannot be placed because the dates are recorded to the year only. Across all startups the first hire was still there in 54% of cases (35 of 65).
How many software startups stop at one finance hire?
22% (18 of 82) of those we tracked have made only one finance hire so far, and 9% (6 of 64) of those whose first hire started at least three years ago. 83% (15) of the 18 are a financial controller or head of finance, usually with outside help around them.
Notes
- It does not show that hiring finance earlier or later causes a better outcome. It records the order things happened in. The only outcome test so far was run on the first 102 companies in the study, before it grew to 194. There, the share that raised again within 24 months of the first finance hire ran 55% when the hire came before any round (27 of 49), 47% at Series A (7 of 15) and 33% at Series B or later (2 of 6), and none of those differences could be told apart from chance (Fisher exact test, p=0.77 and p=0.41). Outcomes have not been collected for the full 194, and companies that hire early and companies that raise again are often the same well-organised companies, so no timing figure in this series is an argument for a timing.
- It is a survivor set. Every company announced a round and has at least one finance employee we could find, so the study describes companies that did build an internal finance function. In the 93 of the first 102 companies with a usable status there was not one insolvency, administration or wind-up. It cannot say what share of Australian startups have no finance lead at all.
- Outsourced and fractional finance is invisible. A virtual or fractional CFO supplied by a firm does not list the startup as an employer, so it never appears in public employment records. 16 of the 191 first hires we tracked (8%) were visibly fractional, part-time or interim, and that is a floor. Every “had no finance hire” figure means no internal hire we could find, among the companies we tracked.
- There is no headcount at the time of the hire. Only today’s headcount is public, so nothing here says “they hired a CFO at 40 staff”. The companies run from roughly 2 to 500 staff today.
- Titles are counted once. Each person is recorded at the earliest finance title they held at the company, so a controller promoted to CFO in the same business reads as a controller. Every “later added a CFO” figure is a floor.
- Rounds are dated by announcement. An announcement usually trails the close by weeks, rounds that were never announced are invisible, and grants and research funding are not in the round series. Round amounts are the least reliable field and no figure in this series rests on one. For 12 companies with names too common to search cleanly, past-staff coverage is a floor.
- It is not the market report. Story’s earlier market report on the first finance hire measured something different, the share of recently funded companies with a finance leader at each stage, so its figures and these do not compare directly.
- Sector is tagged from the product. “Tech” here means software and internet businesses; fintechs and deep tech companies are counted on their own pages, so the software figures and the all-startups figures overlap but are not the same set. Where a row or column holds fewer than 10 companies, the tables show counts only.
The full method, including how rounds were double-checked and how same-named companies overseas were excluded, is in the study’s methodology section.
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.