Benefits of hiring a Virtual CFO when raising capital

Virtual CFO

7 June 2022

When raising business capital, a Virtual CFO can help prepare your business for valuation and attract the right investors.

A Virtual CFO is an outsourced financial expert who works remotely. They oversee a company's financial activities and perform the regular accounting and business advisory duties of a traditional business adviser, except that they work remotely.

On top of evaluating your financial records, a Virtual CFO can also help identify the best way to raise money for your business.

Leveraging their experience in the market, a Virtual CFO can provide helpful suggestions on what can work for you, according to the size and nature of your business. From crowdfunding to grants to investors, they have the expertise to help you navigate the capital raising options available.

So, if raising capital is something your business is considering in the near future, read on to learn how you could benefit from hiring an experienced Virtual CFO.

Financial expertise and skill sets

The financial expertise of a Virtual CFO can make or break the success of raising capital for your business.

Virtual CFOs consult across business types and industries, so they have vast experience helping businesses prepare to raise capital and extensive networks built from working across multiple businesses.

One of the things investors look for before investing in a business is the business records. Well-kept financial records are critical when convincing investors that your business is worth investing in. A Virtual CFO can help ensure the information is updated, accurate, and presented in the right way.

Valuation methods

There are many types of valuation. These include asset-based valuation, market valuation, and historical earnings valuation.

A Virtual CFO evaluates the current position of your business in terms of assets and earnings and helps you determine the most applicable valuation method that is most likely to work in your favour.

Documentation and reporting

In addition to financial documents, there are other vital documents that potential investors may need to see that a Virtual CFO can assist with, including sales reports, business ownership documents and insurance documents.

Once you have investors onboard, it's your obligation to send them well-prepared financial documents showing the current status of your business. A Virtual CFO will help prepare timely reporting for shareholders, who need to know the performance of their investments.

Independence

Using a Virtual CFO helps provide an independent external view to your capital raising based on facts and experience.

Business founders and owners tend to view their business through rose coloured glasses. As a consultant independent of your business, a Virtual CFO can help remove bias from the process and ground you in reality.

Raising capital becomes smoother when presented by someone with verifiable skills backed up by clear information and documentation.

Flexibility

A high level of flexibility is advantageous when raising capital as it helps to ensure you can engage the services you need, when you need them. 

Virtual CFOs work on an agreed contractual basis, so you don't pay full-time salaries as you would do with an in-house team. Let's say you only need a business valuation service expected to run for one or two weeks only, then you’ll only pay for the time worked.

Better decision making

Decision-making is much easier when you have all the information you need at hand. A Virtual CFO can give you the best business insights to improve your decision-making processes. Furthermore, they can help you in making vital decisions such as:

  • The number of investors you need.

  • The amount of capital you should raise.

  • How you will spend the amount you raise.

  • The method of raising capital.

Such decisions are critical to every business, and they become more manageable when you have someone to help you. If you need more capital but don't know where to start, a Virtual CFO may help you make some critical decisions.

Productivity

It's time-consuming to make capital raising arrangements and preparations. It's even harder when you don't have a supportive team. 

Instead of taking valuable time away from running your business, a Virtual CFO can help free you of the financial stress and duties, and take the pressure off your team so they can focus on their core activities and boost the overall productivity of your business.

Final comments

Hiring a Virtual CFO is an important step regardless of the size of your business. But it’s particularly important for businesses who are planning to raise capital to fund their growth.

In interactions like those, you usually only get one bite at the apple so hiring the services of a professional to oversee and manage the process just makes sense.

Findex has a team of experienced Virtual CFOs ready to deliver accounting and business advisory services and help your business accomplish its goals within the set timeframe. Learn more here and get in contact with our team for assistance.

Author: Nick Park

Nick is an experienced adviser specialising in business consulting, outsourcing accounting and family advisory. Nick is regularly engaged by prominent and high growth global and local businesses and ultra high net worth clients to act as their chief accountant and adviser. Nick is a Chartered Accountant and holds a Bachelor of Commerce (University of Sydney) and Master of Tax (University of NSW).