Strategic Finance leaders are most often recruited through their professional networks, so CEOs and executive team leaders should be sure to ask their company’s investors to identify and introduce potential candidates. Executive recruiting firms can also help but typically use a broader scope to identify recruits (e.g., a CFO or VP Finance that oversees Accounting, FP&A and Strategic Finance).
Hiring Managers and Associates
After a Strategic Finance leader has been hired, that person will need to build a team of mid-level and junior folks under them. For these positions, strong financial modeling skills and data fluency are critical, so these individuals are usually recruited out of investment banking or other Strategic Finance teams. Head-hunting firms that focus on placing entry-level investment banking or consulting candidates into private equity, venture capital, or hedge fund roles, like Glocap or Amity, can be very helpful.
These candidates can also be sourced from your professional network or with the help of your investors. VC Associates will usually have great recommendations so be sure to leverage them.
If you are building a Strategic Finance function from scratch, I recommend you target candidates with 4+ years of experience (investment banking + operating/investing) vs. hiring straight out of investment banking. It’s better to have direct reports that can hit the ground running faster vs. needing to train a candidate straight out of an investment bank.
Strategic Finance works best when the team is lean. The optimal size for a Strategic Finance team is typically 5-15 people, depending on the size of the company and the complexity of its business model. At larger and more complex businesses, like Uber, for example, the Strategic Finance team can be significantly larger.
At Dropbox, our early Strategic Finance team was successful and we were allowed to significantly expand, from a lean team of 10 people to almost 20 within a few quarters. The team was still successful, but there was not enough high-impact work to go around, and individual productivity rates slowed and learning opportunities weren’t as abundant.
The lesson being: The ideal size of a Strategic Finance team is nuanced and varies by company, but it’s better to have a smaller team of high-horsepower individuals than letting the team get too large.
When interviewing candidates, test for cultural fit and strategic thinking.
If you are hiring candidates from investment banking, it’s important to make sure that the candidate will thrive in a technology startup environment. Investment banking is a fantastic training ground that breeds financial acumen, modeling skills and a world-class work ethic but is also a different work culture than startups. If you hire straight out of investment banking, pay attention to the candidate’s humility, ego, collaboration skills, and passion for technology – all necessary attributes.
"Strategic Finance," as the name suggests, necessitates the ability to think strategically as a fundamental component of the role. A reliable method to evaluate a candidate's strategic thinking capability is providing them with a case study that presents a problem they would encounter on the job. Usually, these case studies are take-home and give the candidate a few days to a week to complete. The take-home format and uncapped time limit are intentional, so you can assess how much effort a candidate spends on the case study based on the end product, which is a proxy for their work ethic and how excited they are about the job.
The most effective format for a take-home case study is a case study prompt with raw, anonymized company data. An example of a good prompt is as follows:
“With 6 months of paid data available, the team has asked you to provide a brief report that summarizes how the paid product has performed and provide a recommendation for where the monetization team should be focusing their attention over the next 3 months.”
At Dropbox, the prompt that we used was as follows:
“Analyze our Dropbox for Business pricing and make a recommendation. Output: 1 slide to tee up 15-20 minutes of discussion”
I dug up my Dropbox StratFin case study response for fun (link here). It’s almost a decade old, but it gives you a sense of what StratFin hiring managers look for. Good case study responses should be thorough, data-informed and provide well-thought-out suggestions/recommendations