An overview of the Fractional CFO Market
Victoria Robson, Talent Leader at Mercia Ventures shares with us her insights of Fractional CFOs, highlighting how strategic financial leadership on a flexible basis can unlock unprecedented opportunities for scaling businesses.
An overview of the Fractional CFO Market
Victoria Robson, Talent Leader at Mercia Ventures shares with us her insights of Fractional CFOs, highlighting how strategic financial leadership on a flexible basis can unlock unprecedented opportunities for scaling businesses.
The fractional CFO market has grown significantly over recent years. It now represents one of the fastest-growing sections in our market of financial leadership appointments across the North and the Midlands. It is one of the hot topics among candidates, investors and SME shareholders.
We have spent some time with Victoria Robson, one of the Talent Leaders at Mercia Ventures - one of the most active VC investors in the UK, with a portfolio of over 250 founder-led rapidly scaling businesses, of which a significant number seek the support of a fractional CFO to help drive their strategic growth. We have worked with Victoria for many years and recognise her as one of the foremost experts on fractional leadership, so we were delighted when she agreed to help us look more deeply into the subject.
What does fractional CFO mean? Does it just mean part-time CFO!
Yes, to a large extent. However, the fact that a new title has become part of business vernacular, reflects the significant evolution in the market and impact opportunities from the old ‘part-time CFO’ title.
Fractional CFO has taken over because it more accurately reflects the strategic and flexible nature of the role. ‘Part-time CFO’ suggests a traditional employment structure, with a reduced time structure. It implies limited scope and influence. Fractional implies that the CFO is inputting on a more tailored basis – more aligned to what growing companies need.
Victoria’s perspective highlights how the strong benefits for CEOs in engaging a fractional CFO have grown the market:
“Developments in working patterns in recent years, emerging technologies and business demands mean a fractional CFO has become an agile, flexible and cost-effective way for companies to access top-tier financial talent. A CFO is an important partner to the CEO however for many companies early in their journey, the role isn’t warranted on a full-time basis yet the skill set most certainly still is. Fractional CFOs can provide the business with high-level strategic input and often have specific expertise in either sectors, specific industry challenges or transactional support. This expertise wouldn’t otherwise be accessible to a scaling budget-constrained SME.”
Are there typical scenarios that are more suited to a fractional CFO than another solution?
“Fractional CFO’s can be an extremely effective partner within ambitious scale-ups. High-growth situations are often evolving and adapting to current markets and trends so a fractional CFO can provide agility and flexibility to respond to these challenges in a cost-effective way.
As new and emerging industries continue to evolve individuals with experience of specific sectors or aligned business models/GTM strategies will continue to become increasingly in demand. The appointment of a fractional FD can be valuable to add specific industry expertise or specialised expertise, such as fundraising or exit experience.
A fractional CFO should also bring vital strategic insight and offer support outside of the traditional finance function. Many often have broader operational experience and are willing to be hands-on in a small team environment. We often hear from founders & CEO’s how it can be a lonely place so for many early in their journey a fractional CFO is a welcome supportive partner, both practically and emotionally!”
What does a fractional CFO in 2024 look like?
“Today’s fractional CFO needs to bring more to the table than the numbers – they should provide key strategic guidance, help inform key strategic decisions and initiatives and be a crucial sounding board on issues such as fundraising and M&A activity for the wider management team and shareholders. Their role is that of a key strategic partner, not a finance manager!”
The fractional CFO route is fast becoming one of the most attractive career routes for finance professionals. More and more SMEs are seeing the value in the solution. For many businesses, the most important time for financial strategy is in the relatively early stages of growth – setting up systems, financial strategies and creating value. Those already engaging with a fractional CFO are benefitting from the highest level of support for a manageable cost.
Over the next few weeks, we will be looking at the experiences of the CFOs and the businesses. Please get in touch if this is a subject that is relevant to you or if there is anything that you would like to discuss.
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