A List of Outsourced CFOs for Fund Managers
In collaborating with hundreds of fund managers over the years, we have observed certain patterns of those interested in building a firm with lasting impact and value as well as great returns. When the fundraising close occurs, these emerging managers then expand their focus of efforts toward company building — having a disciplined investing pace, facilitating a robust deal flow, conducting deep and thorough diligence, cultivating their portfolio companies, and creating a foundation of operational excellence. We like to call this developing a “durable franchise.”
Best-in-class firms build this operational excellence with a cornerstone of finance from the earliest days. Financial management is an important part of tracking your investments as a fund manager, while understanding your performance and accounting. As a fiduciary managing the investing capital of others, it is your obligation to maintain appropriate financial controls and to foster fund administration that will accurately, transparently, and effectively communicate with your investors.
For emerging managers, very few funds have the budget to support an in-house finance team until they have typically reached Fund III or Fund IV, depending upon size. Most often, finance is an outsourced function at this beginning stage through a collection of fund administrators, accountants, outsourced CFO services, and tax professionals. The fund manager coordinates with these various professionals, synthesizes the information, and reports to investors.
Deepening your financial prowess includes strategic planning for future fundraising, growing your investor base, laying the framework for operational due diligence as seen by future investors, and demonstrating strong business acumen as Limited Partners are watching this space to see how you choose to grow.
Our Outsourced & Fractional CFO Blueprint can help you find the assistance you need from external finance and accounting service providers. Most charge fees of $100-$400 per hour for general assistance, such as bookkeeping, accounting, and paying bills. Fees may climb up to $6k-$16k+ per year for more advanced work, such as forecasting, projections, lending packages, etc.
If there are other service providers in your ecosystem that you would highly recommend, please share with us! We are always interested in those whom you hold in high regard.
https://www.venturefundblueprint.com/blueprints/outsourced-cfos
Three Takeaways:
- Best-in-class firms build a foundation of operational excellence with a cornerstone of finance from the earliest days.
- It is common practice to outsource finance functions to a service provider if your budget does not allow it or if your financial reporting needs do not require in-house support at your stage.
- Limited Partners watch closely how you choose to build your firm and handle finance needs, which will be evaluated during future fundraise efforts.
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Sincere appreciation to my co-author, Shea Tate-Di Donna!
Kaego Ogbechie Rust is CEO at Foresight Advisors — working with foundations, investment firms, non-profits, and for-profit ventures — offering comprehensive support across vision & strategy, investing & financing, and operational planning during critical periods of your growth.
If you’re looking for help, contact kaego@foresightadvisors.com or visit www.foresightadvisors.com.
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Read More:
New Book Release
• The Venture Fund Blueprint — Our #1 Best Selling book helps you learn to build, launch, and grow your organization — with step-by-step guides from crafting messaging and operations to running finance and legal.
Pitch Decks & Messaging
• How to Make a Pitch Deck for Your Fund
• How to Write an Investor Update (With Example)
• How to Write a One Pager
• Building Your Fund’s Investment Thesis
Launch & Growth
• 12 Steps to Scale a Business
• The 10-Point Checklist to Launch Your Business
• A Launch Checklist for Emerging Manager Funds
Market Size & Viability
• How to Calculate Market Size
• Know Your Niche & Cost
• How To Measure Results
• The 9 Point Due Diligence Checklist for Fund Investments
Sales & Operations
• 7 Steps To Assess Your Competition
• Competitive Advantages That Last
• Developing a Go-to-Market Plan (GTM)
• 5 Ways to Productize Your Business
• Finding The Right Customer Profile
Finance, Tax, & Legal
• How To Choose a Lawyer For Your Fund
• A Simple Way to Track Your Business Finances
