You’ve raised capital. Now you need to ensure you’re managing it in a way that extends your runway, supports growth, and will help you scale and achieve profitability (without overdilution). A CFO can help you do all of that. But a full-time CFO salary? That’s not in the budget.
You’re not alone. Many (many many) SaaS and AI startups have had to solve this paradox, and their experiences have yielded a reliable roadmap for building healthy startup financial practices and using clever workarounds to leverage the insight of a CFO before you have the budget.
10 Startup Finance Strategy Essentials
Building a financial strategy for your startup takes time. It’s also cheaper and faster than trying to correct financial mismanagement. Your financial operations are the foundation for your business. Build that foundation well, and it will be ready to support rapid (even exponential) growth. Cut corners, and you’ll be facing costly foundation repairs.
If you take one thing from this article, let it be this list. Bookmark it. Copy and paste it into your notes app. Forward it to the financial expert on your team (whether that’s forwarding it to yourself, your cofounder, or a fractional CFO). These 10 essentials are the roadmap to building your startup’s financial muscle.
1. Clear financial models
Create financial models for the next 12-24 months, including projected revenue, expenses, burn rate, and runway. Your financial modeling should be flexible enough to allow you to test different scenarios, like rapid growth and market corrections/slower sales.
2. Burn rate and runway tracking
Knowing how much capital you’re spending (and how that’s affecting your runway) is integral to responsible financial management. Every SaaS and AI startup should be performing monthly tracking of burn rate (what they’re spending) and runway (how long you until they run out of capital). For tips on how to extend your runway, check out our guide.
3. Cash flow forecast
Cash flow forecasts, week-by-week or month-by-month reports of cash inflow and outflow, can help you make better business decisions, like choosing whether to defer new hires or how to negotiate vendor terms.
4. Revenue recognition plan
Create a system to track annual recurring revenue (ARR) and monthly recurring revenue (MRR) accurately, aka a revenue recognition plan. In addition to supporting investor trust and ensuring you’re in line with accounting standards, clear recognition is especially important for usage-based and subscription model SaaS companies. It can impact valuation, forecasting, compliance, and even strategic decisions like fundraising (when and how often) and your exit plan.
5. Go-to-market spend plan
How you spend money to acquire new customers will affect how quickly you can achieve profitability. The last thing you want to do is supercharge your burn rate in the pursuit of market stickiness. Create a structured plan for managing customer acquisition costs (CAC) across each marketing and sales channel so you to track ROI for each channel and make adjustments as necessary.
6. Bookkeeping and accounting system
Clean, compliant bookkeeping is essential to staying on top of the financial complexity of AI and SaaS businesses, especially for startups that operate in multiple currencies. Working with an accountant or fractional comptroller to help you set up your accounting procedures can be well worth the investment.
7. Capital stack strategy
Every startup needs a strategy for how it will fund growth. Understanding the capital stack is a superpower for founders because it allows you to weigh the pros and cons of different funding sources—equity, debt, revenue-based financing, grants, or venture tranches—so that you can leverage each type to maximize the benefits.
8. Metrics dashboard
Create a live view of your core KPIs, including ARR, MRR, churn, CAC, LTV, gross margin, and usage patterns. Dashboards make it fast and simple to check on the financial health of your business. You can create custom dashboards or use existing tools like ChartMogul or Baremetrics.
9. Contract and pricing discipline
Finding your “Goldilocks” pricing strategy requires research, testing, and discipline. Find the pricing model that provides financial alignment and supports your product-market fit. Create clear contracts, pricing structures, and billing logic. For help on finding the pricing strategy for your business, read the guide.
10. Investor reporting and data room basics
Start building your data room and basic update templates for investors. Think: cap table, pitch decks, financials, and your customer pipeline. Transparency builds trust, and staying on top of your financial data demonstrates operational excellence.
How to Access Financial Expertise When You Can’t Afford a CFO
You might have read that list and said, “Not my wheelhouse.” It doesn’t have to be. There are a couple ways SaaS and AI startups can access financial expertise without hiring a full-time CFO.
Fractional CFO
A fractional chief financial officer (CFO) offers C-suite-level financial leadership, insight, and guidance on a part-time basis. Fractional CFOs occupy the space between consultants and full-time employees, embedding with the level of knowledge and access of an employee without the cost of hiring a full-time employee.
What does a fractional CFO do?
Fractional CFOs customize their work to the specific needs of the business, often focusing on:
- Financial modeling
- Cash flow forecasting
- SaaS financial planning
- Risk management
- Getting on top of high expenses
- Finding ways to increase low margins
- Financial reporting
- Operational efficiency
The benefits of a fractional CFO
The biggest perk of the fractional CFO model is that it allows small-to-medium-sized companies to access an experienced CFO for a fraction of the cost. They can provide high-level expertise to ensure you’re building scalable financial practices, protecting your equity, and ensuring that your startup looks attractive to investors when it’s time to raise the next round.
You can hire a fractional CFO on a project basis or for ongoing work (often at a set monthly fee). The cost will depend on several factors including the scope of the work, how experienced the CFO is, and where they’re located (hiring a virtual CFO can help reduce costs here).
Fractional Comptroller
If you need more “in the weeds” support, it might make sense for your business to hire a fractional comptroller, a part-time or contract-based financial expert who oversees a company’s accounting and financial operations.
A fractional comptroller typically supports a business with:
- Accurate bookkeeping oversight
- GAAP-compliant financial reporting
- Cash flow management
- Month-end close process
- Budget creation and variance tracking
- Audit and tax prep coordination
- Internal financial controls
Fractional comptrollers don’t usually set high-level fundraising strategy or revenue models (that’s more CFO/CRO territory), but they make sure the financial engine runs clean and reliably.
Free Tools for Financial Clarity
Our suite of calculators can help you achieve financial clarity:
Extend Your Runway on Your Terms
Sometimes, you need a boost of capital to achieve your business goals. We’re in your corner with non-dilutive capital that can help you extend your runway, take advantage of rapid growth, or weather market corrections. Apply today to access up to $3M in non-dilutive financing.
Series A FAQ
Series A funding is the first major round of venture capital used by SaaS and AI startups to scale product, team, and go-to-market after achieving early traction.
Series A rounds typically raise $5M–$20M, depending on the startup’s traction, market, and capital needs.
Founders usually don’t make personal money during Series A, as proceeds go to fund company growth, not individual payouts.
If more capital is needed post-Series A, startups can use non-dilutive financing to extend runway, raise a bridge round, Series A extension, or move toward Series B if metrics support it.
Series A investors typically include venture capital firms, sometimes joined by strategic investors or super angels with domain expertise.
Series A founders make money later through equity value appreciation realized at acquisition, secondary sale, or IPO.
Series A investors make money by receiving equity that appreciates in value and pays out during a successful exit, such as an acquisition or IPO.
Only about 50% of Series A startups raise a successful Series B, and fewer make it to exit or IPO.
Series B funding is the second formal venture capital funding round, raised to scale revenue, expand teams, and optimize operations, typically after proven product-market fit and repeatable growth.
Series C is the third formal funding round. Funding from a Series C round supports aggressive scaling, new market entry, or acquisitions, often from growth-stage or late-stage investors.
A Series D funding round is for startups that need additional capital before an exit, are facing delays, or are exploring new pivots or strategic expansions.
Most venture-backed startups go through 3–5 rounds (Series A to D/E) before pursuing an IPO.
