In a way, being chief financial officer of a young technology startup during the late-1990s, early-2000s boom was like dating someone much too young. Often, the company was overly focused on image and at on hiring “charismatic” executives, who could play fast and loose with cash and lose track of the goal of long-term profits.
It was a heady time. But many CFOs burned by a relationship with a startup remember it as a time of red ink, underwater options, and looming bankruptcy. Most competent CFOs moved on to more mature companies, and tech hiring dried up.
Well, the once-immature old flame is back. In a January special report, BusinessWeek proclaimed in a headline, “Tech Hiring: An Oxymoron No More.” Other publications have repeated the projection. But now that tech is beckoning again, are CFOs willing to give the industry another chance?
Yes, according to recruiting experts. “CFOs are taking careful looks at opportunities that two or three years ago they either wouldn’t be getting calls for or that they would outright dismiss because of the risk,” observes John Wilson, chief executive officer of the San Francisco-based CFO search firm J.C. Wilson and Associates.
Larry Ormsby of the San Francisco office of search firm Korn/Ferry says he’s getting more calls to find CFOs for IPO-bound companies. He has three assignments at the moment, which he calls “a lot.”
“There was a point where, when you said you had an IPO story, it was almost tongue-in-cheek because you didn’t know if [the company] was really going to go out or not,” says Ormsby. “Now, candidates are taking the opportunities more seriously.”
But not, both recruiters note, without their eyes wide open. “Everyone is trying to keep excitement and emotions in check right now,” says Wilson. “And if [a tech employer] is remotely flaky, very few CFOs will have any interest whatsoever.”
Finance chiefs are more particular now, says Sharon Wienbar, a managing director of Bank of America’s BA Venture Partners. “If you come in and your books are in disarray, you’re not sure if the sales people are on the up-an-up, [and] auditors [are] screaming ‘material weakness’ – you don’t want to get boxed into that.”
Marcus Smith, who recently joined FaceTime Inc., a network-security startup, as CFO, wouldn’t join just any new tech company. When evaluating a newly launched employer, he mulls such things as its investors, how much they’re investing, the amount of cash on hand, and its directors and managers. Smith’s previous jobs include vice president of finance at NetScreen, and CFO of consumer-electronics company SonicBlue. Before that, as controller of Storm Technology, he worked on the company’s IPO.
For his part, Matt Petzold, who recently became finance chief of Motricity Inc., a wireless-software developer founded in May 2001, did so because he “wanted to get back to the excitement of growing a small business.” His last stint was as CFO of Verestar, a $250 million satellite-services provider. Before that, he was CFO of Internet service provider UUNet, a young startup when he joined.