The unofficial guide to understanding startup Finance Functions.

When's the last time you heard a vaguely named Finance / Strategy (F&S) function (like "Strategic Finance") & asked - WTF does that team actually do? It's time to clear things up. For the very first time ever - the unofficial F&S Function Overview 101.

First - this is unofficial for a reason. There are no generally accepted principles even though everyone wants standardization. I'm taking a view based on my experience. These are strong opinions, weakly held so let's debate / discuss to get it right.

Second - a word on words. I actually hate "Strategic" in "Strategic Finance" b/c every Finance & Strategy team is strategic, esp in fintech where finance literally is strategy since the product is financial. But we'll stick to existing nomenclature for simplicity for now.

Third - On method: - Since startups always talk about the 🚀, I'll use this metaphor for what these teams do - Since roles are loose & can overlap, I'll add what they say that makes it clear who they are - I'll include what backgrounds to look for (not exhaustive!).

You'll learn enough about these functions, you'll finally be able to build better teams: - Financial Operations

• Technical Accounting

• FP&A

• Strategy & Planning

• Corporate Strategy

• Corporate Development

• Strategic Initiatives

• Business Operations

• Strategic Finance

Financial Operations

What They Do: Track how much the 🚀spent so far

What They Say: They'll mention AR/AP, reconciliations, payroll, reimbursements, tax

Their Background: Accounting firm; Startup accounting

Financial Operations keeps track of money in / out for the company and makes sure every transaction in the company's ledger is accurate (reconciliation). They are front-line finance support for payroll & expenses and keep track of funds flow to keep company expense in line.

Technical Accounting

What They Do: Classify and report 🚀 spending externally

What They Say: They'll mention audits, GAAP, rev rec, guidance, month-end close, financial statements prep

Their Background: Accounting firms; Startup Accounting (CPA required)

Technical Accounting translates what the business is investing in and spending on into generally accepted reporting that external stakeholders understand (e.g. monthly close, audits). They know technical specifics of accounting for financial statements that investors accept.

Financial Planning & Analysis (FP&A)

What They Do: Plan where the 🚀can afford to go

What They Say: They'll mention operating model, financial process (headcount, sales comp, annual, budgets)

Their Background: FP&A at tech/fintech (Analytics a plus); Accounting firm

FP&A takes all of the financial data across the company and maintains the model of where the company is headed at a macro level. They know the trends, KPIs and financial metrics to build the forecasts and process to keep the company on track.

Strategy & Planning

What They Do: Design the 🚀planning & prioritization process

What They Say: They'll mention OKRs, cross-functional alignment, accountability, company strategy

Their Background: Consulting; Program Management and/or Business Operations at tech/fintech

Strategy & Planning works across the company to make sure teams are planning for & prioritizing the right goals to advance company strategy. They build consensus while holding teams accountable for milestones, and they develop processes & reporting to track progress.

Corporate Strategy

What They Do: Analyze competitor 🚀 to improve our 🚀

What They Say: They'll mention competitive dynamics, long-term strategy, industry intel

Their Background: Investment banking / PE, consulting, Corp Strat/Dev at tech/fintech, Equity Research

Corporate Strategy knows the industry landscape and uses that to inform how the company should operate. They've got a pulse on competitors and share research. They evaluate product offerings & business models to guide how company can stay competitive in mid/long term.

Corporate Development

What They Do: Partner with / buy other 🚀 to improve our 🚀

What They Say: They'll mention M&A, strategic partnerships, due diligence, deal models

Their Background: Corp Dev at tech/fintech, Investment banking / PE, venture capital

Corporate Development has a similar lens to Corporate Strategy but focuses on actually partnering with / buying firms that improve or expand how company operates. They build business cases, analysis & due diligence to support acquisitions that help company stay competitive.

Strategic Initiatives

What They Do: Ensure 🚀 building processes scale

What They Say: They'll mention cross-functional partnership, scalable process, operational efficiency

Their Background: Consulting (MBA a plus); Business Operations or StratFin at tech / fintech

Strategic Initiatives focuses on how to make specific business units operate efficiently as they scale. They deep dive into how business units can drive more impact and how cross-functional teams can support business unit efficiency and decision-making effectiveness.

Business Operations

What They Do: Ensure company is efficient in building 🚀

What They Say: They'll mention optimization, cross-functional collaboration, process implementation, post-mortems

Their Background: Consulting; Operations at tech / fintech (Analytics a plus)

Business Operations focuses on processes & systems that make the company run efficiently. They know all about company-wide organizational and communicational optimization. They also bring together cross-functional teams to implement process that makes company work better.

Strategic Finance

What They Do: Quantify trade-offs for what features to add to 🚀

What They Say: They'll mention unit economics, ROI, deal negotiation, LTV / CAC, new product launch

Their Background: Investment banking / PE; Consulting; StratFin at tech/fintech

Strategic Finance figures out the key levers and trade-offs to maximize / optimize the value of investment in launching products and partnerships. They break down new initiatives to unit basis and own partnership negotiations to help business units quantify strategy.