Startups Stack Exchange Archive

What are the responsibilities of a COO and a CFO in a startup?

And how do these roles differ from that of the CEO?

In terms of both responsibilities and work.

Answer 7599

That’s completely dependant on the StartUp.

The COO normally runs and plans the environment of the operating business. Examples are Product Live Cycle or Service Blue Print. But also processes of how production works etc. He has concerns and financial needs, which the CFO (and other C-Level managers) needs to fulfill or reject. (How to we fulfill our offerings?)

The CFO takes care of financial streams through the company, takes care of current and future financial needs and develops an investment strategy. (Do we have the financial possibilities?)

The CEO is some kind of mediator in this relationship. He has to prioritize and set-up his on certain problems. He is the board leader and his main objective is that the company runs smoothly and do strategic decisions. (Does it fit into our strategic model?)

In a startup, the COO normally is represented by a specialist (Developer, industrial designer etc).

The CFO mostly doesn’t exist. His tasks are partly taken over by the CEO and are outsourced. (Financial planning and investment strategy in-house, reporting and books outsourced)

In startups, those names (CFO, COO, CMO, CIO, CTO) aren’t that important. Those are needed if the company has a lot of people, material, information, etc. to be managed.

StartUps should do a more lean approach. Focus on the needs of the customers, creating a product and do not over manage everything.

Of course, that’s more or less an opinion and fits not all startups. I personally think, that the main difference between startups and companies are the terms of failure probabilities: managers try to reduce risks and do not accept uncertainties while entrepreneurs have to accept uncertainty and transform those into risk over time.

So if you think about to introduce a C-Level, think about how much uncertainty you can accept and how much management capacities you really need to manage your risks. At a certain point, a startup evolves and the needs for managers rises.

Difference risk and uncertainty: risk = 10% Good - 70% Okay - 20% Bad => You know about probabilities or at least can guess them with the information you have. uncertainty = ?% Good - ?% Okay - ?% Bad => You know about the outcome, but you have no information about probabilities.

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