Editor's Note:Harry Hurst is a serial entrepreneur and co-founder and co-CEO of Pipe, a recurring revenue financing platform. This article reflects the author's personal views only.

As you may have noticed, conventional wisdom is often wrong. When it comes to financial oversight in startups and growth companies, I believe conventional thinking is more off the mark than usual. As a result, a large number of young companies operate without financial leadership and expertise while trying to gain market traction and grow into profitable, sustainable enterprises.

We often hear the saying: you shouldn't hire a CFO until revenue reaches $50 million. But waiting to bring in financial expertise is like waiting until you have more money or are nearing retirement age to start saving for retirement—it's setting yourself up for failure. When building my second startup, Pipe, my co-founder and I took a very different approach, and it was one of the wisest decisions we've ever made.

Building the Financial Foundation from Scratch

When we started creating Pipe in 2019, we knew we had to get the finance side right. My co-founder and co-CEO Josh Mangel and I had worked together before, and as Pipe grew, one of our first hiring decisions was to bring on a CFO (then VP of Finance), Lukas Wagner.

We had big ambitions to create a new alternative asset class and fundamentally change how companies access growth capital. We didn't spend much time bootstrapping, knowing this grand idea needed the support of the right strategic equity partners. Early fundraising required a strong business plan and financial model to win the trust of major strategic investors, but it meant much more than that. We also knew that getting unit economics right was crucial to success, enabling us to build something lasting and impactful in the market.

In the early stages of a startup, everyone has to roll up their sleeves and do what needs to be done. You have to be willing to clean those "proverbial restrooms." We were remote-first, and our finance lead was (and still is) based in Germany, so he was spared the cleaning duties. But as a very small team, Lukas handled payroll and filings across multiple states. He had a deep understanding of the company's inner workings, ensuring our systems, models, and financial metrics were built on a solid financial foundation. Having him so close to the process from the start has been invaluable to the company's growth.

Built for Scale

My co-founder and I are computer geeks and programmers. When developing Pipe, a trading platform for recurring revenue, we focused on the technical side and talked to founders about their needs, but that alone couldn't help us build a scalable product.

Whether you're in retail, services, SaaS, or another industry, your ability to scale and generate revenue and profitability ultimately comes down to money (or pounds, etc.). Beyond the software and how it works, our R&D process had to be firmly grounded in risk models and unit economics. If you don't embed these economics into the product from the start, you'll face a huge gap later (when flexibility isn't as easy) and a steeper climb when scaling.

By hiring a CFO early, you gain the expertise to build sound financial models that will remain applicable as you scale your business. It also means you have someone on your team who can continuously refine these models and explain them to stakeholders and investors—something advisors or part-time CFOs often can't do.

Protecting Your Cash Runway

While some think you should wait until the company is financially mature to bring in a CFO, a finance leader can be crucial to helping you reach that stage. Before crossing the profitability threshold, you need a robust financial strategy to protect and extend your cash runway, helping your capital last longer and making it easier to secure more funding. And once you do become profitable, these strategies will give you an edge to continue scaling and outpace competitors.

How a company manages its cash is always a top priority (or at least should be), and it's even more critical in the current macroeconomic environment. A CFO's guidance and oversight can mean the difference between a young company emerging healthy from the current market or being weeded out.

The Right Kind of CFO

Now, let's address the elephant in the room—risk. Startups are inherently risky because they're trying new things and going through potentially turbulent growth phases. Traditionally, many CFOs tend to be risk-averse, which has led startups to avoid CFOs as well. Their desire for CFO oversight is like a teenager wanting their parents to accompany them. But the right CFO is essential to a startup's success.

As I mentioned earlier, our CFO Lukas Wagner was deeply involved and hands-on from the start. He has an entrepreneurial mindset and is willing to do whatever it takes to get the company off the ground (and quickly grow its valuation to $2 billion). He also knows that avoiding risk entirely isn't the name of the game. In a startup, if you eliminate risk, you also eliminate the opportunity to create value for the market. Instead, he focuses on managing risk in a way that allows us to make bold moves and create new things, while reassuring investors and customers as much as possible.

Every CFO knows the difference between spending and investing. As a company, the key is to view core hires like a CFO as an investment in the company's health, not an expense that can be deferred until you have spare cash. For us, having deep insight into the company's internal financial operations was not only key to our successful launch but also to building a product that helps others achieve financial success.

As a CFO, why would you seek a startup role, and how do you find a promising company? For many founders and early team members, creating something new and embedding your ideas into the company's DNA is incredibly rewarding. As a CFO, you have the opportunity to fundamentally shape how a company operates. Look for startups that see that value—those that seek a CFO early on are already a good sign that they recognize it.