When does a FOAK company actually need a CFO?

There's a moment in every first-of-a-kind (FOAK) climate tech company's life when finance stops being about doing the math on what the company has spent and starts being about whether it can raise what it needs to survive. Ben Richmond talks from experience when he argues most boards notice it about six months too late.

I've watched this play out across a lot of European FOAK businesses over the past couple of years – especially industrial decarbonisation and hardware moving from pilot to first commercial asset. The pattern is remarkably consistent.

By the time a founder or a VC partner picks up the phone about a CFO search, the company is usually already mid-crisis. An investor has made an offer, and nobody inside the company can produce the numbers to answer it. A lender wants project-finance documentation nobody in the building knows how to produce. The board has quietly lost confidence in the numbers coming out of finance. None of this is inevitable. It's a hiring-timing problem, and it's solvable if you're honest about what stage you're actually at.

It's also, I'd argue, one of the more overlooked talent stories in European climate tech right now.

Everyone talks about the engineering talent crunch in hardware climate tech. Far fewer people are talking about the finance talent crunch sitting right behind it.

Why FOAK companies delay the hire

Early-stage climate tech founders are usually engineers, scientists or commercial operators first. The instinct is to keep finance lean for as long as possible because a full-time CFO looks like overhead the P&L can't yet support. That instinct is right for a while. It becomes wrong the moment the company's central bottleneck shifts from “can we build the thing” to “can we finance the thing.”

For hardware-intensive, capital-intensive businesses moving from pilot to first commercial-scale asset, that shift happens faster and earlier than founders expect, and often well before revenue looks like it “justifies” a senior finance hire on paper.

Money is the easy part

Attracting a genuinely capable CFO into a pre-commercial, single-asset, technology-risk business is a harder sell than most boards realise.

The candidates who can actually do this job, structure a first project financing, negotiate an offtake agreement, satisfy a lender's due diligence on a technology that's never operated at scale, and still run a credible monthly close... are not abundant. They tend to sit comfortably at growth-stage companies with de-risked technology, predictable revenue, and equity that isn't underwater.

Convincing that person to join a business where the core technology risk hasn't yet been retired takes more than compensation. That person needs a credible story about the next 18 months: what capital is already committed, what the construction and commissioning timeline looks like, and what this CFO can point to as their signature achievement. Boards that can't articulate that story lose good candidates to companies that can.

The pool of finance professionals willing to make this move is growing, and at Green Executives we're seeing it first-hand across our work with European energy transition and infrastructure investors.

A few years ago, we often introduced candidates to their first FOAK mandate, which is a genuine leap of faith on their part. Increasingly, we're placing people who've already done it once, sometimes twice: engineers-turned-financiers, project finance specialists who've moved in-house, corporate finance people who did one FOAK raise, found they loved it, and now actively seek out the next one.

That's a healthy sign for the sector, and it changes the conversation with boards. The talent exists. It still has to be found and courted properly, and it won't be sitting in a general CFO applicant pool.

What a fundraising CFO actually needs to know how to do

This is where the FOAK CFO brief diverges sharply from a typical growth-stage finance hire, and where a lot of otherwise strong candidates fall short:

• Blended and structured finance fluency; grants, concessional debt, green bonds, offtake-backed project finance, and how to stack them without tripping over each other's covenants

• Investor-grade modelling under construction risk; building a model that survives diligence when the asset doesn't have an operating track record yet

• Fundraising as a full-time second job; running a Series A or Series B process, or a project-finance raise, in parallel with keeping the existing business solvent

• Translation between technical and financial risk; sitting between engineers who understand the technology and investors who need that risk translated into terms a credit committee will accept

  
  

Very few CFOs arrive on their first day with all four. The best FOAK hires usually come from adjacent backgrounds such as infrastructure finance, project finance advisory or a prior FOAK company at a similar stage. A straight line up through corporate finance at a larger, de-risked business rarely produces them.

Europe is a genuinely good hunting ground for this. Between the Nordics, the Netherlands, Germany and the UK, there's a deep bench of people who've cut their teeth on infrastructure and project finance in grid and renewables over the last decade. Many of them now want to apply that experience to hardware climate tech.

That cross-pollination, infrastructure finance discipline meeting FOAK technology risk, is where some of the strongest candidates we're seeing right now are coming from.

Cost: boards are scared of the wrong number

A FOAK CFO in Europe costs somewhere between €160,000 and €220,000 in base salary, before bonus and equity. More than most Series A boards want to see on the org chart.

I'd argue that's the wrong comparison.

The question isn't what a CFO costs. It's what it costs to go without one.

A raise that stalls for six months and closes at a worse price. On a €20 million round, a 15% haircut is €3 million of founder and investor value, fifteen times the salary.

A covenant the company breaches without knowing it has.

A lender walking away six weeks before financial close because the model wouldn't reconcile under diligence.

Any one of those costs more than the hire. Nobody writes down what the missing CFO cost. Investors price it in anyway.

The fractional bridge and its limits

Fractional or interim CFO support is a legitimate and often underused option for companies not yet ready for a full-time hire, and it's one we're doing more and more of directly. That can mean bringing in someone with the right project-finance or fundraising background on an interim basis while a permanent search runs in parallel. It can also be a longer-term arrangement where a full-time hire genuinely isn't justified yet.

It's a small but telling shift in our own work. A few years ago almost every finance mandate we ran was a permanent search. Now a meaningful share of the conversations we have with European FOAK boards start with “we're not sure we're ready for permanent yet.”

That's a perfectly reasonable place to start, provided it's a genuine bridging decision. Too often it's a way of deferring a decision the board has already outgrown.

The limit is knowing which situation you're in. Fractional support works well for steady-state finance discipline. It works far less well when the company is mid-raise or mid-financial-close and needs someone with full-time bandwidth and personal authority in the room with lenders and lead investors.

The pattern we keep seeing

Across the CFO searches and mapping work we've done across European PE- and VC-backed energy transition businesses, companies that hire well ahead of their financing consistently get better outcomes: better terms, faster closes, and less founder time lost to firefighting instead of building. Those that wait until the raise is already underway compromise on candidate quality, timeline, or both.

If you're a founder or a board member reading the triggers above and recognising your own company, the conversation worth having isn't “do we need a CFO yet?” It's “what does the next 18 months actually require, and who can we get in front of before we're negotiating from a position of urgency instead of choice.”

We'd be glad to talk it through.