Chief Financial Officer (CFO)vs Accountants : The Biotech CEO’s perspective
Many young companies think that they already have an accountant and hence do not require any CFO Service. We argue that the role of Chief Financial Officer has to be forward looking contrary to accounting perspective which is backward looking. In addition, in these fast-changing times, the role of Chief Financial Officer has evolved from not just doing a typical CFO job but to assist the CEO in understanding both financial and non-financial metrics.
Our team that comprises young as well as experienced finance professionals in life sciences division, has adapted to the needs of the young companies which is reflected in the following services we provide under Interim CFO Support:
- Corporate governance:
- Budgeting and forecasting:
- Cash burn rates:
- How much Cash:
- Assist the CEO/CSO:
A young company needs to have a strong corporate governance, and this includes having independent Boards, Quarterly meetings to understand the company’s short and long-term strategy and so on. Farmantra advises CEOs in putting a strong corporate governance in place.
Although neglected by many young firms, an accurate forecasting is very important to have strong governance. This reflects management as well as Investors’ expectation regarding how well the team is able to forecast and manage the cash. Our financial reporting every quarter encapsulates companies’ strategies than just the accounting numbers. We benchmark companies with their competitors to understand where they are in the value chain, where they would be in 5 years, how the company is performing based on KPIs set by the board members? This report helps the BODs to ask tough questions to the CEO and the management team and make sure that company is on the right path.
Some of the companies where we acted as Interim CFO had no idea how much cash they are burning and when they should start looking for money. You don't want to start looking for capital when your balance is zero, the delays in running the trials also delays the launch of product leading to loss in value and market share to your competitors
Farmantra has advised on several deals and Identified the appropriate inflection points and optimal amount of cash to be raised at each stage of development. We also advice on appropriate funding options based on the life cycle of the companies.
The role of Chief Financial Officer these days in biotech is not just confined to finance but also to assist the CEO in attaining its strategic objectives. We have been advising the CEO in terms of what is right or wrong with respect to several important decisions that they take with respect to amount of money to be raised, whether to launch the products directly or license out and so on.
To know more about our valuation services click here