I was wondering if anyone had any advice/experiences they could share about challenges they encountered if they were brought on as
We have a great triad of entrepreneurs who built a great business over the last 5-6 years. They have done a fantastic job building the company but last year the founders sold 96% of the shares to a PE firm to gain access to substantial capital to invest in the firm. I was than subsequently hired after the Board decided it was time to add a CFO to help build out the Finance/
Working with Founders after Sale of Control to PE/VC Firm
Answers
Mark, take the pressure off yourself and let the board do this for you. There is a great free template in the Resource area on Proformative: https://www.proformative.com/og/resource/general-content/general-operating-resolution which boards absolutely LOVE to see b/c it makes it very clear to everyone that the authority for any spending comes not from the CEO or CFO, but rather from the Board.
You should suggest to put this together under the direction of the board (mention it to a board member under deep cover :), not your CEO) and they will determine who has what signature authority. Pulls you clean out of the potentially contentious conversation with your CEO.
Here is another handy signature authority doc you should use in the same vein: https://www.proformative.com/og/resource/general-content/signature-authority-bank-investment-accounts. These will make your life so much simpler.
There is nothing worse than a founder/CEO! It is very difficult to pry their hands off of fundamental things like the checkbook. Not that I don't understand their hesitance, I do. It's their baby. But it is highly inefficient for everyone involved.
You will not be surprised that I have found that this is all about trust. Give it a few months of you doing good work for the CEO and then go to him with a suggestion that he delegate sig authority to you for $1K. This is a very small amount and, should he go with it, will save him time and headaches and will show him that you can be trusted. Then a quarter later ask him to push it up to a more reasonable level. It takes time and the more you push up front, the tougher it will be. Once the comfort level is there it will be easier (not easy, but easier). Good luck!
I agree with your strategy to be patient and watch it mature. My take on this is that these type of control issues and nuances inside startups as well as even public companies, can in fact be annoying, but may or may not be that important - I know of billion dollar companies with founder problems you describe below although more on the purchase requisition control side, and I know a $100M+ company where all checks are still signed by the CEO. You're not crazy at all. I draw the line where founders abuse their priveleges (like issues with credit cards, or T&E, or what have you) but being obsessed with control of the money can never be too damaging and it will loosen with size/complexity/growth...