Inside the "Triangle of Doom”: How Great CFOs Navigate CEO and Board Dynamics

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Apr 14, 2025

In this engaging discussion, Rick Smith, a seasoned CFO and founder of Bonfire Advisory, shares insights on the intricacies of CFO dynamics in venture-backed firms. He introduces the intriguing concept of the 'triangle of doom' between the CEO, CFO, and board. Rick emphasizes the importance of personal accountability and adaptability for CFOs while navigating financial strategies and common pitfalls in early-stage companies. With humor and experience, he explores the value of effective communication and the evolving expectations placed on CFOs as companies grow.

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INSIGHT

CFO-CEO Relationship Tensions

The CFO-CEO relationship is typically tricky because CEOs are dreamers and CFOs focus on historical data and control.
CEOs often want doers who execute vision; CFOs prefer order and are cautious about cash burn.

ANECDOTE

Unseen CFO Effort

Rick once fixed a messy audit alone with no staff, feeling rewarded when investors finally got the report.
Yet, he only received a simple 'thanks' email, illustrating how CFO efforts often go unappreciated.

ANECDOTE

Acquisition Without Thanks

Rick spent a year leading an acquisition deal, handling negotiations and financing.
Yet, during public thanks, he received no acknowledgment, which hurt deeply until the CEO admitted the mistake.

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Rick Smith, multi-time CFO, founder of Bonfire Advisory, and author, joins CJ to discuss the complexities and nuances of the CFO role in venture-backed companies. They delve into the dynamics of the CEO-CFO relationship and examine the qualities CEOs think they want in a CFO versus what they need. Rick introduces the concept of “The triangle of doom” that exists between the CEO, the CFO, and the board, and how to navigate situations when forced to pick sides. Having been a CFO of five different organizations across industries and stages, Rick then explains how he categorizes company stages relating to CFO needs. As the founder of Bonfire Advisory, Rick talks about how founders can set themselves up for financial success before they need a full-time CFO and breaks down some of the most common mistakes early-stage companies make.

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@cjgustafson222 (CJ)

LINKS:

Demystifying the Role of the CFO in Venture and Growth Stage Companies - https://www.amazon.com/Demystifying-Role-CFO-Venture-Companies/dp/B0DS9KF2C8

Rick Smith on LinkedIn - https://www.linkedin.com/in/rick-smith-906939/

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TIMESTAMPS:

(00:00) Preview and Intro

(02:13) Sponsor – Tropic | NetSuite | Planful

(06:49) The Challenges of the CFO-CEO Relationship

(12:59) What CEOs Think They Want in a CFO Versus What They Need

(17:46) Sponsor – Subscript | Rippling Spend | Vanta

(21:21) Hatred of Failure and Personal Accountability

(24:38) Establishing Trust With a New CEO

(28:21) Navigating Ethics When the CEO Is Dishonest

(32:54) Picking Sides Between the Board & CEO

(36:42) How To Exit When You Disagree With the CEO

(38:19) Categorizing Company Stages

(41:21) Why Early-Stage Companies Should Have Fractional CFOs

(43:51) Common Mistakes for Early-Stage Companies

(48:49) The Types of CFOs You Need at Different Stages

(53:14) What Rick Likes About Working With Series A and B

(54:54) Rick’s Book

(57:15) Anecdotes From Rick’s Career

(01:00:47) Long-Ass Lightning Round: Leases

(01:04:49) Advice to Younger Self

(01:05:38) Rick’s Recommended Tech Stack

(01:08:54) Craziest Expense Story

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