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// By Wesley Ramjeet, CPA
What is the role of a microcap CFO? In today’s business world, it is more important than ever to find a capable chief financial officer (“CFO”). These leaders are responsible for the financial well-being of companies. While there isn’t a one-size-fits-all answer to finding the perfect CFO, there are several qualities that should be looked for in any potential candidate. In this article, we will discuss the qualities needed in a Microcap CFO and how they can help a company succeed.
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Microcap company is defined as a public company with less than $300 million in market capitalization. Typically, they are undercapitalized and need capital for growth and expansion. The qualities of a microcap CFO are quite different than a fortune 1000 company as typically a microcap company has fewer resources to fill a complete financing and accounting team. As a result, the Microcap CFO has to wear multiple hats and pitch in to solve financial and operational issues.
these toxic financings so that existing shareholders and management do not get blown up. Integrity and Trust
The CEO lays out the vision and the CFO works on the planning to execute the vision. One of the most important points is how much capital is required to execute the vision and how to get the right capital to fund the vision.
When you are responsible for a company that has a market capitalization of less than $300 million, there are a lot of things that can go wrong. The CFO must be the voice of reason and compliance. The microcap CFO must ensure communication with shareholders, management and other constituencies be truthful and above board. This means disclosing all relevant information, both good and bad promptly through appropriate channels. A CFO must have integrity and ethical values to be successful in this role. They must be able to make sound financial decisions that are in the best interest of the company, even if it means making tough choices. They must also be able to maintain high standards of ethical behavior and set an example for others in the organization.
Capital
Technical expertise
Raising capital is a critical need for most microcap companies. A microcap CFO must be well versed in the different structures and impacts on the microcap company’s future. I have seen too many companies raise capital with toxic convertible features that decimate the company’s stock price and capitalization table. A microcap CFO must be able to navigate
In larger organizations, the CFO has an army of accountants and finance professionals that are responsible for all financial statement preparation, SEC filings, Budgets Technical Accounting Research, Reviewing Contracts, and signing off on payments. The larger company’s CFO has oversight but does not typically get involved in the details. A typical
A microcap CFO must be a great partner with the CEO to plan and execute the vision of the company.
88 MicroCap Review Magazine
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