I had lunch today with a VC friend of mine, whom I will call Obi-Wan. His role is largely recruiting for his firm’s portfolio companies, so he has a really good perspective on the job market for financial and other executives. Here are some of Obi-Wan’s observations:

* He has never seen so few CFO jobs since he has been a VC…including right after the dot.com crash. And, he’s not sure that the job market for CFOs will pick up any time in 2009.
* Expects A-round funding to continue to be slow for a while…but also thinks 2010 will be a better year to raise money than 2009 will have been.
* Compared to historic averages, VCs will be putting a higher % of their $$ into existing portfolio companies than into new ventures. Obi Wan’s theory is that they want to keep their current investments strong rather than pursue new and riskier ventures. Naturally they won’t be pouring money into under performing companies….but if you are making your milestones, you should be able to keep the investors in the fold.
* Management teams of venture-backed companies should get used to tighter scrutiny from their investors than in years past. This will elevate the importance of competent financial and accounting professionals in these firms…though the role will be a bit more of a watch dog and less of a strategist than it had been in recent years.  Well, that’ no fun!
* To that end…Obi-Wan thinks you’ll see more venture-backed companies hire solid controllers rather than full-time CFOs, and may hire a part-time CFO to come in a few days per month and do some of the transactional stuff (e.g., equity events, bank debt negotiations, complex revenue transactions). So, the $175K per year CFO might be replaced by the $115K per year controller supported by a $60K per year
PT consultant. I pointed out the flaw in his analysis, but I lost the argument!   Hey, I nickname the guy Obi-Wan for a reason!
* More and more they will allow companies to skip an annual audit as a short-term money saving tactic…again reducing the need for a CFO.  Since I work for a CPA firm, you can imagine I was thrilled with this.
* Presently, he is very skeptical of the number of folks who are doing part-time or interim work. If you have done that kind of work for years and have a track record, you are golden. If you had more traditional employment for the last several years, lost your job and are now doing the part-time CFO stuff, you may struggle a bit convincing investors that you are not just doing it until you get a “real job.” You may be better off joining an established firm vs. going alone.  But, if you are really going to do it, his suggestion was to put some money into proving your seriousness of purpose: get a website, get real business cards, get some marketing material, etc….
* CFOs who talk about helping grow revenue and have a history of doing this will be in demand. And, yes, I too, noticed that this contradicts his theory that the role is more of a watch dog than in the past.
* IPO Experience - over-rated, M&A experience under-rated. If you have been able to do an M&A in this market that gets all of the VCs a reasonable ROI, you have done something special.

Honestly, I wish I had taken notes during the conversation, because he’sa fascinating and brilliant guy…and more opinionated then almost anyone I’ve ever met. I got all of the above simply by asking him what he thought of the CFO job market, as I know a few great CFOs who are job hunting. I am not sure that any of the above will come as a shock to many of you, but I thought I’d share it just the same.