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Forbes
3 hours ago
- Business
- Forbes
Fractional Back Offices: The $280 Billion Shift Reshaping Startups
Executive skills, abilities, and competence. Fractional Back Offices Powering the Next Wave Startups' inboxes say it all: 'Urgent: Runway Update.' 'CFO Search: Need Help.' 'DAO Governance: Compliance Nightmare.' Across Silicon Valley and beyond, founders are wrestling with an impossible equation. Rising interest rates have made growth capital dramatically more expensive—and harder to access—forcing startups to slash budgets. Yet the cost of hiring continues to rise. You'd expect tighter funding to flood the market with talent. Instead, the talent gap is only widening. Korn Ferry projects a global shortage of 85.2 million skilled workers by 2030, putting pressure on startups to compete for scarce expertise with limited capital. At the same time, emerging sectors like Web3 and AI are pushing the boundaries of traditional know-how. Tokenomics, DAO governance, and cross-border compliance require skills most executives simply don't have. These aren't theoretical challenges—they're operational roadblocks that demand lived experience. The economics are brutal: bringing on a seasoned CFO or senior back-office leader can cost over $500,000 a year. At scale, that's just another line item. For early-stage startups, it's a runway killer. Skipping it? That's startup suicide in today's unforgiving market. Only 16% of software companies now meet the Rule of 40—the growth-profitability benchmark VCs demand. Enter the most quietly disruptive trend in business: fractional executives who are rewriting the rules of corporate leadership. In this environment, on-demand executives aren't a perk—they're a survival strategy. The turning point came as market conditions shifted dramatically. Remember 2021? When startups raised over $640 billion globally and founders could practically sneeze their way to a Series A? Those days now feel like a distant memory. Global venture funding has plunged 38% since its 2021 peak, falling back to 2018 levels. The 2024 reality check was swift: funding arrived with tougher terms and sharper scrutiny. Down rounds account for over 11% of venture deals, signaling broader investor caution. Nearly half of seed-stage companies now face the risk of shuttering within 18 months. Faced with this impossible equation, more founders began exploring fractional leadership. What surprised many? Fractional executives weren't just cheaper. They were often better. Kruze Consulting's clients get acquired at more than double the industry average: 11.5% versus 5.2%. Granted, some of that success may stem from selection bias (companies using premium services might already be stronger performers). But the pattern holds: executives who've scaled multiple startups tend to deliver measurable value. The results speak for themselves. "When John came on board, we were at $11 million, and now we're at $20 million," says Rick Helwig, CEO of MSP360, a tech company that partnered with fractional CFO services. "Regardless of what happens in this business, whenever I need a CFO, I'll call John." Fractional leadership brings real tradeoffs—for both startups and the talent they depend on. Professionals juggling multiple clients can be stretched thin during fast-moving crises. Cultural integration suffers when leaders remain halfway in and halfway out. The talent pool is also limited, particularly in specialized sectors where deep expertise is non-negotiable. The question isn't whether fractional executives can help, but whether startups can structure these relationships to maximize value while minimizing operational gaps. While many founders turned to fractional help out of necessity, some startups built entire businesses around it—transforming the back office into a billion-dollar opportunity. Pilot reimagined startup finance by combining software automation with full-stack accounting teams. Now serving over 1,700 clients, it delivers investor-ready books, real-time burn rates, and full runway visibility—without bloating headcount. Kruze Consulting turned tax deadlines and board meetings into a venture-backed machine. With 800+ startup clients and $15 billion raised under their watch, its fractional CFOs specialize in audit prep, VC reporting, and strategic finance—particularly in crypto and Web3. Continuum has streamlined executive hiring by making leadership plug-and-play. The platform matches startups with proven talent in under 48 hours, helping founders secure elite leadership without long search cycles. As CEO Nolan Church puts it: 'Fractional work is the future of work. This trend will forever change how companies solve problems and how people choose to work.' assembles full squads—product, operations, and growth teams on demand. Built for hypergrowth, the model helps startups scale fast without locking in fixed headcount. The smartest money in Silicon Valley isn't just watching this trend—they're funding it. Bezos Expeditions, the investment firm of Jeff Bezos, co-led Pilot's $100 million Series C, doubling its valuation to $1.2 billion. Tiger Global and Arrive (the venture arm of Roc Nation) backed $60 million round—recognizing that fractional executives deliver 'deeper experience at a fraction of the cost' compared to full-time hires. These aren't consultants. They're embedded partners driving outcomes without the overhead. new skills Emerging sectors haven't just exposed the limits of traditional advisors—they've given rise to a specialized market for fractional services. Web3 and AI companies face operational complexity that conventional playbooks can't address. Tokenomics, DAO governance, and cross-border compliance aren't edge cases. They're core operations. To meet these demands, a support ecosystem has taken shape: Carta for equity and token cap tables, CoinLedger for crypto tax, Chainalysis for compliance, and BlockOffice for CFO structuring and support. Take BlockOffice, for instance. The firm provides back-office services to AI, Web3, and frontier tech startups, as well as offshore funds. The firm supports over 1,000 companies globally with entity structuring, tax, crypto accounting, regulatory guidance, and fractional CFO services. Clients have raised over $500M, with some backed by BlockOffice Ventures. Its modular, execution-first approach helps founders handle financial and regulatory complexity at scale. The rise of fractional leadership is forcing founders to rethink how they structure executive roles. These interim (or part-time) executives often juggle multiple clients, and short-term engagements can create gaps in continuity. This can lead many to feel isolated. They're embedded just enough to carry the weight—but not enough to steer the ship. The solution? Smart startups are shifting how they work with fractional talent. Instead of treating them like employees, they're setting up the relationship more like a board role, with monthly strategic sessions and clearly defined deliverables. Some companies implement exclusivity during critical periods, while others establish guardrails to avoid conflicts. These choices help clarify what founders truly need from executive leadership. Even with structure, the model isn't frictionless. Joe Newbold, a seasoned fractional CFO, captures the intensity: 'If you think fractional CFO work is a way to get more work-life balance, you're in for a surprise. Startups don't sleep. If a founder hits a cash flow crisis on Wednesday, but you're not scheduled until Thursday, do you just ignore them? If you're serious about this career, you need to be constantly available.' This level of responsiveness blurs the line between fractional and full-time roles, demanding not just expertise but deep commitment. Competing priorities and limited bandwidth can leave fractional executives overextended in high-pressure situations. The instability of short-term engagements, which can end abruptly, adds further risk. Cultural integration adds another layer of complexity. Even with limited face time, fractional leaders must align with company values, workflows, and expectations. Maintaining cohesion with full-time teams requires deliberate onboarding and clearly defined roles. Industry-specific constraints can be just as limiting. While sectors like biotech may benefit from strategic oversight during research phases, heavily regulated industries often require hands-on compliance that part-time roles can't sustain. The talent supply is thin, too—only around 1,000 biotech and pharma profiles on LinkedIn mention fractional work, underscoring the mismatch between demand and available expertise. The shift toward independent work isn't slowing down. According to the latest McKinsey American Opportunity Survey, 36% of the U.S. labor force identifies as independent workers today, up from 27% in 2016. Startups are embracing this trend—not just to cut costs but to access specialized, battle-tested talent without locking in long-term overhead—the same logic driving the rise of fractional executives. Fractional leaders offer more than experience. They bring cross-functional agility and pattern recognition from scaling diverse companies. Whether you're launching a stablecoin-powered fintech, building a programmable remittance platform, or preparing a DAO for investor scrutiny, these executives apply playbooks built across industries, not just within a single company. Given the soaring cost of growth capital, the economics now tilt heavily toward fractional leadership. For founders evaluating this path, the best entry point is often the most specialized need. Looking for someone who's navigated several IPOs, led international expansion, or built compliance frameworks from scratch? These are exactly the capabilities fractional executives deliver—without burning months of runway on permanent hires. This isn't a stopgap. It's the new blueprint for building breakout startups in a capital-constrained world.
Yahoo
4 hours ago
- Business
- Yahoo
Kroger lifts annual sales target on resilient demand for groceries
(Reuters) -Kroger (KR) raised its annual identical sales forecast on Friday, betting on robust demand for groceries at its stores even as consumers deal with still-high inflation. Demand for essentials and groceries has remained stable despite Americans pulling back on discretionary purchases, helping supermarket chains such as Kroger. Most other retailers have tempered their expectations for the year. Kroger has also invested in sprucing up its curbside pick-ups as well as its more affordable private label brands as it battles stiff competition from retail bellwether Walmart (WMT). Still, Kroger maintained its annual earnings per share forecast, with new CFO David Kennerley noting in a statement that the macroeconomic environment remained uncertain. The company expects full-year 2025 identical sales growth of 2.25% to 3.25%, compared with its prior target of 2% to 3% growth. Kroger reported first-quarter identical sales growth of 3.2%, beating analysts' average expectation of 2.4%, according to estimates compiled by LSEG. The grocer's shares were down marginally in premarket trading. They have risen about 7% so far this year. By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy Sign in to access your portfolio
Reuters
4 hours ago
- Business
- Reuters
Kroger lifts annual sales target on resilient demand for groceries
June 20 (Reuters) - Kroger (KR.N), opens new tab raised its annual identical sales forecast on Friday, betting on robust demand for groceries at its stores even as consumers deal with still-high inflation. Demand for essentials and groceries has remained stable despite Americans pulling back on discretionary purchases, helping supermarket chains such as Kroger. Most other retailers have tempered their expectations for the year. Kroger has also invested in sprucing up its curbside pick-ups as well as its more affordable private label brands as it battles stiff competition from retail bellwether Walmart (WMT.N), opens new tab. Still, Kroger maintained its annual earnings per share forecast, with new CFO David Kennerley noting in a statement that the macroeconomic environment remained uncertain. The company expects full-year 2025 identical sales growth of 2.25% to 3.25%, compared with its prior target of 2% to 3% growth. Kroger reported first-quarter identical sales growth of 3.2%, beating analysts' average expectation of 2.4%, according to estimates compiled by LSEG. The grocer's shares were down marginally in premarket trading. They have risen about 7% so far this year.
Yahoo
11 hours ago
- Business
- Yahoo
Mandatory notice of shareholding 19 June 2025
IDEX Biometrics ASA ('IDEX') discloses the following on behalf of a shareholder. Reference is made to the stock exchange notice from IDEX Biometrics ASA on 15 June 2025 regarding the share issue to personnel, and the notice regarding mandatory notification of trades on 20 June 2025. The subscription and allocation have been completed on 19 June 2025. Anders Storbråten, including associated company Pinchcliffe AS, will hold 975,635,000 shares in IDEX. Following registration of the share capital increase for the personnel placement, the ownership will represent 20.62 % of the shares and voting rights in IDEX. About this notice: This notice was issued by Kristian Flaten, CFO, on 20 June 2025 at 04:22 CET on behalf of IDEX Biometrics ASA. The information shall be disclosed according to section 4-2 of the Norwegian Securities Trading Act (STA) and published in accordance with section 5-12 of the in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
11 hours ago
- Business
- Yahoo
SolarWinds promotes insider to CFO seat
This story was originally published on CFO Dive. To receive daily news and insights, subscribe to our free daily CFO Dive newsletter. SolarWinds has promoted finance veteran Tim Karaca to the company's CFO seat, the software maker said Wednesday. Karaca most recently served for three years as the group vice president for strategic finance and investor relations at SolarWinds. His new role became effective on June 16, according to a press release. The finance leadership change comes as the Austin, Texas-based information technology management software provider defends itself against a Securities and Exchange Commission lawsuit stemming from a major cybersecurity breach in 2020. In 2023, the SEC sued the company and its chief information security officer, Timothy Brown, for allegedly defrauding investors by mischaracterizing cybersecurity practices that were in place at the company leading up to the 2020 breach. Both Brown and the company's then-CFO, J. Barton Kalsu, were put on notice during the agency's investigation that they could face charges. However, Kalsu ultimately wasn't named in the suit. In June 2024, SolarWinds announced that Kalsu resigned to 'explore other professional opportunities' outside the company. Karaca succeeds Lewis Black, who became CFO of the company following Kalsu's resignation. Black is 'transitioning out of the role after having led the company through many notable achievements,' a spokesperson said in an email. Prior to joining SolarWinds, Karaca did leadership stints at AIG, Microsoft and Bridgewater Associates. 'Tim's significant strengths in strategy, capital allocation, and operating discipline are critical to our growth-focused partnership with Turn/River Capital,' SolarWinds CEO Sudhakar Ramakrishna said in the Wednesday release. 'There is no one better suited to serve as CFO as we embark on this next chapter.' The transition also comes less than two months after the company went private after completing an agreement to be acquired by Turn/River Capital for $4.4 billion. Recommended Reading Disney CFO, ex-CEO named in shareholder lawsuit
