Biotech CFO Job Description for Startups: Milestone-Driven Finance and Grant Management

Why Your Biotech Startup's CFO Is Not a SaaS CFO

Hiring your first senior finance leader is a critical step, but for a biotech startup, the stakes are uniquely high. Your financial narrative is not about monthly recurring revenue or customer acquisition costs. It is about translating complex scientific progress into a credible story of value creation, all while managing a burn rate that can feel relentless. An exceptional SaaS CFO can fail in this environment because the fundamental drivers of the business, from R&D capitalization to fundraising, are entirely different. This guide provides a practical framework for defining the role and finding the right financial leader for your specific stage.

The most common and costly mistake founders make is hiring a finance leader who applies a software playbook to a drug discovery or platform development company. In biotech, value is created in discrete, non-linear steps tied to scientific milestones, not smooth, predictable revenue growth. The financial planning for biotech startups must reflect this reality. A CFO accustomed to tracking ARR and churn will be unprepared for the complexities of managing long R&D cycles, where revenue may be years away.

Key Differences in a Biotech vs. SaaS CFO's Focus

This distinction is not academic; it directly impacts day-to-day operations and strategic decisions. Here is a direct comparison of where a CFO’s focus lies in each business model.

Primary Metrics

A biotech CFO lives and breathes the cash runway and burn rate relative to scientific milestones. Their primary goal is to ensure the company has enough capital to reach the next value inflection point. In contrast, a SaaS CFO is focused on Monthly Recurring Revenue (MRR), Annual Recurring Revenue (ARR), and scaling those figures predictably.

Financial Model Drivers

The engine of a biotech financial model is a series of R&D milestones, such as completing preclinical studies or filing an Investigational New Drug (IND) application. For a SaaS business, the model is driven by commercial metrics like Customer Acquisition Cost (CAC), Lifetime Value (LTV), and churn rate.

Revenue Timelines

Biotech revenue is often a distant prospect, typically five to ten years away, if not longer. A SaaS company, however, usually generates revenue immediately upon acquiring a customer, with a financial focus on the first 12 months of that relationship.

Key Accounting Standards

In the US, biotech accounting is heavily influenced by R&D accounting rules (ASC 730), which govern how research costs are expensed. SaaS companies, on the other hand, are primarily concerned with revenue recognition standards (ASC 606).

Funding Sources

Biotech startups rely heavily on equity from venture capital and non-dilutive grants from bodies like the NIH in the US or Innovate UK. SaaS companies also raise VC funding but often supplement it with debt financing and, most importantly, customer revenue.

The Investor Story

A biotech CFO’s narrative is about de-risking the science and showing clear progress toward clinical trials. A SaaS CFO tells a story about scaling the go-to-market engine and optimizing unit economics for profitable growth.

The reality for most pre-seed to Series B startups is more pragmatic: your finance function, whether run by a founder or a consultant, lives in accounting software like QuickBooks or Xero and a series of complex spreadsheets. The right finance leader knows how to leverage these tools to model scientific scenarios, not just report historical spending.

Core Biotech Startup CFO Responsibilities

A great biotech CFO does more than close the books and manage payroll. They are a strategic partner to the CEO and Chief Scientific Officer, translating scientific strategy into a viable financial plan. Their role encompasses four core areas.

1. Master Milestone-Driven Financial Modeling

This is the central pillar of financial planning for biotech startups. Instead of forecasting sales, the CFO models the company’s cash runway against key scientific milestones. They answer questions like, "What is the cash impact of accelerating our lead compound's toxicology study?" or "If we receive positive assay results two months early, how can we reallocate capital to advance a secondary program?"

Consider a startup with an 18-month runway. The plan includes a crucial toxicology study in month 12 that costs $500,000. The CFO's model will not just show a flat monthly burn; it will show a capital-intensive period around month 12. If the science team finds a way to get the same results for $400,000 by using a different contract research organization, the CFO can immediately model the impact. This shows how that $100,000 savings extends the company’s runway by another month, potentially buying critical time to hit the next fundraising milestone.

2. Manage a Mixed Capital Strategy

Biotech startups rarely survive on venture capital alone. A key part of the biotech fundraising strategy is securing and managing non-dilutive funding. The CFO must be fluent in the language and compliance requirements of these sources. The pattern across biotech is consistent: founders need a finance lead who understands both sides of the funding coin. Common non-dilutive funding sources include NIH grants in the US, and Innovate UK or Wellcome Trust grants in the UK. Each has its own application, reporting, and audit requirements. For US offerings, be aware of Form D filing timing. A CFO's ability to layer this grant funding on top of equity investment is crucial for extending runway without giving up more of the company.

3. Ensure Rigorous Grant and R&D Compliance

Mismanaging grant funds can damage credibility and lead to financial penalties. For US companies, this means a deep understanding of R&D accounting under US GAAP. The key R&D accounting standard, ASC 730, dictates that most R&D costs are expensed as incurred, which impacts financial reporting and tax strategy. A best practice for both UK and US companies is implementing 'SOX-lite' internal controls for grant fund management. This means having clear processes for tracking expenses against specific grant budgets, ensuring funds are not co-mingled, and maintaining audit-ready documentation in your accounting system. For government grant accounting, you can also refer to IAS 20.

A scenario we repeatedly see is a startup facing a grant audit. One team, due to a reporting error, had to return a portion of their grant because they could not produce sufficient documentation proving certain personnel costs were allocated to the grant-funded project. This not only created a cash crunch but also damaged their relationship with the funding body, jeopardizing future applications.

4. Drive Strategic Communication with Investors and the Board

Finally, the CFO is the lead storyteller for the company’s financial health and strategy. They must translate complex R&D progress into a clear financial narrative for the board. For instance, explaining a budget variance is not just about the numbers; it’s about the science. A strong CFO might say, "We are 15% over our R&D budget this quarter. This is because the positive data from our in-vivo study allowed us to pull forward the chemistry work planned for next quarter. This accelerates our timeline to IND-enabling studies by three months, which is a significant value inflection point we believe is worth the temporary budget increase."

Crafting a Job Description That Attracts the Right Biotech CFO

A generic CFO job description will attract the wrong candidates. You need to be explicit about the biotech-specific challenges and responsibilities. Avoid vague terms like "manage financial operations." Instead, focus on the outcomes you need.

Key Responsibilities

• Develop and maintain the company’s long-range, milestone-driven financial model to guide strategic decisions and manage cash flow.
• Lead all biotech fundraising strategy, including equity rounds and non-dilutive grant applications (e.g., NIH, Innovate UK).
• Oversee all accounting operations, ensuring compliance with US GAAP (specifically ASC 730 for R&D) and grant-specific reporting requirements.
• Implement and manage 'SOX-lite' internal controls to ensure robust financial governance and audit readiness.
• Serve as a strategic partner to the leadership team, translating scientific milestones into financial impact for the Board of Directors and investors.
• Manage relationships with investors, banking partners, and auditors.

Qualifications and Experience

When listing qualifications, it is vital to separate the absolute must-haves from the nice-to-haves. This widens your pool without compromising on core competencies.

Must-Haves

• A typical experience threshold for senior biotech finance roles is 10+ years, with a significant portion in an early-stage (Pre-seed to Series C) biotech or pharma environment.
• Demonstrable experience raising capital from both VCs and non-dilutive sources.
• Deep expertise in biotech accounting, including US GAAP, ASC 730, and grant reporting.
• Experience building and managing complex, multi-year financial models from scratch in Excel.

Nice-to-Haves

• CPA or MBA.
• Experience in a large public pharma company, which is helpful for understanding future needs but not a substitute for startup experience.
• Specific therapeutic area expertise.

The Litmus Test Interview Question

To separate strategic thinkers from pure accountants, ask a scenario-based question. For example: "Our lead program just produced unexpected positive data, suggesting a new therapeutic application. Pursuing it requires an unbudgeted $1 million investment over the next six months. Our current runway is 15 months. Walk me through how you would analyze this decision and communicate a recommendation to the board."

A weak answer: "I would update the budget to show the $1 million expense, calculate the new, shorter runway, and present the numbers to the board for a decision."

A strong answer: "First, I'd work with the CSO to model the scientific and commercial assumptions of this new application. Then, I’d update our financial model to show the impact on runway, but also map out what milestones this $1 million investment could achieve. I’d frame the conversation for the board not as a budget increase, but as a strategic trade-off. We could either use the capital to accelerate a potential blockbuster or preserve our current runway. I'd also immediately start to map out non-dilutive funding options that might align with this new application to offset the cost."

Matching the Finance Role to Your Startup's Stage

The seniority of your first finance hire should match your company’s stage and complexity. The key funding stages that typically dictate finance hire seniority are Pre-Seed/Seed, Series A, and Series B.

Pre-Seed and Seed Stage

At this early stage, a full-time, strategic CFO is often premature. The primary needs are setting up accounting systems (QuickBooks or Xero), managing payroll, and handling initial grant applications. This can typically be managed by a skilled fractional CFO or an experienced, hands-on controller. The focus is on clean bookkeeping and basic burn-rate tracking.

Series A Stage

After raising a significant round, financial complexity increases. You need someone to manage the new capital, build a more robust long-range model, and establish formal financial processes. A full-time VP of Finance or a Director of Finance is often the right hire. They are more hands-on than a strategic CFO but have the capacity to grow with the company.

Series B and Beyond

Your company is now maturing. Fundraising rounds are larger, the pipeline may be more diverse, and you are likely looking ahead to clinical trials or strategic partnerships. This is when a true strategic CFO becomes essential. They are not just managing finance; they are a key member of the executive team shaping the company's future, leading large financing rounds, and building relationships with public market investors.

Practical Takeaways for Founders

Hiring the right finance leader is one of the most important decisions you will make. It is a role that requires a rare combination of technical accounting skill, strategic foresight, and a deep understanding of the scientific process. The wrong hire, particularly one with a SaaS background, can lead to flawed models, missed funding opportunities, and a loss of investor confidence.

To avoid this, focus your search narrowly. Prioritize direct, early-stage biotech experience above all else. Use your job description to filter for candidates who speak the language of milestones, grants, and clinical pathways. Finally, match the seniority of the role to your startup's current funding stage. By being deliberate and specific in your search, you can find a financial partner who will not just count the cash, but help you build a company that can go the distance. Use our 90-day onboarding plan after you hire.

See our building your finance team hub for more guidance on sequencing your hires.

Frequently Asked Questions

Q: What is the biggest mistake to avoid when hiring a biotech CFO?
A: The most common mistake is hiring a finance leader from a SaaS background. Their expertise in metrics like MRR and CAC does not translate to the milestone-driven, long-term R&D cycles of biotech. Prioritizing direct biotech industry experience is essential for creating credible financial models and strategy.

Q: At what stage does a biotech startup need a full-time CFO?
A: A strategic, full-time CFO typically becomes essential at the Series B stage when financial complexity, fundraising needs, and team size increase significantly. For earlier stages, a fractional CFO, VP of Finance, or a hands-on controller is often a more appropriate and cost-effective choice.

Q: Why is non-dilutive funding so important for a biotech startup?
A: Non-dilutive funding, such as government grants, is critical because it extends the cash runway without forcing the company to give up equity. In a capital-intensive industry with long development timelines, this type of funding provides vital resources to reach key scientific milestones between venture capital rounds.