Fractional Manager supports startups. We ask to an expert

An introduction on the Fractional Manager for startups

Introduction to the Fractional Manager with an expert to understand the benefits for startups.

Let’s meet Marcello Marzano of Studio Emme Emme and Associate Partner at YourCFO!

Marcello Marzano is a CPA and Auditor with a solid experience of over 15 years gained in the business, initially as an auditor in Big4, and then in roles of increasing responsibility in Finance and Control.

Marcello has funded Studio Emme Emme and is an Associate Partner at YourCFO, as well as mentor and Associate Partner at Grownnectia and other leading incubators in Italy.

Hi Marcello, today we would like to ask you immediately when a startup team can be successful? What are the fundamental elements that cannot be missing?

Surely one of the fundamental characteristics is the completeness of skills within the team, something that we do not always find in all teams.

Sometimes there are startups made up of teams with very vertical skills on the product but with gaps in other areas. Can the lack of some internal skills be compensated in other ways?

Very strong startups on the technical side but weak on other equally important areas (marketing, finance, personnel management) are a very frequent situation.

In my experience, this happens because the teams are assembled starting from the technical side, these shortcomings can be compensated with professionals, but it must be done without weighing excessively on the liquidity of the startup which, at the beginning, always has a high cash burn rate.

Today we often hear about Fractional Management, and we ask you to explain this concept because, among other things, you are also Associate Partner of YourCFO. What does Fractional Management consist of, and can it also be applied to startups?

The Fractional manager is a managerial professional who can also be at the service of startups. Fractional management is inspired by a model born in the USA in the early 2000s and brought to Italy by yourCFO (which later evolved into YOURGROUP), a company founded by Andrea Pietrini, Chairman of YOURgroup and creator of the first Italian Fractional Executive project. 

Five years ago, after a complex selection process, I joined the network that today includes almost 200 professionals out of 8 different verticals.

The advantages for companies and even more for startups lie in flexibility and costs: 

• flexibility because the company can use the manager’s time in a way that is more suited to their needs,
• costs because a fractional executive, being used for a shorter period of time, with the same effectiveness, has less impact on the company “P&L”.  

Speaking of high vertical skills in finance, how often are these skills lacking in startups? Do you want to tell us about the main problems you have encountered regarding the lack of financial culture?

Very often there is a lack of ability to evaluate well the impacts of one’s choices in terms of income and finance. Making or not making a choice always has effects and those who are not technicians are not always able to evaluate them correctly.

As Finance Fractional Manager, in which activities are you mostly helping startups and SMEs and how do you operate?

The fractional CFO works in the company two or three days a week, making his job an intermediate formula between managerial support and consultancy, but always with a very operational vision.  To make a joke, we are not the ones who prepare the slides, but we are the ones who get their hands dirty.

What is the activity most requested by Italian startups to a Fractional manager?

The activities on which a Fractional CFO can be more useful are numerous and may concern the management of critical issues related to cash flows, the improvement of profitability and margins, cost cutting or organizational downsizing and management of M&A transactions.

In which startup phase do you most need a Fractional Finance Manager?

Without being too pretentious, I would like to say that a startup always needs a Fractional Finance Manager. What makes the difference is how long it takes.

In today’s world where VUCA (Volatility, Uncertainty, Complexity and Ambiguity) scenarios are normal, each phase has its own complex problems and to solve them it is necessary to have high skills.

What relationship is created with the founding team, what is your coaching style and your approach to work?

The relationship created is remarkably close because if you have the right character, you somehow become part of the team without being one.

My personal style is very constructive: my assertive communication allows me to interact with others in any relational context in an effective and adequate way, affirming my points of view without diminishing those of others.

Being assertive allows me to have better interpersonal and professional relationships, to face critical issues decisively but also with proactivity, and this generally leads to having a good working environment within the startup team.

How long does the collaboration last and when is the startup ready to walk on its own feet?

One of the strengths of the fractional manager is precisely this. This formula has undoubted advantages: first of all, the fractional or part-time formula, which makes it a more suitable tool for smaller companies such as startups, favoring the distribution of the manager’s cost among several projects; secondly, a fractional project can have a longer duration than a temporary project, because it can satisfy a “fractional”, but not necessarily “temporary” need; finally, the fractional manager works for several customers, moves from one company to another, organizing his agenda either vertically (one or more days a week) or horizontally (only half a day).

A Fractional manager activity can last for years.

If you are a startup founder and you need high skills in finance, do not hesitate to contact me at: m.marzano@yourcfo.it 

Read also the other interview with Marcello Marzano: Mentor, alongside the founders, from the genesis of an idea to the startup