I’m Bhavesh Naik, host of The Business Philosopher Within You. In a recent conversation I had the privilege of hosting Ellen Wood, CEO and co‑founder of VCFO, a firm that pioneered the virtual CFO (vCFO) model in 1996. Ellen and her team have supported more than 6,000 clients over nearly three decades, blending finance, operations and people strategy to help companies grow and increase shareholder value. Below I capture the lessons, stories and practical guidance she shared for entrepreneurs, leaders and finance professionals.
The spark: why the virtual CFO was needed
Ellen’s story begins not with a business plan but with a personal need. As a young CFO working on complex M&A transactions for a telecommunications company, she confronted how little practical training executives often receive for irregular but mission‑critical events—acquisitions, integrations and financing rounds. Those high‑value activities are episodic in most small and mid‑sized businesses. To stay engaged in them without becoming a full‑time employee of a single company, Ellen realized she needed to serve multiple clients at once. That realization was the genesis of VCFO: a firm structure that made fractional, high‑level financial leadership both accessible and sustainable.
Market timing and the Austin tech ecosystem
VCFO’s founding in Austin in 1996 was fortunate timing. The city was beginning to attract venture activity and early tech investment—Dell, Austin Ventures and other players were shaping a market that needed scalable financial expertise. Ellen’s early work with newly funded tech companies proved the model: early-stage teams wanted CFO‑level reporting and strategic guidance without the cost of a full‑time CFO. From there VCFO expanded into a broader base of industries, emphasizing an important principle Ellen recommends to every firm building out its client mix:
Diversify your client base: Finance skills travel across sectors; avoiding over‑reliance on one industry reduces risk.
What VCFO actually does
VCFO provides everything that lives in the “office of the CFO,” delivered on a fractional or virtual basis. Ellen’s team includes CFOs, controllers, staff accountants and a full HR practice. Their engagements typically follow a consistent logic:
Start by understanding what the owner or CEO wants to accomplish—exit, scale, optimize, or survive.
Assess the current financial and operational foundation, including cash flow and forecasting.
Deliver tactical fixes where urgent (audits, clean books) while building a phased strategic roadmap to improve operational excellence and value.
One concrete early deliverable Ellen highlighted is the 13‑week rolling cash flow. For many small and mid‑sized businesses, cash is the most immediate risk—and getting a clear short‑term picture is often the first thing that unlocks better decision making.
Phased engagement and transition
VCFO advises clients in phases, targeting the highest‑impact fixes first and working within budget constraints. When appropriate, the firm helps clients hire their own full‑time finance staff—Ellen describes this as being “the CFO you’d want, but at the right price point.” As a client grows, the engagement often transitions from fractional to full‑time internal hires, with VCFO continuing in advisory or interim roles as needed.
Who is the ideal client?
Ellen summarized her typical client as a company with $10M–$100M in revenue and roughly 20–200 employees, often led by a CEO or founder who needs strategic financial leadership but not necessarily a full‑time CFO. There are exceptions—VCFO has supported larger organizations in special circumstances—but this range represents their core sweet spot.
Culture, people and the finance connection
One of the most powerful themes Ellen emphasized is the interdependence of finance and human capital. VCFO embeds HR capability into its offering because culture and people have real, measurable impacts on the bottom line—turnover, regulatory missteps, visa compliance and unpaid payroll taxes can all produce material cost and risk.
“Put people first.”
That phrase is central to VCFO’s values, with integrity following closely behind. Ellen explained that assessing culture, retention and process often reveals hidden drains on value—missed revenue opportunities, higher cost of sales, and inefficiencies that don’t show up as explicit line items on a P&L.
Building VCFO from the inside: systems, EOS and accountability
Internally, Ellen attributes a major part of VCFO’s scalability to disciplined operating systems and clarity of roles. Key initiatives included:
Adopting the Entrepreneurial Operating System (EOS) in 2018 to create an accountability chart rather than a mere organizational chart—clarifying roles, responsibilities and meeting rhythms.
Using RACI (Responsible, Accountable, Consulted, Informed) for key processes so everyone knows who does what and who needs to be looped in.
Applying hiring tools such as predictive index assessments and gathering employee NPS to constantly tune culture.
Ellen credits that operational clarity with allowing VCFO to pivot quickly—most notably during the COVID lockdown in 2020 when the team shifted seamlessly to remote operations.
Riding crises and the lesson of 2008
Ellen has weathered multiple downturns, and she shared both tactical and philosophical lessons from the 2008–2009 crisis, when expansion and infrastructure investments collided with a dramatic market collapse:
Take stock early—don’t bury your head in the sand.
Create contingency plans with clear tripwires for action.
Be willing to “pull the lever” and execute cost reductions decisively rather than delay and lose optionality.
Act as a resource for your community—VCFO convened clients and introduced alternative financing sources when banks tightened credit.
Her core counsel for leaders facing shocks is simple and actionable: prepare, decide, execute—and keep looking for opportunities that crises can create.
Leadership, learning and personal grounding
Over decades of leading a professional services firm, Ellen says she’s become more tolerant and empathetic. A guiding maxim she shared:
“There are 13 sides to every story—hear them before you decide.”
Being grounded, true to your values, and open to learning from others are not contradictory. Ellen believes the more secure you are in who you are, the better you can listen, learn and change course when warranted.
Advice for founders: focus on shareholder value
Perhaps the clearest strategic takeaway Ellen left with my audience is this: at every stage of your company’s life, measure and manage for shareholder value—not just topline growth or headcount. She recommends entrepreneurs pause periodically and honestly ask:
What is my company worth today in the marketplace?
What things (customer concentration, cultural gaps, regulatory risks, weak margins) are depressing that value?
What measurable changes can I weave into my strategic plan to improve value over 12–36 months?
This shift in perspective reframes decisions—investment, hiring, process and even M&A—around long‑term value creation rather than short‑term revenue metrics.
A real client story
To illustrate VCFO’s approach, Ellen told me about a family‑owned business in Colorado with a 15‑year relationship. VCFO began by installing a fractional CFO and controller, helped build HR infrastructure, and then supported the company through growth, turnover and recruitment cycles. Today that client still engages VCFO for CFO leadership while relying on internal hires for other roles—exactly the phased evolution Ellen described.
Where to start and how to connect
If you’re a founder, CEO or board member curious about embedding operational finance and people strategy into your growth plan, Ellen suggests a practical first step: take stock of your value today and build a contingency/strategic plan that includes clear tripwires.
She’s open to conversations and can be reached via LinkedIn for questions about finance, HR, or board roles.
Closing thoughts
From my conversation with Ellen Wood, three themes stood out for anyone building a business that lasts:
Design for value: Measure and manage your company as an asset, not merely a revenue machine.
Integrate finance and people: Culture, compliance and HR are core drivers of operational performance.
Build disciplined systems: Clear accountability, contingency planning and operational rhythm let you pivot and scale.
Ellen’s journey from a single CFO confronting M&A complexities to leading a firm that has guided thousands of companies is a powerful reminder: the right combination of domain expertise, empathy and disciplined execution creates services that truly scale—and businesses that stand the test of time.
Get In Touch With Ellen Wood or VCFO
Ellen can be reached through her Linkedin account. To find out more about vcfo, visit their website.
This article was created from the video The Rise of the Virtual CFO: Building a Business that Lasts.
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