CFOs: A Strategic Partner to CEOs

Key roles of a CEO:

  • Leader of the organization
  • Focused on value creation and growth
  • Often sales-oriented
  • Many external audiences

Key roles of a CFO:

  • Internally facing
  • Responsible for accurate reporting
  • “Makes sure the trains run on time”
  • Collaborates with sales and operations
  • Oversees strategic initiatives and M&A

“The healthier the relationship between the CEO and CFO, the better the outcome for the whole organization.”

—Current senior operating executive at PE firm

Attributes Valued by Private Equity

Sense of Urgency: Typically have 1-3 years to effect change before the company is sold. As soon as you start, the clock is ticking.

Teamwork: Required to change the trajectory of a business.

Bias Toward Action: Decisions must be made, implemented quickly and reversed when necessary.

Problem Solving Focus: Find out what is wrong (or needs improvement) and fix it.

Goal-Oriented: MOIC, IRR, EBITDA, exit multiple (the better the company, the better the multiple).

Skills Needed in Private Equity

Financial expertise and deep accounting knowledge is essential. Broad sector knowledge is helpful, specific sub-sector familiarity is ideal.

Ability to build, motivate and manage the finance team.

Understand and coordinate with operations, sales & marketing, HR and other functions.

Communication skills – must be clear and concise and able to drive meetings, including board meetings.

Implementation oriented.

“PE firms want a CFO who is thinking about operations from a financial management perspective and always focused on equity value creation.”

— 2x Private Equity-backed CFO