Who is stewarding your business?
Ben Grinsted
CFO Practice | C-Suite & Boards | Technology, Tech Enabled & Business Services
It is crucial that any business have a solid Finance Director / CFO who can prepare & steward a business towards a transaction event.
Any potential investor will want to understand the state of a business prior to making any financial investment, therefore having a leader in this capacity is essential.
The Pre-Transaction CFO
Is essential because if they operate effectively, they know the numbers & budgets they can provide crucial advice to the senior management which shall lead them towards and ultimately successful event.
Value Creation
- They are an adviser and strategic partner to the CEO
- Define and develop a robust finance function which provides quality management information
- By understanding business aspirations and goals, they can help shape the business operations, improve margins and performance
- Cash and working capital management
- Building an EMI scheme
- The ability to tell positive narrative to investors on the journey of the business and its future goals
- Your CFO will be building the foundations necessary to enable the business to move to the next level
Post-Transaction
The turnover rate of CFO’s is high within the PE market, and the majority of CFOs either resign or are replaced following a takeover or any new ownership structure.
I read recently an insight document by Deloitte and what was interesting to see where the numbers on post-transaction CFOs
- 60% of CFOs are hired under new ownership
- 20% joined at the time of the last buy out
- Less than 20% worked as CFO prior to new ownership
Financial Executive
5 年I absolutely agree that a good CFO can help make a successful transaction (and, conversely, a weak one can destroy value by failing to understand the value drivers). And I understand why a good CFO, having led a successful transaction, might want to resign to move on to do another deal elsewhere if deals are what drives them. But, where they don't resign, why are they so often not trusted by the new owners to continue to perform? Are all those CFOs doing something wrong, or is it just that PE investors feel that new ownership needs new leadership? And is there any evidence as to whether they are right in that belief?
A good point Ben , a good CFO? can be crucial to the success of an event, early investment will pay dividends in the longer term?