CFOs Play Expanding Role in Value Creation for Private Equity Backed Firms
Authored By Eric Walczykowski
With hold periods getting longer and deal flow still in gridlock, CFOs play a more critical role than ever in driving value creation for private equity-backed companies.
I recently sat down with Nick Donlan, Parter in Bespoke’s Finance practice to discuss trends his team has been seeing, and how CFOs can be a driving for across all phases of the deal cycle.
Be sure to catch the full interview here. Below is a summarized Q and A of my conversation with Nick.
Eric: Nick, what trends are you seeing for top-tier CFO candidates looking for in their next role?
Nick: It’s no secret that finding proven, sitting CFOs has been a challenge in recent years, especially as hold periods have extended and the macro environment has remained competitive. We often encourage our clients to broaden their search, considering candidates with experience in public companies or even venture-backed environments. These candidates might not have a PE background but could still be a great fit. The key is finding someone who balances operational expertise with the ability to be a strategic partner to the CEO and the board.
These top CFO candidates often have multiple opportunities to choose from, so clients need to move fast through the interview and offer process. We’re also seeing very competitive offers right from the start. CFOs are looking for roles with different scopes depending on where they are in their careers or the current market.
Eric: What are some of the criteria our CFO candidates are assessing during an interview process, considering today’s market?
CFOs are doing as much diligence on the company as the company is doing on them. They want to understand the team, the market opportunity, and the state of the finance and accounting function. Are the basic reporting systems and financial structures in place? And once those are set, how can they partner across functions, especially with sales and marketing, to drive both growth and profitability? CFOs want to make sure they have the capacity to contribute strategically, particularly in areas like M&A, rather than just managing basic financial reporting, which is more the role of a controller.
Eric: Why is M&A so attractive to CFOs as part of their responsibilities?
Nick:
Many CFO candidates are drawn to M&A because it allows them to scale a company quickly. We’ve seen a lot of roll-ups recently where M&A plays a big role in the value creation plan. CFOs who have experience with due diligence, integration, and executing the playbook are in high demand. They bring structure and performance management to the process, helping drive operational excellence post-acquisition. For CFOs with a sense of urgency and a focus on continuous improvement, M&A offers a great opportunity to build something scalable, whether it’s improving customer success or expanding the go-to-market organization.
Eric: When we talk about growth strategy and optimization, how are CFOs being asked to drive growth today, and what do you see in the next 6 to 12 months?
Nick:
The challenge for any CFO is understanding all aspects of the business, not just finance. CFOs are increasingly partnering with go-to-market teams to ensure growth is sustainable. We’ve seen companies that focused on top-line revenue growth but didn’t necessarily consider the efficiency of their sales organizations. CFOs are stepping in to revise compensation plans, ensuring that they incentivize value creation—whether through higher margins or focusing on products that will generate better multiples at exit. CFOs are helping align the efforts of CROs and CMOs with the company’s overall value creation goals.
Eric: One area I wanted to explore is capital structures. Why do CFOs find engaging with capital structures so attractive?
Nick:
CFOs thrive on the strategic side of their role, including working with the board and bankers to optimize capital structures. Securing favorable terms from debt holders or positioning the company for a successful exit energizes them. We’ve seen CFOs build strong relationships with funds, where they might handle multiple portfolio companies or move into an operating partner role. It’s a natural progression for CFOs who have successfully guided portfolio companies through exits.
Eric: That’s a great point. Strong relationships with funds often lead to CFOs being placed into other portfolio companies or taking on broader roles. How important is that network for a CFO?
Nick:
It’s crucial. We’ve seen many CFOs transition into operating partner roles after successful exits, where they help guide other CFOs in the portfolio. They bring best practices and operational improvements, which can be invaluable for driving success across multiple companies.
Eric: Another trend we’ve seen recently is a heightened focus on cash flow management. Why is that so important right now?
Nick:
In recent years, the focus has been on top-line growth, but both public and private markets are now placing more value on operational efficiency. Ensuring there’s enough cash to operate is critical. CFOs are focusing on tactical elements like reducing days sales outstanding and ensuring cash flow is optimized. While these tasks can sometimes be overlooked, they’re essential for long-term success, especially in a changing market where M&A and growth initiatives are key drivers of value.
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Author:
Eric Walczykowski
Chief Executive Officer
Eric is passionate about building high-performing teams that value doing their best, working together, overcoming adversity and learning.
As a proven growth executive, Eric has served as CEO, President, Board Member, Investor and Advisor for technology companies that achieved over $4.5B in successful exits.
Eric brings to Bespoke Partners significant professional services experience from Deloitte and Andersen, as well as the high-growth client executive perspective for private equity-backed technology companies.
Eric earned an MBA from the Kellogg School of Management at Northwestern University and a BS in Business from Fresno State University.
Outside of work, Eric enjoys spending time with family, coaching baseball, travel, attending live events and sipping good wine.
Featuring:
Nick Donlan
Partner,
CFO Practice
With a focus on CFO searches for private equity-backed software companies, Nick has placed operational CFOs who’ve driven exceptional outcomes on behalf of top sponsors including Thoma Bravo, Francisco Partners, and TA Associates. Nick has also been an integral part in building out executive teams at Quest, Imperva, Instructure, Insurity, Paycor, ABC Fitness, MeridianLink, Quorum Software, Redwood Software, and others.
During his 10+ years at Bespoke’s Austin office, Nick has orchestrated successful placements of high-impact executives for a wide spectrum of clients, from growth-oriented, pre-IPO companies to buyouts to complex carveouts and turnaround situations. He has experience placing executives in pre-IPO and recently public SaaS companies, including nCino, Paycor, Duck Creek, and Pluralsight.
Prior to joining the Bespoke team in 2016, Nick worked at GLG, where he supported private equity and venture capital firms in deal origination and due diligence efforts.
Nick graduated cum laude from Dartmouth College, where he received a Bachelor of Arts in Government and competed for the College’s policy debate team.
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