Why Would You Want to Work for a PE-Backed Firm?

10/24/2013 11.35 EST

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This article originally ran on CFO.com.  To view it, click here.   For CFOs who may be of a mind to hook up with a private equity-backed company, open your eyes wide and tread very carefully.   When speaking with senior financial executives about their career aspirations, the conversation often turns to a desire to work for a private equity-backed company. I am talking about a large majority of respondents here – at least 70 percent. When I ask why, the answer invariably focuses on the opportunity to participate in a transaction and the potential financial rewards to be reaped by doing so.   That is a pretty naïve answer. For every success story out there in private equity-backed firms, there are many more failures. Working in private equity is difficult, particularly for a CFO. Any financial officer contemplating making this type of move for the first time in his or her career must to go into it with eyes wide open. At a bare minimum, consider the following:   1. Not all private equity sponsors are created equal. The industry is not monolithic. In addition to industry specialization, private equity differentiates by what type of asset each firm considers. Is the firm buying the asset to clean up the balance sheet and quickly turn it over? Is the investment for long-term growth? Does the private equity firm have a habit of breaking up the companies in which it invests? CFOs contemplating such a move should investigate how the private equity...

The Growth Company CFO – What Works and What Doesn’t

06/03/2013 09.05 EST

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This article originally ran on CFO.com.  To view it, click here.   Over the past 15 years, I have had the privilege of assisting in the selection and placement of a good number of Chief Financial Officers for a diverse set of clients.  Throughout this experience, I’ve seen senior financial executives make successful transitions from industry to industry, from public to private companies and back, as well as adapt to wildly different cultures from company to company.  By and large, top-notch CFOs are a smart, flexible and pragmatic group of professionals.  However, in my experience, there is one divide that very few seem to successfully bridge – the transition from a large company to a small one.   By “small” I generally mean a growth-oriented company, usually backed by venture capital or private equity, which has designs to grow exponentially (i.e. not $25 million looking to grow to $50 million, but $25 million looking to grow to $500 million or more, usually followed by some type of exit via sale, IPO or some other transaction).  These companies present a unique challenge to a large-company CFO: they require not only a high level of financial and business sophistication to handle the complexity of managing rapid growth but also a high degree of self sufficiency and a strong hands-on orientation.   Regardless of how well these companies are funded, their resources are constrained relative to the level of support a big company CFO is accustomed to.   Therein lies the rub.  Finding...