We’re proud to announce the fourth annual Top Private Equity Innovators with the 2025 BluWave Awards*.
“We’re regularly asked by market leaders about the best practices that are being embraced by the most innovative private equity firms,” said BluWave founder and CEO Sean Mooney, talking about the impetus for creating the awards.
Our objective, thorough process gathered feedback from the world of private equity as well as the top service providers that work with them on a daily basis.
With their help, we identified the top 2 percent of firms for their innovative practices based on four key criteria identified by our research and operations team, limited partners, investment bankers, industry thought leaders and service providers in the private equity ecosystem.
As part of its selection process, the selection committee evaluated more than 6,000 private equity firms and utilized more than 75 different factors, incorporating more than 400,000 data points to evaluate these four criteria.
Here’s a little more about each one.
Proactive Due Diligence Practices
Innovative PE firms look at prospective investments with an eye toward not only trusting and verifying, but also with a preemptive lens into informing future value creation opportunities.
Transformative Value Creation
Once PE firms make investments leading private equity firms partner with their portfolio company management teams to purposely create value that didn’t or couldn’t exist before.
Modern Private Equity Firm Operations
These PE leaders treat the business of private equity like a business. They strategically utilize best-in-class internal and external cross-functional resources to enable insightful opportunity assessments and unique levels of value creation.
Corporate Citizenship
Top PE firms know that corporate citizenship is not only good for the world, but also fundamentally improves returns.
“We are excited to recognize this distinguished group of investors as the 2025 Top Private Equity Innovators,” Mooney said.
*BluWave, LP has not received investment capital from and holds no ownership interest in the PE firms evaluated or recognized under the Top Private Equity Innovator awards program. BluWave received no compensation from any of the PE firms in connection with this awards program. However, BluWave may otherwise provide services to the PE firms and/or their portfolio companies, but BluWave confirms that its assessment of the PE firms was independent of any such service arrangements. Top 2% in the PE industry is based on BluWave’s review of the more than 6,000 PE firms in the U.S. and Canada from which the 103 PE firms were selected as award recipients.
We’re proud to announce Alpine Investors as Innovator of the Year in the fourth annual BluWave private equity awards*. The San Francisco-based firm was selected for its for exemplary innovation and leadership.
“Innovation is at the heart of everything we do at Alpine,” said Graham Weaver, CEO and Founder of Alpine. “Building a culture of innovation starts with a people-first mindset – listening, learning and creating space for bold ideas. Some of our best strategies have come from this mindset – what we call planting the oak trees today that will provide shade tomorrow. We are honored to be recognized as this year’s Top Private Equity Innovator and remain committed to pushing boundaries and driving meaningful change.”
“Private equity is an essential business builder and pillar of the economy, facilitating growth and development in almost every industry and creating millions of jobs in America,” said Sean Mooney, BluWave founder and CEO. “Alpine Investors has differentially demonstrated how to build and grow businesses. We congratulate them on their innovation and success in creating value.”
*
BluWave, LP has not received investment capital from and holds no ownership interest in the PE firms evaluated or recognized under the PE Innovator awards program. BluWave received no compensation from any of the PE firms in connection with this awards program. However, BluWave may otherwise provide services to the PE firms and/or portfolio companies, but BluWave confirms that its assessment of the PE firms was independent of any such service arrangements. Top 2% in the PE industry is based on BluWave’s review of the more than 6,000 PE firms in the U.S. and Canada from which the 103 PE firms were selected as award recipients.
Growing businesses often rush to build internal finance teams, but this approach can strain resources and limit growth potential.
Choosing between outsourcing and building an internal team requires careful evaluation of costs, capabilities and business needs. A strategic mix of internal staff and outsourced expertise often provides a great alternative.
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Building an internal finance team might seem logical for growing businesses. Premature scaling creates financial strain, though. The costs associated with recruiting, onboarding and training new team members are substantial.
One significant aspect is the financial commitment to maintaining a full-time staff. Salaries, benefits and other employment-related costs can quickly add up, creating a financial burden. The initial investment required for technology, software and workspace to support new hires further compounds these expenses.
Another challenge is the time investment required to build and integrate an internal team effectively. The recruitment process alone can be resource-intensive. Finding the right talent to meet your business’s specific needs often requires extensive vetting and interviewing, shifting attention from other critical business activities.
Moreover, the expertise needed for specialized financial functions can be challenging to find within a small talent pool. Businesses may end up hiring less experienced individuals, leading to inefficiencies and potential errors in financial management. This can affect long-term financial stability and growth.
In contrast, outsourcing accounting services provides immediate access to skilled professionals with the necessary expertise. This approach allows businesses to benefit from high-quality financial management without the upfront costs and long-term commitments associated with building an internal team. Outsourcing also offers the flexibility to scale services according to business needs, ensuring that resources are used efficiently and effectively.
By evaluating these factors, businesses can make informed decisions about the most cost-effective and strategic approach to managing their financial operations, considering the long-term benefits and potential drawbacks of scaling an internal finance team too early.
Outsourcing can address several prevalent challenges that businesses frequently encounter:
Rapid Growth: As businesses expand swiftly, the internal team might struggle to meet increased financial demands. Outsourcing offers a way to manage these spikes without overburdening existing resources
Integration After Mergers: Post-merger scenarios often require a higher level of financial oversight to ensure smooth transitions. Outsourcing can provide the needed expertise to handle these complex integrations
Temporary Leadership Shortages: Organizations might face periods where critical financial roles remain unfilled due to transitions or unexpected departures. Outsourcing ensures that these gaps are filled with qualified professionals, maintaining stable financial operations
Outsourced accounting services offer a strategic solution for businesses facing challenges in finding and retaining specialized financial talent. One of the primary advantages is access to professionals who bring extensive knowledge and experience in various financial domains. These experts understand industry best practices and regulatory requirements, enabling businesses to handle complex financial challenges confidently.
Furthermore, outsourcing allows businesses to leverage advanced technologies without the associated costs of purchasing and maintaining these tools. Many outsourced accounting firms are equipped with the latest software and systems, ensuring that clients benefit from efficient and accurate financial management. This technological edge can improve overall financial performance and streamline processes.
Another critical benefit of outsourced accounting is the ability to scale services according to business needs. Whether a company is experiencing rapid growth or seasonal fluctuations, outsourcing offers the flexibility to adjust the level of financial support required. This adaptability ensures that businesses can manage their resources efficiently, avoiding the pitfalls of overstaffing or understaffing.
Outsourcing also reduces the risk associated with employee turnover. Internal finance teams may face disruptions due to unexpected departures or extended absences, leading to potential gaps in financial oversight. By contrast, outsourcing firms typically have a team of professionals ready to step in, ensuring continuity and stability in financial operations.
Additionally, outsourced accounting services can provide valuable insights and strategic guidance. Experienced accountants can analyze financial data, identify trends, and offer recommendations that support informed decision-making. This level of expertise can be particularly beneficial for small businesses that may not have the internal resources to conduct in-depth financial analysis.
Lastly, partnering with an outsourced accounting firm can improve compliance and risk management. Financial regulations change continually, and staying updated can be challenging for internal teams. Outsourced professionals specialize in compliance, ensuring that businesses adhere to relevant laws and standards, thereby reducing the risk of non-compliance and potential penalties.
Operational Efficiency: Outsourcing accounting services often leads to increased operational efficiency. Firms specializing in accounting are already equipped with the latest technology and best practices, which means they can provide immediate, high-quality service without the learning curve associated with new hires
Scalability: Outsourcing offers a high degree of scalability. Businesses can adjust their level of accounting support based on current needs without the long-term commitment of hiring full-time employees. This flexibility is particularly advantageous for businesses experiencing seasonal fluctuations or rapid growth
Access to Expertise: Outsourcing provides access to a broader talent pool with specialized skills that might not be available in-house. This ensures that businesses benefit from high-level expertise in various financial areas, such as compliance and advanced financial analysis, without the overhead costs of employing full-time specialists
Risk Management: Outsourced accounting firms often have protocols in place to ensure continuity of service, reducing the risk associated with employee turnover. They can quickly fill gaps caused by unexpected departures, ensuring consistent financial oversight and stability
Long-term Strategic Benefits: Outsourcing can lead to strategic advantages by allowing internal teams to focus on core business activities. Improved financial insights and enhanced focus on primary business functions often translate into a more significant return on investment
By carefully weighing these factors, businesses can determine whether outsourcing or maintaining an in-house team better aligns with their strategic and financial goals.
Deciding whether to transition to a fully in-house finance team or maintain a hybrid approach requires careful consideration of various factors specific to your business.
A hybrid model, combining in-house and outsourced accounting resources, can offer flexibility and a balanced approach. This strategy allows businesses to retain internal control over core financial operations while benefiting from the specialized expertise and scalability that outsourcing provides. For example, an in-house team might handle day-to-day transactions and strategic financial planning, while outsourced partners manage complex regulatory compliance and advanced financial analysis.
The readiness to transition fully in-house often coincides with a business achieving certain milestones. Indicators include sustained revenue growth, stable financial performance, and the capacity to bear additional overhead costs. These factors suggest that the business is mature enough to justify the investments in recruiting, training, and retaining a skilled finance team. It also implies that the business can support the ongoing expenses associated with maintaining and upgrading financial technology and systems.
However, even as businesses grow, maintaining a hybrid model can offer strategic advantages. This approach provides the flexibility to scale resources based on demand and ensures access to cutting-edge financial tools and expertise without the full costs of in-house implementation. It can also mitigate risks associated with turnover and absences, as outsourced partners can fill gaps seamlessly.
Ultimately, the decision should align with the business’s long-term strategic goals. By evaluating both current capabilities and future needs, businesses can determine the most effective structure for their financial operations, ensuring sustained growth and efficiency.
The Business Builders’ Network is full of pre-vetted outsourced accounting resources ready to help your company.
Our research and operations team already knows who you need before you contact us, and is prepared to connect you with a short list of industry-specific options.
Partnering with BluWave can give you more confidence in your strategy and help you get started within a single business day. Set up your scoping call today, and we’ll provide a short list of situation-specific resources to help your business.
Software development and IT operations traditionally functioned as distinct units. DevOps removes the barriers by bringing these teams together to share practices and goals.
This integration helps companies ship features and fixes faster while maintaining high quality. Small, frequent updates replace large, risky deployments.
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Data shows the impact: Companies using DevOps deploy code more frequently and have fewer failures. These improvements boost customer satisfaction and market responsiveness.
Legacy mindsets create a major barrier. Teams accustomed to working in isolation often resist the cultural changes DevOps requires.
Tool integration poses another significant challenge. Many mid-market companies rely on separate tools that don’t connect. This leads to confusion and inefficiency.
Finding skilled DevOps engineers proves difficult in today’s competitive market. The role demands expertise in automation, cloud platforms and container technologies.
Process Changes Drive Success
Continuous Integration and Deployment (CI/CD) form the foundation of effective DevOps. Companies must automate testing and deployment to eliminate manual interventions and late-night releases.
Environment consistency also matters tremendously. When development and production environments differ, deployments become unpredictable and risky.
Security integration requires careful planning, too. Growing companies need to add security checks to their development process. They should do this without delaying their release cycle.
Measuring Success Beyond Basic Metrics
Test coverage provides a crucial indicator of code quality. Higher automated test coverage allows teams to deploy with confidence.
Customer-reported issues tell an important story. As DevOps practices improve, these reports should decrease steadily.
Team satisfaction reflects operational health. Regular surveys help track whether DevOps reduces burnout and improves morale.
A successful DevOps transformation starts with selecting a DevOps champion. This leader keeps CI/CD processes running smoothly. They manage environments and help other teams follow best practices.
Cross-training strengthens the entire organization. Regular knowledge-sharing sessions help developers understand operations, while operations teams learn development practices.
Shared responsibility creates lasting change. Teams should celebrate reliability milestones just like they celebrate new feature launches.
Process Implementation Drives Quality
Code reviews set the foundation for quality. Every code change needs automated checks and peer review. This helps spread knowledge and catch issues early.
Daily code integration prevents major conflicts. When developers commit their work frequently, the team catches and resolves problems quickly.
Clear incident management procedures protect production systems. Clear processes for solving problems, like on-call schedules and runbooks, help keep systems running smoothly.
Version control forms the core of any DevOps setup. Many teams use GitHub or GitLab. However, they often miss out on the automation features these platforms provide.
CI servers automate repetitive tasks. Tools like Jenkins and GitHub Actions help with testing and deployment. This lets developers focus more on writing code.
Container technologies provide consistency. Docker ensures applications run consistently in all environments.
Automated security scanning catches vulnerabilities early. Tools like SonarQube and Snyk check code and dependencies before deployment.
Configuration scanning prevents misconfigurations. Security tools for infrastructure code help teams avoid common security mistakes.
Regular security training keeps teams sharp. Developers need ongoing education about secure coding practices and common vulnerabilities.
Creating Lasting Change
Continuous learning drives improvement. Teams should set aside time for training and trying out new tools. This helps them gain expertise and improve their skills.
Quick wins build momentum. Begin with easy automations that save time. For example, cut a four-hour manual deployment down to just 30 minutes with automation.
Regular feedback ensures constant progress. Track system performance and collect team feedback. Use this to improve processes and show stakeholders the value of DevOps.
An IT roadmap is a strategic framework that turns technology investments into business value. This method goes beyond regular IT planning for private equity-backed companies and other top firms. It links tech initiatives directly to value creation and sustainable growth.
This tool helps leadership teams evaluate, prioritize and implement IT projects. These projects aim to boost operational efficiency, improve scalability, and manage risks.
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A practical IT roadmap shapes a portfolio company’s growth path. It blends strategic planning with tactical execution. This means setting clear goals, finding initiatives, and planning when to do them.
This method ensures that every technology investment supports specific business goals. It fosters sustainable growth and competitive advantages in the market.
Private equity firms face high stakes in technology planning. Their portfolio companies need to show stability and accelerated growth potential. An effective IT roadmap sets apart companies that maintain tech standards from those that encourage innovation.
By prioritizing technology effectively, PE firms can help portfolio companies avoid common pitfalls. These include underutilized resources, system fragmentation, and security vulnerabilities.
IT roadmaps also aid in mergers and acquisitions (M&A). They provide a structured framework for integrating technology. During M&As, this document helps tech teams work together. It sets clear standards and shows how to integrate systems.
For example, when a PE-backed company acquires another, its IT roadmap guides integrating different systems. This minimizes disruptions and maximizes potential synergies.
Beyond operational effects, a well-crafted IT roadmap is a strong communication tool. It aligns various stakeholders, including executives, tech teams, and investment partners.
In PE-backed portfolios, an IT roadmap is a vital asset. It helps with quick tech choices and sets the stage for lasting value. This supports both portfolio goals and private equity aims.
Common IT Challenges: Distributed Teams, Legacy Infrastructure, Process Integration
Distributed workforce models have changed IT needs. Tech departments now manage various collaboration tools and cloud services for smooth communication.
Legacy infrastructure poses another challenge, especially for PE-backed companies. These inherited systems, while functional, often create bottlenecks and need complex manual fixes. Updating old infrastructure needs smart planning in the IT roadmap. This helps balance urgent needs with future improvements.
Process integration gaps are a major concern when tech strategies lack cohesion. When essential systems operate in isolation, it creates data silos. For example, disconnected CRM and marketing platforms can hurt operational effectiveness. Identifying and bridging these gaps is key to building a comprehensive IT roadmap.
Cybersecurity also adds complexity to roadmap development. Organizations must adopt strong security frameworks as cyber threats grow more advanced. These frameworks should do more than rely on tech solutions. This means integrating advanced security technologies with strong protocols to protect sensitive information.
Technological acceleration is another strategic factor. Enterprise tech is fast-paced, and IT departments must constantly improve their skills and knowledge. The speed of change in enterprise tech is high. While this is resource-intensive, staying current is vital for maintaining competitive advantages.
Financial factors heavily influence IT roadmap execution. PE-backed organizations must wisely allocate their tech budgets. They must secure enough funding for key initiatives and control costs. This requires careful prioritization based on potential impact and feasibility.
Creating an effective IT roadmap starts with a thorough evaluation of infrastructure. This involves looking at on-premise systems and cloud services. It includes network architecture and hardware. Tech leaders should talk to department heads and users. This helps find performance issues and operational problems. This assessment forms the basis for strategic resource allocation and improvements.
2. Strategic Initiative Prioritization
After the infrastructure assessment, organizations should set clear priorities. They need to focus on business impact and complexity. Cybersecurity enhancements and cost optimization usually come first. Software license audits can find ways to save money. This can free up cash for critical investments. This prioritization must align with organizational timelines, balancing immediate needs with long-term goals.
3. Establishing Strategic Timeframes
To implement an IT roadmap successfully, organizations need clear timelines. These timelines should divide objectives into phases.
Short-term goals last zero to six months. They focus on stabilizing key systems and addressing security issues.
Long-term goals span one to three years. They involve transformative projects, like enterprise resource planning.
Each objective must have specific, measurable outcomes. Monitor these outcomes using key performance indicators. For example, track resolution times for security incidents.
4. Stakeholder Engagement and Alignment
Engaging stakeholders is crucial for a successful IT roadmap. Tech leaders must share the roadmap’s vision with executives and decision-makers. They should explain how tech initiatives connect to business outcomes. This is more than just presentations. Leaders should share stories highlighting how each initiative improves operations and fuels growth.
5. Building for Scale
Scalability should influence every aspect of IT roadmap development. Organizations must select technology solutions that support future growth. Cloud platforms with flexible resources help businesses grow faster. They avoid technical limits that can hold back expansion.
6. Continuous Evaluation and Refinement
An IT roadmap is a living document that needs regular review and updates. Quarterly assessments help organizations track progress. They can adjust to new tech and changing market conditions. This ongoing review ensures the roadmap stays aligned with changing business needs.
Ensuring Long-term Success Through Strategic Implementation
Securing executive support is vital for the success of the IT roadmap. Tech leaders need to share clear plans. These plans should show how tech projects support business goals. They should highlight measurable benefits and return on investment. This will help build strong cases for allocating resources.
Scalability should guide every tech decision in the roadmap. Organizations should focus on solutions that can grow with their business. Cloud infrastructure and scalable systems help companies grow with user demand and market shifts. They do this without needing major redesigns.
Regular assessment cycles keep the roadmap effective. Quarterly reviews provide opportunities to evaluate progress, gather feedback, and adjust priorities. These reviews matter a lot, especially after big changes. Mergers and market expansions can shift things. So, we need to keep the roadmap useful.
This full method to create an IT roadmap helps organizations grow and succeed with technology. To succeed in a tech-driven market, companies need executive alignment. They should also focus on scalable solutions. Regular review processes are important too.
The Business Builders’ Network is full of pre-vetted resources ready to help your company with its IT roadmap.
Our research and operations team already knows who you need before you contact us, and is prepared to connect you with a short list of industry-specific options.
Partnering with BluWave can give you more confidence in your strategy and help you get started within a single business day. Set up your scoping call today, and we’ll provide a short list of situation-specific resources to help your business.
Understanding the intricacies of interim CEO salary can significantly impact the success of your organization, especially if you’re considering temporary leadership to navigate transitional phases or unexpected vacancies.
These seasoned executives offer specialized expertise and a fresh perspective, making them a valuable asset in steering companies toward growth and stability. Determining what constitutes a fair compensation package is essential to attracting the right talent.
This post delves into the factors influencing interim CEO compensation and why BluWave stands out as a premier resource for securing top-tier interim leadership.
Understanding the Role, Importance of an Interim CEO
An interim CEO is a highly experienced executive temporarily brought in to guide an organization through pivotal moments, such as transition periods, crises or strategic realignment.
Unlike permanent CEOs, interim CEOs must quickly adapt and leverage their extensive industry knowledge to deliver immediate, impactful results. Their primary responsibilities often include stabilizing operations, implementing crucial strategic changes, and preparing the company for its next permanent leader.
Their value lies in their ability to make swift, informed decisions that can pivot the company’s direction and enhance its overall value. Their influence can be transformative, often resulting in improved operational efficiency, financial performance, and strategic clarity. Given their critical role, competitive compensation is essential to attract individuals capable of driving such significant organizational shifts.
Several critical elements contribute to determining an interim CEO’s salary, each playing a significant role in shaping the overall compensation package. Firstly, the industry in which the company operates is pivotal. Sectors undergoing rapid change or facing significant disruption often offer higher pay to attract leaders capable of navigating these complexities. Secondly, the size and scale of the organization are crucial considerations; larger companies with intricate operational needs typically require more seasoned executives, driving up compensation.
Geographical location also impacts interim CEO salaries. The cost of living and regional market conditions can lead to significant variations in pay. Moreover, the specific challenges the interim CEO is expected to address are paramount. Complex, high-stakes situations demand a higher level of expertise and, consequently, higher compensation. The duration of the interim engagement and the nature of the expected deliverables further influence the salary. Long-term assignments or those with aggressive targets may warrant more substantial pay.
Additionally, interim CEO agreements often include performance-based components, such as bonuses and equity options, which align the CEO’s interests with the company’s strategic objectives. These variable elements ensure that compensation packages are tailored to both the needs of the organization and the expertise of the interim CEO.
Interim CEO compensation packages are meticulously designed to reflect the strategic importance of the role. Typically, these packages consist of a base salary, performance-based bonuses, and sometimes equity options. Industry benchmarks indicate that interim CEO salaries range from $250,000 to $800,000 annually, influenced by the industry, company size, and the specific challenges at hand.
Performance bonuses play a crucial role in these packages, serving to align the interim CEO’s objectives with the organization’s strategic goals. These bonuses incentivize the CEO to meet or exceed set targets, ensuring that their efforts directly contribute to the company’s success. In some cases, equity options are included, offering long-term incentives that tie the CEO’s financial rewards to the company’s performance and growth.
The duration of the engagement also affects compensation, with longer or more complex assignments often commanding higher pay. Each element of the compensation package is crafted to attract and retain top-tier talent, ensuring that the interim CEO is motivated to deliver significant, measurable improvements during their tenure.
Evaluating the value of an interim CEO requires a nuanced approach that goes beyond just their compensation package. The true measure of their worth lies in the tangible and strategic improvements they bring to your organization. Start by setting clear objectives and Key Performance Indicators (KPIs) that align with your company’s immediate and long-term goals. These benchmarks will help you quantify the impact of their leadership.
Consider the interim CEO’s ability to stabilize operations and implement necessary strategic changes swiftly. Their expertise should lead to measurable enhancements in operational efficiency and financial performance. Look at their track record in similar roles and industries to gauge their potential effectiveness in your specific context.
Additionally, an interim CEO’s value can be seen in their capacity to mentor and elevate your existing leadership team. Their role often involves preparing the organization for a smooth transition to permanent leadership, which can include improving organizational culture and driving engagement at all levels.
Lastly, assess their ability to navigate complex, high-stakes situations and deliver on aggressive targets. Performance-based components of their compensation, such as bonuses and equity options, can serve as indicators of their potential to meet these challenges. By focusing on these critical areas, you can ensure that your interim CEO delivers lasting, positive change.
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Selecting the right interim CEO is a critical decision that can profoundly impact your organization’s trajectory. At BluWave, we understand the urgency and precision required in this process.
Our extensive network of interim CEOs is meticulously vetted, ensuring each candidate possesses the expertise and leadership qualities necessary to navigate complex business landscapes. Utilizing our proprietary matching technology, we connect you with executives whose skills align perfectly with your needs and challenges.
BluWave’s streamlined approach saves you valuable time and resources, eliminating the uncertainties of traditional hiring methods. We offer not just candidates, but solutions — seasoned professionals who can drive immediate, measurable improvements. Our commitment to excellence ensures that you are paired with a leader who is capable of delivering strategic clarity and operational stability.
Trust the BluWave team to provide the interim CEO who will steer your company through transitional phases with confidence and expertise, ensuring a seamless path to sustained success.
Is your startup looking to take your financial strategy to the next level?
Hiring an interim CFO could be the key to unlocking your company’s full potential. Agility and strategic financial planning are crucial for startups. An interim CFO offers the necessary insight and leadership to address financial challenges, ensuring your company progresses.
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The Crucial Role of an Interim CFO in Startup Growth
Startups can falter without experienced financial guidance. An interim CFO, however, can guide it through these challenges with precision.
Through financial analysis, precise forecasts and strong cash management, they build a foundation for growth. Their expertise helps minimize financial risk by focusing on profit and scale at budding tech and SaaS companies.
Although temporary, their impact is significant. They provide vital financial leadership in the initial, unpredictable business phase. Interim CFOs craft key financial strategies, protecting and preparing startups for future success, proving their essential role in startup development.
BluWave connects startups with top-tier interim CFO talent, ensuring your company benefits from seasoned financial expertise when needed. Their tailored matching process guarantees you find the perfect fit to navigate financial complexities and drive your startup toward sustainable growth.
Overcoming Trust Issues with Reputable Interim CFO Firms
Evaluating interim CFO services often presents a dilemma of trust for many startups. The landscape is cluttered with numerous firms, each touting superior services, inevitably raising concerns about credibility and reliability.
Distinguishing genuinely reputable interim CFO firms from the rest is critical to ensuring that your startup partners with a firm that delivers on its promises. A key strategy in overcoming these trust issues involves conducting thorough research, seeking out firms with a solid track record and paying close attention to testimonials and case studies from previous clients.
By prioritizing resources that demonstrate a commitment to transparency and excellence, startups can forge partnerships with interim CFO providers that meet and exceed their expectations, setting a foundation of trust that paves the way for successful financial leadership and guidance.
Searching for a reliable interim CFO means more than checking qualifications; it involves evaluating their potential to achieve critical financial goals and quickly adapt to startup challenges.
Partnering with a top interim CFO firm simplifies the selection process, offering startups access to experts known for their dependability, deep experience and a history of success in fluctuating markets. These firms use strict selection processes, focusing on technical skills and a candidate’s ability to lead strategic financial actions effectively.
This thorough screening guarantees that interim CFOs can handle startup financial issues while striving for excellence, thus ensuring trust in their ability to advance the company.
It is key to recognize the critical role of an interim CFO for growing startups. These professionals handle more than just finances and cash flow; they identify growth and risk areas, driving strategic financial decisions.
Interim CFOs assist in navigating fundraising, managing capital, and developing revenue strategies effectively. They tailor financial frameworks and offer insights that enable startups to progress confidently through initial growth stages.
Their expertise in expanding businesses helps outline short-term financial solutions and strategies for long-term success, aligning with the startup’s goals. An interim CFO is pivotal beyond mere finance, enabling smarter decisions for continuous growth and profitability.
Finding an interim CFO for your startup doesn’t have to be a long, complex process. Whether you’re in New York, San Francisco, Seattle or another hot tech hub, there are great candidates ready to join your team.
Services exist that streamline the search by providing a selected group of interim CFOs who are thoroughly vetted for their financial expertise and fit with startup environments.
At BluWave, we already know who you need before contacting us, so we don’t “find” candidates. We connect you with the best ones within 24 hours of contacting us.
This tailored process eliminates the need for endless resume reviews and interviews, speeding up the hiring process.
Using a service that specializes in connecting startups with experienced interim CFOs guarantees smooth financial management integration, freeing you to concentrate on essential business operations with confidence in your financial direction.
Strengthen your startup’s finances through collaboration tailored to your objectives. BluWave specializes in connecting startups with interim CFOs adept in shaping financial strategies.
We match you with professionals who offer the right mix of skills and flexibility designed for your startup. Avoid the usual long searches and unpredictable results that come with relying on web searches and word of mouth.
Let BluWave guide you in this vital decision. Contact us to learn how a precisely chosen interim CFO can elevate your startup.
Private equity firms that need to find the right interim chief financial officer for their portfolio companies face a difficult task. The stakes are high, time is short, and experienced financial leadership is crucial.
This is where interim CFO consulting services come into play, providing a reliable solution for PE firms looking to fill finance leader vacancies quickly and effectively.
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Whether you’re in the business services, consumer products or any other industry, BluWave is here to match you with the right personnel.
Top Challenges Private Equity Firms Face with Interim CFO Recruitment
Recruiting a temporary chief financial officer is fraught with challenges for private equity firms. Whether your portfolio company is in a major metro like Chicago, Dallas or Miami, or a smaller market like Charlotte or Minneapolis, it’s a difficult process.
First, they want to be sure the interim CFO firm with which they partner is trustworthy. Many interim CFO consultants don’t understand how valuable this role can be for a portfolio company.
Negative past experiences or industry anecdotes where the interim role did not meet expectations or wasn’t a good fit can add to the hesitancy to engage in what appears to be a risky investment of time and resources.
Additionally, interim CFO recruitment must be fast by nature. PE firms want to identify and onboard candidates with the right expertise and experience while also aligning with a portfolio company’s specific needs and culture. This process can leave you feeling stuck and uncertain, stalling critical financial decisions and strategies essential for steering a company toward its growth objectives.
These intricate challenges underscore the pressing need for an interim CFO staffing partner that transcends traditional recruitment methods, providing a sense of reassurance and confidence in the solution.
How Interim CFO Consulting Services Address These Challenges
Interim CFO consulting services are invaluable for private equity firms tackling this complex task.
When done right, these services adeptly respond to the pressing challenges of establishing trust, ensuring reliability, dispelling skepticism and accelerating the hiring process. At their core, interim CFO consulting firms act as conduits, connecting private equity firms with a curated network of seasoned financial executives. This connection reduces time and uncertainty, quickly matching expertise with need.
The true value of these services lies in their ability to swiftly access interim CFOs who are not just placeholders but strategic thinkers and problem solvers. These professionals bring a wealth of experience, having successfully navigated similar financial complexities across various industries.
They skillfully guide portfolio companies during uncertain times, making financial leadership a stabilizing force and growth driver. This aligns a portfolio company’s needs with an interim CFO’s skills.
Partnering with BluWave, the Business Builders’ Network founded by a former private equity firm partner, gives you many advantages. PE firms gain the agility to respond to immediate financial leadership needs while ensuring that the chosen interim CFO can seamlessly integrate into the company’s culture and operational ethos.
That’s because we have already pre-vetted our network of hundreds of temporary to know precisely who you need before you even contact us.
“The PE firms that we work with have high expectations, and they really should, right? Because they have a lot of investments to take care of,” says Jake Adcock, BluWave Service Provider Coverage Manager. “When they need a resource, they need it right now. So that’s a huge benefit is that we can provide them a resource in the snap of a finger.”
More than just filling a vacancy, the strategic alignment facilitated by an interim CFO can transform their role into a source of enduring value and strategic insight for the portfolio company.
Strategic Advantages of Leveraging Interim CFO Firms
Embracing interim CFO consulting offers benefits beyond mere financial oversight. These benefits manifest as improved financial management and strategic insight brought by interim CFOs. Leveraging their deep experience and sector knowledge, they expertly assess financial well-being, focusing on balance sheet health and cash management to optimize resource allocation for enhanced growth and stability.
Moreover, the value of interim CFO consulting is amplified through the enhancement of financial reporting systems and the establishment of robust financial controls. These improvements are not just procedural but transformative, enabling companies to navigate through the complexities of financial compliance and strategic decision-making with greater clarity and confidence, all while the search for a permanent CFO carries on.
The interim CFO streamlines stakeholder communication by clearly articulating financial strategies and data, crucial for sustaining investor trust and promoting transparency and accountability.
“I work with private equity firms to help them onboard new portfolio companies,” says Caleb Morrison*, a trusted interim chief financial officer who BluWave has placed multiple times. “I see the gap when a company is bought, and you’ve got a bunch of investors on the private equity side, and you have a management team, and the two groups sometimes struggle to talk to each other and clearly communicate what the new life of being owned by private equity looks like, and that’s where I come in and help facilitate a lot of that.”
The strategic foresight interim CFOs bring to the table cannot be overstated. Their insights into financial planning and analysis and their ability to manage and negotiate vendor relationships place them in a unique position to identify cost-reduction opportunities and streamline operations.
This strategic lens optimizes current financial performance and lays a resilient foundation for future growth, making interim CFO consulting an indispensable tool for companies aiming to thrive in today’s dynamic business environment.
Selecting the Right Interim CFO Consulting Partner
Selecting an interim CFO consulting firm is critical, requiring a prudent selection process by private equity firms.
The ideal staffing firm is not just a repository of candidates but a deep well of industry-specific knowledge and insights. Such a firm doesn’t merely make connections; it engineers matches that resonate with each portfolio company’s unique vibrancy and challenges.
To navigate the complexity of financial leadership transitions, the chosen partner must be able to swiftly align top-tier interim CFO talent with clients’ nuanced demands.
The right consulting partner is not just a support but a catalyst that propels portfolio companies beyond mere survival, positioning them to excel in the competitive landscape.
The Business Builders’ Network is full of pre-vetted interim finance executives who are ready to help your portfolio company.
Our research and operations team already knows who you need before you contact us, and is prepared to connect you with a short list of industry-specific options.
Partnering with BluWave can not only give you more confidence in your selection, but we can help you get started within a single business day. Set up your scoping call today, and we’ll provide a short list of situation-specific candidates who can help your business.
*Privacy is important to us. While the source and company name have been changed, these are real quotations from a real service provider in the BluWave Business Builders’ Network.
When a company loses its full-time CFO – or is about to – keeping its financial strategy moving forward without interruptions is key. This is where interim CFO services come into play.
Whether you’re a PE firm, startup, public company, or an independent entity, the expertise of an experienced interim CFO can be a game-changer. This post explores what temporary CFO services entail, what they include, and why they are essential for your organization.
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Temporary CFO services are interim financial leadership solutions provided by seasoned finance professionals. These experts step in during transition periods, such as mergers, acquisitions, or restructuring, to stabilize the financial operations and provide strategic direction. They are not just temporary placeholders; they bring a wealth of experience and a fresh perspective to industries like healthcare, construction and engineering and more.
Interim CFOs are tasked with understanding the intricacies of your financial statements.
“The very first thing they’re going to have to do is get their head around the balance sheet and the P&L and the cash flow statement, says Caleb Morrison*, a trusted interim CFO from BluWave’s network. “This foundational understanding allows them to make informed decisions and guide the company effectively.”
Morrison adds: “It’s just educating the team on all the things that need to be done differently to satisfy the new owners and establish a good relationship with them.”
This helps ensure a smooth transition and sets the stage for successful collaboration with new stakeholders.
Interim CFO services are comprehensive, covering a wide range of financial activities. When it comes to interim CFO services, businesses benefit from a seasoned CFO stepping into a leadership role to address accounting and financial management concerns. From setting up financial controls to preparing for audits, these professionals handle critical tasks that keep your finance department running smoothly. The interim CFO role provides the necessary financial expertise to steer the organization in the right direction whether a company needs help with financial management or support navigating a financial challenge.
Key Tasks Performed
1. Balance Sheet Analysis
Interim CFOs start by analyzing and interpreting the balance sheet to understand the company’s financial health.
2. P&L Review
Reviewing and understanding the profit and loss statement is crucial for identifying areas of improvement.
3. Cash Flow Management
Managing cash flow and preparing accurate cash flow forecasts ensure that the company can meet its financial obligations.
4. Financial Reporting Systems
Setting up and improving financial reporting systems helps in generating timely and accurate financial reports.
5. Stakeholder Communication
Facilitating communication between the company and new owners or investors is essential for building trust and ensuring transparency.
6. Financial Controls
Establishing robust financial controls and processes minimizes the risk of fraud and errors.
7. Leadership and Team Management
Leading the finance team and ensuring daily financial operations run smoothly is a key responsibility.
8. Financial Planning and Analysis
Conducting financial planning and analysis supports strategic decision-making and long-term planning.
When choosing the best interim CFO services, consider your organization’s specific needs. Different interim CFOs bring different skill sets, so finding the right match is crucial.
The best temporary CFO services consider the following:
Industry
Company size
Existing finance team experience
Why/how did the vacancy come about?
Timeline to hire
Projected length of assignment
Specific financial challenges or goals
Cultural fit with the existing team
Candidate availability and flexibility
References
Past performance in similar roles
Cost structure and overall budget considerations
Communication style and approach to stakeholder engagement
With so many variables that affect your decision to hire the top interim CFO available, starting your search can feel overwhelming.
At BluWave, we have already pre-vetted hundreds of interim CFO candidates based on these specific factors. That means that when you get in touch with us, we can provide a short list of best-fit candidates for your situation within 24 hours.
“We’ve definitely had a need come in on Tuesday or Wednesday, and they’re in the seat on Monday,” says Jake Adcock, BluWave Service Provider Coverage Manager. “That’s fast. But we’re moving at the pace that the clients can.”
Interim CFO services are invaluable for organizations that are without a full-time, permanent CFO. From stabilizing financial operations to providing strategic insights, temporary chief financial officers ensure business continuity and growth.
If you’re facing a transition period and need expert financial leadership, consider partnering with BluWave to engage an interim CFO. Their expertise can make a significant difference in achieving your business goals.
Ready to take the next step? Contact us to start your project and discover how our interim CFO services can benefit your organization.
*Privacy is important to us. While the source and company name have been changed, these are real quotations from a real service provider in the BluWave Business Builders’ Network.
Interim CEO services are highly coveted in transitionary economies, such as those experienced during the 2008 housing crisis, the COVID-19 recession and the 2023 bank failures. In times like these, successful CEOs with strong leadership skills, strategic thinking, and effectivecommunication skills are essential to steer companies through challenging transitions.
What works for a chief executive officer under normal circumstances doesn’t cut it when times are especially tough. That’s why private equity firms, their portcos, and private and public companies often seek a interim CEO services to help them overcome challenging situations and not only survive but become even stronger than they went in. These professionals possess important skills such as adaptability, strategic direction, and interpersonal skills that enable them to assess crises and determine the right course of action quickly.
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“Interim CEOs have had the ability and experience to quickly assess a crisis and determine a course of action quickly,” says Jake Adcock, BluWave’s Service Provider Coverage Manager. “They have been in several turnaround scenarios and understand the importance of speed and definitive action, while long-term CEOs have often grown up in a company and are less likely to assess and act as quickly.”
An interim CEO, also known as a temporary chief executive officer, is a highly experienced and skilled professional who temporarily assumes a leadership position, typically during times of crisis or transition within an organization. They are responsible for providing strategic guidance and making important decisions to help steer the company through a transition period or a turnaround situation. These leaders are brought in on an interim basis, typically with a well-defined interim CEO contract, to provide stability and make strategic decisions when needed. The interim CEO role also involves close collaboration with the executive team to ensure continuity and effective strategy execution.
“The role is to turn strategy into execution. I have a playbook I use because,” says Caleb Morrison, an experienced executive from our interim network. “It’s a structure and a governance process.”
Interim CEO Job Description
One of the primary skills required of an interim leader or acting CEO is change management. The role of an interim CEO requires someone who’s intelligent, experienced, a quick learner, a reader of people, and who’s prepared to turn around what might be a disastrous situation. Responsibilities include:
Provide senior-level guidance during unexpected vacancies
Drive significant change during disruptive circumstances
Manage corporate restructuring, crises and severe cost reductions
Implement transformation strategies and oversee digital transformation initiatives
Turn strategic plans into actionable execution
Lead the company through short window exits and performance drop-offs
Quickly assimilate information and make decisions from day one
Address profitability challenges and operational excellence
Nearly every chief executive officer must have some important skills as the leader of an entire organization. Temporary CEOs are no exception; they often need to bring unique services and talents to the table that a long-term leader may not have.
As Adcock mentioned, most CEOs are not used to dealing with disruptive circumstances.
When a company is in financial distress, it needs to change its business model. Michael Pooles*, an interim CEO from the BluWave-grade network, says many companies are not accustomed to doing that.
“They’re used to keeping the dial between nine and 11. But when times are disruptive, where companies come under stress, you need a different kind of leader. Most CEOs don’t have that skill set to drive significant change,” Pooles says. “That’s why you bring in an interim who does.”
Knowing how to deal with supply chain and other commercial-related problems is especially important for a temporary chief executive in challenging economies.
Quickly Assimilate Information
The sooner new leaders can grasp the data available to them, the more quickly they can affect change. Making decisions from day one is paramount in a role that typically lasts less than a year.
“Successful interim CEOs come in with a trust-but-verify mindset. An inquisitiveness,” Morrison says. “If you walk into a CEO chair, you’re not going to get a pass on a lack of knowledge.”
If a portfolio company recently broke covenants with a bank, or if a private- or publicly owned company is going through a crisis, it doesn’t have months or even weeks to “figure things out.”
They need someone with extensive experience who understands their industry, has a deep knowledge of how to confront the organization’s specific challenges, and needs to be able to address them quickly.
The company could have found a long-term replacement if time weren’t of the essence. The CEO role, however, cannot be left open for any significant amount of time. That’s why interim CEOs are expected to act fast and with an assuredness that inspires the rest of the team to follow their turnaround plan. An effective interim CEO ensures that when they leave the company, it’s already in a better state for the incoming permanent CEO.
If a portfolio company, private company, or public company needs an interim chief executive, it’s more often than not because things weren’t going well with the previous leader.
The last thing the organization needs is someone to come in, point fingers and make excuses.
An interim CEO should be mentally prepared to walk into a messy situation and do everything possible to clean it up. If things don’t work out at the end of the engagement, there’s only one person to blame.
“The buck stops with you,” Morrison says.
Evaluate Talent
“You need to be able to lead a varied group of people. Every situation you walk into, you don’t know what you’re getting into in terms of the talent,” Morrison says. “Being able to read people and understand what motivates them and change your approach accordingly is very important.”
What worked at one company, however, may not work at another. Interim leaders who take a cookie-cutter approach are unlikely to be successful.
“I don’t believe in a one size fits all,” he adds. “It’s very rare that every company is going to have the same culture.”
Interim CEOs must possess these abilities to lead a company through periods of uncertainty and provide the necessary stability. For more information, explore our CEO consulting and advisory services.
Problems Interim CEOs Solve
Within the context of these skills, an interim CEO might be asked to solve many specific problems.
Here are just a few of the more common issues we hear about when private equity firms and public and private companies contact us for a temporary executive leader:
Underperforming Business
PE firms want to accelerate their portco’s growth during their hold period. When things aren’t going as well as planned, they sometimes seek a change in leadership to turn things around.
An interim CEO can be the perfect solution to solve the more specific issues that follow.
Leaking Cash
“Leaking cash” means more money is going out than coming in. This could be due to lack of revenue from its products and services, and/or because too much is being spent on things like marketing, salaries and overhead.
At a high level, this can be resolved by reducing costs and increasing revenue. But it’s not as simple as it sounds.
That’s why an interim chief executive officer can be an invaluable resource in this situation.
Leaking Inventory
A leaky supply chain can also be a major downfall for a company. This can happen during packing, shipping as well as in-store handling, depending on the nature of the business.
An experienced temporary executive will know how to root out and address the cause of the shrinkage problem.
Margin Compression
“Margin compression is when input costs rise faster than the sale price of the product,” according to the University of Minnesota. “As a result, margins decline over time. Margin compression commonly occurs in most industries.”
This can happen due to increased competition or decreased demand – both of which drive down prices. It can also occur when the cost of parts and labor increases, thus lessening the organization’s margin on its product or service.
An interim CEO could address this in several ways, including reducing costs, increasing prices or improving operational efficiency.
Crisis or PR Disaster
These situations get a company in the news for all the wrong reasons: product recalls, employee misconduct, fraudulent or illegal activities, natural or environmental disasters and more.
The key is to restore trust and confidence in the company by communicating effectively with employees, customers, and the public. The right leader will also implement specific tactics to prevent similar disasters from reoccurring.
Finding interim executive talent who truly knows how to do the job well can be a time-consuming and expensive process.
When you tap into the invite-only, PE-grade network of exact-fit interim CEOs, you leave all the guesswork behind.
Adcock is in contact with the temporary chief executive officers we provide on a daily basis. That’s why we already know the leader you need before you even contact us.
Set up a scoping call with our research and operations team and we’ll provide a short list of perfect-match candidates for you to interview in less than a single business day.
With BluWave’s network of interim CEOs, you gain access to professionals who combine continuous learning, strong leadership skills, and diverse team management to guide your organization through any transition. Explore our interim executive search services for more details on how we can assist your business.
*Privacy is important to us. While the source and company name have been changed, these are real quotations from a real service provider in the BluWave Business Builders’ Network.
The chief financial officer is a crucial role. But not all businesses can afford – or are ready – for one.
One alternative to committing to a full-time (and expensive) C-suite financial executive is a fractional CFO.
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“The biggest role of a fractional CFO is going to be high-level overview. The business is typically not going to be big enough to really justify a full-time CFO,” BluWave Head of Finance Justin Scott says. “But you do need somebody to validate the financial statements and make sure that your cash flow’s in line. Things that the controller or even a super-controller may miss.”
Fractional CFO consulting is something we hope the world’s leading private equity firms and private and public companies with on a regular basis.
Let’s look at this part-time position in more detail, and explore whether temporary CFO services – full-time interims – make more sense.
A fractional CFO provides high-level financial oversight for businesses that might not be able to justify a full-time CFO.
“The biggest role of a fractional CFO is going to be a high-level overview. You just need that extra set of eyes,” Scott says. “It’s more of a validation role.”
The “fractional” part of the title indicates that the person in this role is working a “fraction” of what would normally be a full work week. In fact, it’s not unusual for someone to serve as a fractional CFO for three or more businesses simultaneously.
A fractional CFO is a great option to help secure funding, and then establish the ongoing reporting process and line of communication with the funding source. A fractional CFO service is also beneficial for a small business that requires a financial expert but may not have the resources for a full-time CFO. In many cases, companies turn to a part-time CFO or virtual CFO to address specific needs.
“If you use a fractional CFO because you want to establish a line of credit, that line of credit is going to have regular monthly reporting that has to be provided and you may not want your controller working on it,” Scott says.
While there are other use cases, these are among the more common ones.
Fractional CFO service coverage:
Long-term business strategy development
Key performance indicator tracking
Fundraising business plans and investor presentations
Financial modeling
Business valuation analysis
Merger and acquisition risk assessment
Transaction documentation for M&A deals
Predictive financial planning and budget comparison
Oversight of liquidity and cash resources
Managing financial institution partnerships
Data-driven business insights
Financial performance evaluation and planning
Preparation of financial reports and business presentations
Advisory for informed business decisions
Deal and contract negotiations
Communication and relationship management with investors
How Many Hours Does a Fractional CFO Work?
This will vary, but again, by definition the role is a fraction of full-time.
That could mean as little as 5 hours per month, or as much as 10-plus hours per week, which is why people in this role often support multiple businesses at once.
There are, of course, both positives and negatives to having someone work for such a limited amount of time.
The best fractional CFO companies will provide candidates with experience in your specific situation. That means industry, company size, geography and more.
BluWave’s network of professionals is pre-vetted with multiple references. That means before you contact us, we already have multiple candidates ready to meet you within 24 hours.
Instead of searching for “fractional cfo services near me,” you can save time and money by letting us connect you with a situation-specific candidate who meets your pricing and experience expectations. With the right fractional CFO, you can gain financial insight into your operations and resolve whatever complex financial challenges you’re facing.
Hire Fractional CFO: Benefits, Drawbacks
Here are the pros of hiring a fractional CFO:
Fractional CFO Pricing
How much do they cost? Well, a fractional CFO cost is more budget-friendly than bringing on a full-time executive.
Instead of paying a salary plus benefits, you can budget for a set amount of hours each week or month.
Fractional CFO Hourly Rate
Even someone who charges $250 per hour, for example, would only cost $2,500 in a 10-hour month – far below the cost of a full-time chief financial officer.
“I think the larger use case is they just don’t have a need for a full-time one,” Scott says. “They probably have a controller or a super-controller in place that gets them almost everything that they need, and they just want an extra set of eyes for peace of mind. The expense is definitely going to be your primary driver.”
Fractional CFO Contract: Flexibility
A fractional CFO is usually brought in as a specialist in one particular area of the finance function. In fact, CEOs could leverage multiple fractional CFOs at the same time, each focusing on different areas.
Since a part-time hire works so few hours per company, they typically have more flexibility, too.
For specific tasks in advanced functionalities, a fractional CFO’s on-demand expertise can be invaluable.
One person can be brought in, laser-focused on a project, and only cost the company the amount of time needed to complete it.
“Fractional CFOs do get a lot of exposure to a lot of different businesses, so those are typically the CFOs that are very industry agnostic because they can step into a lot of environments,” Scott says.
Mentoring and Coaching
Whether the person running a company’s finances full-time is an ambitious controller or a green CFO, bringing in a fractional CFO to cover their weaknesses can benefit both the company as well as the permanent hire.
The part-time CFO can not only ensure that the full-time person’s blind spots aren’t a liability, but they can train them along the way so that they’re able to do it on their own in the future.
Here are the cons of hiring a fractional CFO:
Limited Business Insight
Since a fractional CFO is not fully engaged, they might lack a deep understanding of the company’s needs.
“I use myself as the example here. There’s a lot of things that I catch or help plan for because I’m intimately involved in every step of the business,” Scott says. “If I didn’t understand the complexities of what BluWave does, it would be very easy to give a vanilla, out-of-the-box opinion on something and then it blows up in our face.”
Fractional CFO Time: Less Commitment
Fractional CFOs might not feel as invested in the team and organization they’re supporting if they’re only involved a few hours a week.
“There’s no long-term commitment,” Scott says.
This means that if things start to go south, they’re not going to feel the pain as much and therefore might not be as motivated as someone whose career is on the line.
Lack of Focus
As mentioned, fractional CFOs are likely to be working for multiple companies at the same time.
Depending on the urgency of projects from one situation to the next, the fractional CFO may not be as locked in on your company’s needs as they would be otherwise, despite their best efforts.
Risk of Losing Them
Some finance experts are content to keep their hands in multiple pots. Others, however, would be happy to jump to a full-time position if the right opportunity presented itself.
Instead of receiving notice about their departure weeks in advance, they may leave you high and dry for a business that’s willing to pay them more.
“That can almost be even bigger risk because fractional CFO by nature already has less understanding of your business, and now they also have less commitment,” Scott says.
Perhaps your business can’t justify a permanent CFO – or you’re going through a leadership transition or preparing for sale – but you still need the full-time commitment of a finance executive.
An interim chief financial officer, then, may be the perfect solution to strike that balance.
An interim CFO includes all the pros of a fractional CFO, but practically none of the cons.
That’s not to say that there aren’t also drawbacks of an interim vs. a permanent CFO, but they tend to be a much more impactful solution than someone who only engages with your business for a few hours per month.
An interim CFO is typically more engaged, provides a deeper understanding and is committed full-time. An interim CFO steps in to stabilize financial operations and address more immediate, hands-on challenges.
This deeper involvement brings with it process improvements, better cash flow management and strategic partnership benefits to CEOs, Scott says.
“The interim CFO is going to be more of a strategic partner.”
When To Hire an Interim CFO Instead
Scott says portfolio companies and private and public companies that are ready to add a full-time CFO for the first time are well-positioned to seek an interim.
“Now all of a sudden, this is their game. It’s their full-time focus, so they’re going to be digging through everything,” Scott says. “You’re going to get process improvements. You’re going to get better cash flow. You’re going to get all of the things that a full-time CFO brings to the table.”
2. Strategic Partnership
CEOs can expect more from an interim CFO than a fractional solution.
“They’re more engaged with business,” Scott says. “They have a deeper understanding of the business. They’re just going to get more out of the relationship.”
While the initial cost might be higher, the benefit an interim CFO brings in terms of expertise and commitment can significantly outweigh the expenses.
“The interim CFO is going to be more of a value-add,” Scott says.
Their billable hours can also be capped, and they typically don’t take benefits like health or 401ks.
Whether you seek a fractional, interim or full-time CFO, the Business Builders’ Network is loaded with private equity-grade options for all company types and industries.
The resources BluWave provides have been vetted by multiple PE firms before joining its invite-only network. It’s no surprise, then, that interim CFOs are consistently among the most requested connections we make.
When you’re ready to meet your next chief financial officer, our research and operations team will provide a short list of industry-specific candidates within a single business day. Set up a scoping call to get started today.
“It’s a big step to go from a fractional CFO to a full-time role,” Scott says, “but the benefits are undeniable.”
Identifying an interim chief financial officer can be tedious, if not expensive. Companies that don’t know what they’re looking for when they begin their search could spend large sums of money on headhunters and recruiting firms.
They can also lose valuable time interviewing unqualified candidates.
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When hiring an interim CFO instead of a permanent replacement, key considerations include timeline, need-specific criteria and keeping an eye out for red flags.
As a trusted resource for hundreds of private equity firms and thousands of portfolio and independent companies, BluWave has exclusive insight into what makes a home-run selection vs. someone who will send you back to the drawing board.
What is an Interim CFO?
An interim chief financial officer is a temporary, full-time executive a company hires when it’s without a full-time CFO. We’ll talk more later about the situations in which you would hire a temporary CFO.
To better “define interim CFO,” we asked BluWave’s Vice President of Finance and Accounting Justin Scott.
“I think the interim CFO role really depends because it’s really got to be scoped well going into it because you could have an interim for different reasons,” Scott says. “If you’re going to take the interim route, you want to make sure that you have an interim that has the specific skillset you need for the reason you need an interim.”
When it comes to interim management, finding the right interim CFO is important for your company’s financial operations to run smoothly during transition periods. Whether you’re a small business seeking immediate support or a growing company requiring specialized financial expertise, hiring an interim CFO while searching for a permanent candidate can provide many benefits.
“What we’ve heard is, you’re either finding a full-time person in less than 30 days in the first slate of candidates or it’s going to take five or six months,” BluWave managing director Houston Slatton says.
Identifying a candidate experienced with the right industry, company size and revenue models, for example, takes time.
“You may get lucky, but you’re probably not going to. And so you need to plan to not have a full-time person in that seat for five or six months,” Slatton adds. “You don’t want a B-minus player because they’re going to be a key member of the executive team.”
“You could have an interim CFO simply as a stopgap. You lost your prior CFO unplanned for whatever reason. And ‘I just I got to fill a role until I find my long-term solution,’ or I could have an interim CFO to prep for sale,” Scott says. “So it really depends on the scope of the interim CFO.”
Many businesses turn to interim CFO services and fractional CFO services to bring in experienced professionals on an interim basis. Here are some of the more common scenarios where interim CFOs are hired.
One benefit of a short-term hire is that you can test them in the role before committing full-time. This makes it easier to transition a strong candidate to full-time if they are a good fit. It also means giving someone an opportunity without immediately making a larger investment.
“It is very easy to interview very well and then the person who shows up is not who you interviewed,” Scott says. “That’s very critical in the CFO role because if you get a bad CFO or somebody that can talk the lingo but not deliver the activity, you can get yourself in a lot of trouble real fast.”
Interim-to-full-time transitions often happen after a company has been recently acquired. What began as a one- or two-quarter stint can easily transition to a permanent role if the person has integrated well, especially with the CEO.
Stopgap
Sometimes, companies need more time before choosing a permanent CFO. But they don’t want to leave such a crucial role vacant for months, either.
This is another opportunity to bring in someone with interim experience to bridge the gap between the prior CFO and your long-term solution. Hiring a part-time CFO, virtual CFO, or even an outsourced CFO helps companies navigate complex financial challenges while waiting for a full-time CFO position to be filled.
“Given the importance of the CFO role, it’s really hard to be without one unless you have an amazing controller,” Slatton says.
Some people make a career out of temporary assignments, putting them top-of-mind for recruiters in these situations. One such person in our network talked to us about the benefits of an interim CFO.
“I think the primary purpose is to just stabilize everything,” says the executive, who spent eight years in PE before focusing on temporary assignments. “But then also learn the nature of the operations and the backbone of the company, and how it operates and if changes need to be made.”
At BluWave, we have seen that the end of the year is a popular time to hire an interim CFO.
Historically, about 60 percent of the interim CFO projects we have sourced were in Q3 and Q4.
“The last thing a CEO wants to do is be approaching an end-of-fiscal-year and not have somebody that’s going to drive their financial close right for the year,” Scott says. “That could be a really scary place to be, where earlier in the year you’ve got time to bounce back.”
Post-Acquisition Value Creation
Interim CFOs also focus on making a company as valuable as possible once it’s been acquired. This is especially important if someone in a lower-level position, such as a controller or an accountant, previously led finances.
“One purpose of an interim CFO is to just stabilize everything,” says Hunter Eagan*, an interim CFO from BluWave’s invite-only network. “But then also learn the nature of the operations and the backbone of the company, and how it operates and figure out whether it’s going to meet the demands of the new private equity owners, or if changes need to be made so that the company can produce the information that the private equity owners are going to want to see.”
Slatton says companies often use large amounts of debt to finance their purchases, opening the door to new accounting situations.
“Now they need somebody to handle all the bank reporting and covenant testing for the lenders and putting in real GAAP,” Slatton says. “As soon as they have a loan like that, they suddenly have to do all this financial reporting. That will be a new process and it hits quickly after they close on the business.”
In addition to what Slatton shares, other key value-creation tasks may include:
A short-term finance executive can also be a great resource when a company is preparing to be sold. After holding a company for 3 to 5 years, PE firms typically look to sell it to a larger PE firm or public company.
Merger and acquisition experience is especially important in private equity; whether it be post-merger integration or prep for sale, M&A experience is key.
Here are some other ways interim CFOs can help companies prep for sale:
Performing legal and external reporting to regulators
Any company that needs a temporary finance leader or financial expert at the C-suite level can use an interim CFO.
Private equity firms often want to find temporary finance leaders before, during or after the sale of a portfolio company.
But, private and public companies can also benefit from strong finance and accounting leadership.
At BluWave, this is one of our most in-demand roles year-round as companies seek to professionalize their finance function, ease a transition, recover from a crisis and more.
When evaluating CFO candidates, use the same measuring stick for each one. BluWave founder and CEO Sean Mooney, who has more than 20 years of PE experience, developed the PE-grade CFO scorecard for this purpose when looking for full-time CFOs.
Many of the same principles can be applied to the interim CFO executive search process. Having a baseline allows everyone involved to make more objective evaluations.
“Assign different parts of your scorecard to relevant key team members so you can systematically measure candidates against each of your criteria while getting a range of inputs from across your organization,” Mooney explains on the Karma School of Business podcast.
Companies often contact someone like BluWave for help when sourcing candidates or interim executives. We then present them with two or three candidates tailored to their needs. One of those candidates typically emerges as the leading choice, at which point they’ll continue interviewing with other executives and, when applicable, the PE firm.
While you can put whatever criteria you like on your scorecard, we have a few recommendations for the interim leader process.
Experience at a larger company vs. a smaller one isn’t good or bad; it’s just different.
We often see, for example, executives who traditionally spend time at larger organizations struggle to move to smaller ones.
“CFOs that come out of those portfolio companies or come up through the ranks have a very different mindset than one that comes up through the Fortune 500 world,” Scott says. “It’s a little bit more of the rolling up the sleeves type thing, right? The PE-grade CFOs, that’s just expected because you have to be engaged in everything because instead of having 500 people on your finance and accounting team, you might only have two to five.”
Mooney recalls multiple past appointments that didn’t work out for that reason.
“I’ve had so many failures trying to bring in big-name large company CFOs who just couldn’t function at a lower-middle market size company,” he says. “It wasn’t that they weren’t great. It was that they just weren’t a good fit for a smaller-company environment.”
Relevant Industry Experience
This is an important factor for companies with unique or complex accounting needs or those within highly regulated industries.
A strong candidate should be able to articulate relevant industry experience in the interview process. Whether manufacturing, software, healthcare or another area, the interim CFO should be entering familiar territory from day one.
To evaluate this point, Scott says we ask candidates: “What did you do in that industry to make yourself stand out or to prove that you understand that industry and how it works?”
Capital Structures
Mooney says interactions with lenders and investors go more smoothly when someone has experience operating under similar capital structures.
“This is particularly true when we think about having done the balance sheet entering a public company operating environment,” he says.
While uncommon, there are times when the ideal interim CFO is already on your team.
“It’s going to be a more seamless transition with somebody that comes internally,” Slatton says. “If you have somebody really good that you like that’s internal, use them just because it’s going to be easier.”
More often, though, companies bring in someone new.
“Some of those higher-level kind of CFO skills, you’re not going to find on an internal team,” Slatton says. “Bringing in somebody from the outside allows you to have access to a broader set of skills and brings a fresh perspective.”
BluWave Interim Executive Practice Manager Ginessa Ross agrees, saying it can be easier for interim CFOs to put their emotions aside and get the job done.
“They can just pick out the issues and deal with it,” she says.
Interim CFO assignments, by nature, are temporary. Interim finance roles typically last around six months, though we have seen stints as short as three months and as long as a year or more. It all depends on the situation a particular business is facing.
“Oftentimes it’s until you find the permanent and that often takes three to six months,” Slatton says. “Recently, it’s been longer, just as it’s been harder to find talent across the board.”
As Slatton mentions, a full-time CFO is named at the end of the temporary CFO’s time. Oftentimes, there’s a transition process where the eventual full-time candidate works alongside the interim to ensure a smooth transition. In the same cases, the interim CFO is hired into the same position full-time.
Hire an Interim CFO Immediately
A well-vetted interim CFO search process typically takes up to 90 days from the initial call to their first day of work.
There are times, however, when you need a vacancy filled “yesterday.” At BluWave, we provide two or three best-fit candidates within a single business day. This can cut a process that normally takes months to a few days.
“Of the several hundred PE-grade CFOs in our network, we select the top two or three choices for a company, and once the negotiation is finalized, they can get to work very fast,” Scott says.
Every candidate in the BluWave network has been pre-vetted with multiple references. And before we recommend someone to a company, they are vetted again to provide the most up-to-date evaluation possible.
As we already mentioned, many candidates can talk the talk but not walk the walk.
Here are some signals that will help you discount the duds from the outset.
Salary Disparity
If someone is accustomed to making significantly more money than you can pay, you might want to skip them. While they may claim to be interested, they could use the interim opportunity as a stepping stone to a higher-paying role, leaving you looking for another finance executive sooner than expected.
“In my experience, rarely will the candidate take a meaningful discount and not start looking for the best next role sooner than later,” Mooney says. “You don’t want to be a bridge to somewhere else.”
Geography
Another important consideration is location. Or, in some cases, relocation.
While the pandemic accustomed companies to remote workforces, there’s value in having your financial leader on-site, even for a few days a week.
In high-stress situations like turnarounds, restructurings or building a finance team from scratch, interim CFOs need to earn trust as fast as possible. This is difficult to achieve when working remotely.
“Time and time again, we’ve seen projects get down to the finish line, and at the end of the day, they say, ‘Well, I’m not really ready,’ or ‘We’re not going to move our family,’” Mooney added.
If you’re considering someone who’s out-of-market, confirm early on that they’re willing to work from your office for most of the assignment if this is important to you.
While less of a concern for temporary assignments, beware of candidates who routinely spent only a year or two in full-time roles.
The exception would be someone like our interim CFO veteran, who spent years in full-time roles before shifting exclusively to short-term stints. Candidates like him understand how to make the most of a three- to six-month opportunity.
“I think it’s very valuable to have someone who knows all the things that need to get done,” Eagan says. “Getting everything set up, and then making sure that the management team and the private equity owners have a good open line of communication, and aren’t afraid of one another. I think an interim CFO is in the perfect spot to facilitate that communication.”
Employment Gaps
Mooney says it’s normal for candidates to have “bumps in the road.” No one’s career is a downhill ride on the yellow-brick road. Hiccups should be the exception, though, and not the rule.
“Be aware of large gaps in employment. Look for track records of being recruited to bigger and better next roles versus leaving roles without a bird in hand,” he says.
If a candidate consistently leaves full-time jobs without having the next one lined up, dig deeper into why that is, or discount them altogether.
Pointing Fingers
Talk to each man and woman you interview about difficult times in their careers.
If they’re quick to pass the blame, you can expect them to act likewise once hired. You want someone who takes responsibility, not assigns it.
“Look for candidates to own the results and ultimately share what they did to take action and improve the situation,” Mooney says. “Be aware of candidates who repeatedly blame circumstance and fate.”
Questionable References
BluWave runs multiple reference calls before presenting a candidate to a potential client. Ross says this is a great way to weed out unqualified options.
“It’s a value prop that we have for our clients,” she says. “We always ask for references, and if they’re unwilling to send them, we take that as a red flag and we are unwilling to work with them from there.”
Passive Work Habits
If a candidate doesn’t have a history of getting involved in the day-to-day details, they’re probably not going to accomplish much in a three- to six-month assignment.
“People aren’t looking for an interim executive to come in and bark orders. Anybody can do that,” Scott says. “They’re looking for somebody to come in and really get engaged, understand what’s going on in the business, figure out what’s not working in the finance and accounting department and get that aligned with the business needs as quickly as possible. And you can’t do that sitting back.”
That’s why a candidate needs to express past accomplishments with details.
Bad Cultural Fit
“Every CFO that we’re going to present is qualified,” Slatton says. “It’s more about, can they fit well with the organization and are they going to partner well with the PE firm?”
Ross agrees, saying there are many qualified finance executives for hire. The more important question, though, is how well they can adapt to a new situation.
“If they can’t earn respect and get people on board with the company mission, they’re not going to be able to move the company in a positive direction,” she says. “You can be the most experienced executive in the world. But ultimately, if you butt heads with the person you’re supposed to be working with, it’s not going to work out.”
Ross, who onboards interim CFOs to the BluWave network, says lesser-known candidates can embellish their background to land a prized opportunity.
That’s why, she says, we ask probing questions before recommending them to clients: “Who have you worked with? When have you worked with them? And how have you worked with them? I think those are very important.”
When candidates see interim opportunities as a chance to build their skillset, it’s a recipe for disaster.
“An interim CFO job probably isn’t the way to learn new types of business models because interim CFOs need to jump in and know what they’re doing,” Slatton says. “Don’t try to think of an interim opportunity as a stretch opportunity.”
Selecting the right interim executive can be difficult, but with the right evaluation process and support, you’re more likely to hire the best person much faster.
Mooney recommended in CFO Magazine eight ways to optimize the process.
Creating an interim CFO scorecard can be a great way to kick off your search process, but don’t hesitate to contact us for help.
“Don’t overly weigh your assessment on any one criteria,” Mooney adds. “When using a structured scorecard-based approach that includes a comprehensive assessment of a candidate’s competencies, skills, values, intellect, personality and real-life case-study testing, I think you’re going to find that your success rates are going to go way up.”
*Privacy is important to us. While the source and company name have been changed, these are real quotations from a real service provider in the BluWave Business Builders’ Network.
