From number two to CFO: Earning investor trust before and after appointment

INVESTOR LENS

What gives investors confidence in a step-up

COMMERCIAL JUDGEMENT

Explain what the numbers mean and how they should shape decisions.

LEADERSHIP AND GRAVITAS

Show that you can lead and communicate.

BOARD AND INVESTOR EXPOSURE

Present clearly and handle challenge.

VALUE-CREATION UNDERSTANDING

Connect KPIs, equity story and investment plan.

CEO PARTNERSHIP

Partner the CEO and challenge constructively. Turn finance insight into better decisions.

THE ASSESSMENT IS SITUATIONAL

Reduce the number of ‘firsts’ around them.

WHAT WE SEE IN

CFO hiring processes

40% OF FINATAL’S CFO PLACEMENTS

In the last 2 years were first-time CFO appointments.

WHAT INVESTORS TEST

Knowledge of the business model, finance breadth and fit.

COMMON GAPS

Leadership, gravitas and board exposure.

WHEN STEP-UPS WIN

First-time CFO appointments are most commonly made earlier in a PE hold period, when investors prioritise operational build and value creation.

WHY SEARCHES ARE WIDENING

Longer holds constrain experienced CFO supply.

Look for a role with fewer unfamiliar challenges

An investor considering a first-time CFO will assess how much else will be new. Familiarity with the business model, its underlying economics and its operating environment gives a candidate a stronger starting point. A finance leader in a SaaS business, for example, brings experience of metrics and reporting that will be directly relevant to another SaaS company.

Situational experience matters too. A business pursuing acquisitions needs different experience from one managing a turnaround or rapid international growth. Knowledge of the regulatory environment can also be valuable in sectors such as healthcare and financial services.

For candidates, this means being specific about the environments in which they can contribute quickly. Consider the business model, ownership structure, scale and investment plan together when assessing an opportunity.

Build breadth across the finance function

Many candidates arrive through a particular route, such as FP&A or financial control. The CFO remit brings responsibility for the wider function, including areas that may have sat outside their previous role.

The importance of each gap depends on the business. Treasury or tax experience may carry particular weight in a complex international organisation. Candidates should understand which capabilities are essential for the specific appointment and where specialist support could be available.

The practical advice was to seek exposure deliberately. Ask to take on a project in tax, treasury, M&A integration or another unfamiliar area. A departure within the team may create an opportunity to broaden responsibilities. Where a move is needed, consider whether the next role fills a meaningful gap before pursuing the CFO title.

Assess the size and timing of the opportunity

Moving from a number-two position in a larger organisation into the CFO role at a smaller business can provide a credible first step. Candidates should be ready to explain how they would operate with fewer resources and remain close to the detail.

The window for a first CFO appointment is often widest in the first half of a PE investment cycle. Early holds favour operators who can build teams, systems and reporting; later-stage businesses are more likely to seek CFOs with exit, refinancing or M&A credentials.

Hold periods have moved from 3–5 years to 5–7. Experienced CFOs stay longer, widening searches towards strong step-ups whose experience fits the next phase.

Address gaps openly and propose a way to close them

A demanding specification will usually contain areas where a first-time candidate has less experience. Trying to obscure those gaps risks undermining confidence during a detailed interview process.

Candidates should acknowledge gaps openly rather than trying to hide them, demonstrating self-awareness and showing how their existing experience, exposure and achievements reduce the associated risk. The strongest candidates then explain a credible plan to bridge any remaining gaps, giving investors confidence that they can succeed despite not having done every aspect of the role before.

Investors are more open to supporting management teams and step-up hires as experienced CFO availability tightens.

The opportunity is to make a clear case for your strengths, alongside a credible development plan. Discuss support as part of how the appointment will succeed.

Build a support network before you need it

Many successful first-time CFOs benefit from having an experienced CFO mentor they can call on during the transition. The role can be isolating at times and the biggest challenges are often situations you have not encountered before.

A mentor cannot replace experience, but they can help accelerate it. Whether navigating a difficult board conversation, preparing for a refinancing, managing a challenging CEO relationship or leading through underperformance, access to someone who has been through similar situations can provide valuable perspective.

The strongest candidates often begin building these relationships before securing their first CFO role. Investors generally view this positively because it demonstrates self-awareness and a commitment to continuous development.

Having trusted advisors around you can reduce risk, increase confidence and provide an important sounding board during the critical first 12 months.

Make your individual contribution clear

Avoid the royal ‘we’. Investors want to know what you did to affect top or bottom line.

COMMERCIAL: pricing, contracts or terms. Explain the action and business impact.

DECISION SUPPORT: show what a funnel change meant – and the decision it changed.

BOARD: present a project you know deeply. Explain the questions and your response.

INVESTORS: reference banks or PE contacts you dealt with and relationships you owned.

Test the opportunity as carefully as the employer tests you

CFO selection processes can involve several stages and a substantial investment of time. Ask the recruiter why the business is considering a step-up candidate, and explore that question with the investor or talent partner early in the process.

The answer should help clarify which experience the business values, where it is willing to provide support and how it views the risks of the appointment. Ask what concerns remain about your profile so that you have an opportunity to address them.

The CEO relationship deserves particular attention. This is someone with whom the CFO will work closely over several years. Use the process to understand how decisions are made, how challenge is received and what each person expects from the partnership.

Use the first 100 days to establish credibility

A new CFO needs enough trust and breathing space to make progress. Visibility across the business, a realistic plan and delivery against early commitments all help establish that confidence.

Spend time with the people closest to customers, particularly the sales team. Understand what customers value, where deals encounter problems and what the business struggles to deliver. Use that knowledge to test the company’s equity story and the improvements needed over the investment period.

Agree an achievable early plan with the CEO and investors. Include visible improvements, manage expectations about timing and avoid promising more than the team can deliver.

Discuss reporting requirements with the investment team before joining where possible, then establish where the information comes from and how reliably it can be produced.

Understand the sales pipeline and take ownership of forecasting

The discussion repeatedly returned to the sales pipeline because of its influence on forecasts, investment decisions and confidence in the business. The CFO needs sufficient commercial understanding to challenge the assumptions behind the numbers.

Build relationships with sales operations and understand pipeline stages, conversion assumptions and the quality of the underlying data. A forecast that depends on optimistic commercial assumptions will ultimately become a finance problem too.

Scenario analysis can help make the consequences visible. Explore what happens if conversion slows, revenue falls short or spending continues ahead of growth. Discuss those scenarios with the CEO and investment director in advance so that a board discussion does not introduce an unexpected concern for the first time.

Make important risks impossible to miss

When performance is deteriorating, communicate early and be explicit about the issue, its potential effect and the response. An important warning buried in a board pack may never receive the attention it requires.

Before a meeting, decide which messages the board needs to retain. Present the relevant trends and implications clearly, with enough detail to support a useful discussion. The panel’s advice was to exercise judgement about what matters most and make sure it is understood.

Inherited reporting should also be reviewed. Check whether the KPIs support the business’s equity story and whether the data substantiates familiar assumptions. Improving the pack can make decision-making easier and provide an early demonstration of the new CFO’s judgement.

AI IN PRACTICE

Use AI to strengthen forecasting, reporting and decision support

AI use across portfolio finance teams still varies. Practical uses included large-scale analysis, dashboards and board packs, process automation and contract review.

Start in a safe sandbox with one example: what you tested, what improved and how you checked the output. Quality assurance matters for reporting decisions.

Finance cannot leave this to the CTO. Process owners in forecasting and reporting must combine domain and AI capability.

As information production accelerates, the CFO shifts towards questions and action.

YOUR FUTURE-ROLE

readiness review

Can you show a specific example of:

• analysing a large dataset faster?
• improving dashboards or board packs?
• automating a manual finance activity?
• reviewing a contract or identifying risk?
• applying a clear quality-assurance check?

Link the example back to the CFO agenda: better forecasting, clearer reporting, faster insight or more time for decisions and value creation.

The goal is not to sound ‘AI-enabled’. Show how technology improves judgement.