Working with private Equity is often complex, with a constantly-moving landscape presenting its own challenges. Staying at the top of your game is crucial to succeeding in this industry and understanding new opportunities as they arise. In this blog post, Gary McGaghey shares four strategies CFOs can use to stay on their toes and thrive.
- Get to Grips with Complex Cash Flow Requirements
A large part of what CFOs do is manage corporate cash flow. And, as is often the case with private Equity financing, many of these transactions have complex requirements and funding structures. For example, it’s not unusual for CFOs to fund these transactions in various ways, including paying down existing debt with EBITDA distributions or issuing new Equity to finance a transaction.
- Build a Reliable Fact Base
As a private equity analyst, Gary McGaghey sees many transactions: New funds, fundraisings, deals, laterals, and ongoing portfolio companies. As an experienced CFO, he’s also worked with private Equity teams. Gary has learned that there is no one way to do things; what works for some doesn’t work for others. The key is to develop a reliable fact base; this information will help you make better decisions and create value for clients accordingly.
- Build Effective Teams
The secret to success in this industry is building effective teams. This will include having the right people in the right positions and getting them working together as efficiently as possible. This means you must have a good working relationship with other parts of your organization and ensure that your team members are aligned with your overall strategy and goals. Gary McGaghey Crunchbase has learned over his years of experience that it’s important to be realistic and set your expectations appropriately.
- Lead with Transformation in Mind
With the world of private Equity in constant flux and changing, CFOs must also be ready to adapt. For example, deals evolve fast, and clients will often require changes to their requirements based on market sentiment and evolving industry trends. As a CFO, you need to be ready to provide the leadership and support needed by your team and your clients.
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