Navigating the First 100 Days: A Guide for New Middle Market Private Equity Backed CFOs


Dan Stankey
Sr. Managing Director

The role of a CFO in middle and lower middle market private equity-backed companies is challenging, especially when you may be the first CFO in the company’s history.  For starters, PE investors demand a level of rigor, insightfulness, and timeliness around financial reporting and KPIs at a higher level of sophistication than the organization is used to. 

As a key member of the management team, tackling the first 100 days can be overwhelming for the entire team, but especially challenging for the accounting and finance folks.  You have a key role in the organization and will be expected to help lead the entire business through the transition. 

Here is a “quick start” guide for new lower middle and middle market private equity-backed CFOs, offering essential steps in the early days of your tenure:

  1. Cash is King – and don’t forget it!  As soon as possible after starting the role, gain an understanding of the cash position, controls over cash, forecasting of future cash flows, understanding how cash impacts the credit agreement (e.g. excess cash flow provisions, revolver availability, need for deposit control agreements, etc.) and how the order to cash cycle works.  In my experience, cash management is critical to all deals due to the need to fund internal growth opportunities, pay down debt, fund dividends, acquire an add-on company,  buffer for a downturn in the business, etc.  For one reason or another, cash will get tight – be ready for it, and by the way, never miss funding a payroll.

  2. Leverage Due Diligence Process Reports.  If the company was acquired recently, obtain due diligence reports from the various experts utilized during the DD process and familiarize yourself with the contents.  Examples of DD reports include the quality of earnings analysis, systems and technology analysis, employee benefits review, environmental assessments, etc.  There is a wealth of information condensed in these reports and often a “to do” list of recommended improvements.  These reports provide a very useful “Cliff Notes” approach to key areas of the business – use them.

  3. Know the Purchase Agreement & Credit Agreement by Heart.  The first thirty days requires a lot of reading!  The purchase agreement and credit agreement contain a wealth of information, deadlines, deal terms, etc.  Distill key provisions from each into a few pages that highlight key dates, deliverables, and formats (e.g. compliance certificate) to act as a reminder to you of what you need to follow through on.  Over my 18 years in private equity, I’ve learned to actually print out each document, put them in a three-ring binder, and highlight and post-it note key provisions in their full text.  I know this is very old school, but I have found that I need to read these documents three times in order for the content to sink in and I know I am going to refer to them over and over again – better to have key clauses highlighted.  The point is, know these documents inside and out – like it or not, you are considered the expert on the content in these agreements within the management team.

  4. Get to Know Your Team.  “Your Team” now includes not only the folks that report to you, but also your peer group within the management team, PE firm deal team members, and especially the CEO.  These are all key relationships and the best time to begin building those relationships is during the first week on the job.  Take the initiative to set up calls individually with team members and be ready to explain your role and what a CFO does – many of your team members may not know and may feel embarrassed to ask.

  5. Review the Data: High-quality data ensures accuracy in decision-making and the ability to make informed strategic choices. Start by examining the existing processes and identify gaps and discrepancies. Evaluate the effectiveness of current reporting and data storage systems and assess the need for integration or migration to advanced tools, like data warehouses or business intelligence platforms.

  6. Assess and Invest in Talent: A strong supporting finance and accounting team is one of your most significant assets as a CFO. Assess the current workforce’s skills and identify gaps. An early clear-eyed assessment of your staff is critical to your success and the success of the business.  Get an early read on where gaps may exist and monitor those weaker folks closely over the coming weeks to see if an improvement plan may resolve concerns.  If not, move quickly to make changes.

  7. Proactively Communicate with the Private Equity Firm: Regular, transparent communication with your private equity sponsors is crucial in building trust and alignment. Share updates on the company’s performance, KPIs, and value creation plans with them on a consistent basis, keeping them engaged and informed.  Expect to lead monthly operating reviews and contribute significantly to quarterly board meetings.  Your PE deal team will be very involved in monthly OP reviews and quarterly board meetings and will look to you to contribute meaningfully in both.

Let me know if you’d like to talk through any of the above points, or discuss how our PE experienced consultants can help with your portfolio accounting and finance needs.  Contact us today to learn more.


Meet the Author

Dan Stankey
Sr. Managing Director