PE Portco Head of FP&A Job?
Background: ~6 years out of undergrad, spent 2 years in M&A + 3 years in strategic finance at a startup that I helped take public + 1 year in corporate venture capital.
Situation: I was approached by the CFO of the startup I worked at with an opportunity to join him at a portco of a well-regarded MM PE firm. The portco is a textbook example of a PE play - a lot of low hanging fruit on finance/operations, room for inorganic growth through M&A, etc. There is no existing finance function so the PE firm is looking for a finance team that they can work really closely with to drive growth. My CFO has pitched the idea of me coming on as his Head of FP&A. This would entail building out the finance team, formalizing everything finance, and most importantly, driving a lot of strategic decisions for the company.
On a more personal level, the CFO is someone whom I consider to be a great mentor and friend. I have enjoyed working with him in the past, and I really believe that he has my best interests at heart. While there's nothing formal yet, my CFO has been pitching this pretty hard and I see it as a great opportunity to get on the CFO track fast and early.
Only downside is that this portco is in a not-so-sexy industry. This isn't a huge negative for me since I've always seen myself as more of a finance guy that can move nimbly across industries.
Since this situation is rather open-ended and there's no immediate decision I need to make, I'd love to get the community's general input on what factors I should take into consideration as I evaluate this role.
Bump
Comp ?
At the end of the day the PE firm will be your boss and telling you what they want reporting to look like etc. Also keep in mind since LMM company you will most likely have to wear a lot of hats and do accounting and other undesirable roles you don't want to do. Will you get equity?
Yes, equity will be part of the package, but we have not talked any numbers yet.
And you're absolutely right that there will be parts of the role that aren't as exciting or interesting as I might want them to be, but ultimately a lot of those undesirable responsibilities will fall under the purview of a CFO.
Working alongside a mentor in a role with autonomy and responsibility checks a couple of meaningful boxes for most people. Do you believe in the trajectory of the company and future investment result for the PE firm? Typically the performance of the company and investment is too much to overcome (both in the positive and negative). If you believe in the thesis, seems like a great role if you want to be on the CFO track.
well comp-wise the kicker will be in the MIP when the exit eventually happens.. might be worth asking if you'll be considered for an allocation there / size
Facing a similar fork in the road but on the PE side for a new fund of ~$100mm where I would make 50% of what I do now in IB. I would probably work more at the PE firm than I do in IB now since I work in a very slow product group but still get paid well. I want to go because I really enjoy working with the guy that’s asking me to come over but trading WLB and comp downward seems really goofy on paper.
Can I ask what the economics of your startup job during those 3 years looked like + your kicker on exit?
Could you share how you would build out a finance team specifically? Hire bunch of accountants/finance people? Implement finance systems? Crank out bunch of analytics, dashboards, decks, etc? Would love to be in a role like this one day.
Somewhat said in jest; it begins with being the go-to person for all accounting-related questions that fall outside of what the controller/accounting lead is willing to dig in on (i.e. "not my job"..."not my responsibility, that sounds like finance"). Taking a run down these workstreams will confirm your level of interest in building a finance/accounting organization. From there, it maps for what resources the business needs. Corporate resources to help model M&A or build a master budget model? Customer-focused finance team? Finance team that is matrixed by region/division? Technical accountant to help with acquisition/disposition related entries?
Sure, I think PCSC did a good job covering some of the roles that I would add.
On the accounting / more operational day-to-day side:
On the finance side:
And then CorpDev to support M&A
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Good managers make or break your experience at a company, so your relationship with the CFO would have me seriously interested right off the bat. It sounds like the main downside is industry which I can get, but at the same time, it's not like finance is meaningfully different between different industries (at least at a high/functional level).
I'm guessing you already know this but given lack of current finance/accounting team, there will be a shit ton of "clean up" to do. Nothing is going to tie out, getting basic data may be challenging, historical financials probably only halfway make sense (esp if there hasn't been an audity), etc.
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