January 3, 2020 – Chief financial officers continue to be in high demand. Finding them is keeping many of the nation’s top recruitment operations busier than ever. In recent months, search firms of all varieties have placed CFOs at various companies, especially private equity-backed outfits. Mercedes Chatfield-Taylor, managing partner of the private equity and venture capital practice at Caldwell, recently placed former Dtex Systems executive Debbie Tuck as the new CFO of Helix, a San Mateo, CA-based population genomics company.
Ms. Tuck is a financial executive with broad experience in all aspects of finance, accounting, auditing, financial planning and analysis, strategic financial modeling, investor relations, external messaging with investors and analysts, and financial management. Previously, she was chief financial officer of Dtex Systems. Before that, she was vice president of corporate finance operations at BlackBerry.
Helix describes its mission as working to empower every person to improve their life through DNA. Its end-to-end population health solution enables institutions to quickly scale projects that engage communities and accelerate research and discovery, ultimately allowing everyone to benefit from the power of genomics.
Caldwell’s private equity and venture capital practice enlists a group of search consultants who share domain knowledge, relevant search experience and significant operational expertise with the firm’s private equity and venture capital clients. Many of these professionals hold firsthand knowledge of what it takes to succeed in this challenging and complicated environment.
Equally important, Caldwell said it works to understand the back stories of the major players who can move objectives forward and leverages this insight to uncover special talent for the private equity marketplace
Ms. Chatfield-Taylor is managing partner of Caldwell’s private equity and venture capital practice and a member of the firm’s technology, consumer, digital and media teams. She focuses on executive-level search for high-growth technology companies, with deep expertise in business-to-business, SaaS, social, eCommerce, gaming and other transformative technologies. She has completed more than 50 CEO searches as well as other C-level assignments for her clients, with a deep passion and expertise in helping to diversify VC and PE-backed company boards and leadership teams.
Ms. Chatfield-Taylor recently filled the CEO positions for Salt Lake City-based Global Access and RxWiki Inc., as well as the chief revenue officer at Spredfast and a board member at Austin-headquartered WP Engine.
This latest research report from Hunt Scanlon Media examines the growing talent dilemma unfolding at private equity firms – and offers an array of solutions to win the widening war for leadership. According to Hunt Scanlon, the PE sector can expect to see an expanding bidding war for top talent over the next decade. Driving the trend: persistent global talent shortages across the C-suite in most industries and functions, including finance, healthcare and biotech, digital and technology.
Linking talent to growth is this report’s overriding theme. Hunt Scanlon has surveyed private equity leaders and their chief talent officers as well as leading executive recruiters specializing in the sector. Their expert commentary and advice is contained in this year’s report. Click here to read more!
“Mercedes is the foremost search professional in the high-growth technology venture capital sector today,” said John Wallace, chief executive officer of Caldwell. “Her reputation for her relentless drive, client commitment and impeccable execution precedes her.”
“For years, Mercedes has served in an advisory capacity to a roster of top-tier venture capital and private-equity firms, assisting her clients and their portfolio companies in recruiting leaders focused on value creation,” he said. “She is comfortable serving as a behind-the-scenes executive coach to early stage founders and as a trusted advisor to public company boards of directors.”
Recruiting CFOs for PE Companies
Caldwell recently conducted a survey on the CFO role to fine-tune its understanding of the skills and experiences that define success today for a CFO of a PE-backed portfolio company and, equally importantly, which attributes may sound appealing, but are not essential. More than 300 private equity CFOs shared candid responses on their backgrounds and how they landed in their current role. The results provided a clearer picture of who sits in the CFO chair at many PE-backed portfolio companies, and the skills and credentials that are truly impactful in their leadership role.
When asked to describe their previous experience, 10 percent of the participants said, “I was a divisional CFO or number two finance executive in a PE-backed company,” while 20 percent had the same status at a public company. Another 35 percent had been a CFO of a public or private company. And only 34 percent had been CFO of a PE-backed company. So just a third of the CFOs in the Caldwell survey had previously held a PE CFO role.
Among companies with less than $25 million revenue, only 15 percent of the CFOs had prior experience as CFO of a PE-backed company, while 56 percent of the companies with greater than $500 million revenue hired a CFO with prior experience in a PE CFO role. In the three other revenue categories, the companies hired a CFO with prior PE CFO experience 40 percent of the time, or less. These findings would seem to indicate that hiring a CFO with prior PE CFO experience is a “nice to have,” but not a must-have credential for all companies, said the firm.
Caldwell also asked the CFOs: “What were the key factors in your hiring?” and asked them to check all relevant factors. Among the total population of participants, the No. 1 factor was industry experience, and the second factor was PE experience. Tied for third were a previous successful exit and a prior role as a stand-alone PE CFO.
Looking at the responses by company revenue size, private equity experience was the first or second response in all revenue categories. Likewise, industry experience was first or second in the four lower revenue categories. Among companies with greater than $500 million revenue, however, private equity experience was the top response, selected by 64 percent of the respondents, while a previous successful exit and experience as a stand-alone PE CFO were each chosen by 48 percent of respondents. Only in this largest revenue category did industry experience drop to the fourth answer, tied with public reporting experience. These responses would seem to reflect that among the largest companies, investors are more likely to be anticipating and hiring for an exit via a public offering.
By comparison, among companies with less than $25 million revenue, public reporting experience was cited as a hiring factor only eight percent of the time, while a previous successful exit was cited by 17 percent of respondents. Across all revenue categories, the CFO had Big Four experience a quarter of the time, or less.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media