Do you have questions you would like answered by your peers in the proformative community?

Anonymous cfo

I am going for an interview with a PE firm for a cfo position the question they asked me to prepare on is how I would spend investors money under time requirements.They basically want my experience le

Asked on Oct. 31, 2014

Answers

Wayne Spivak President & CFO • October 30, 2014

You have to understand the PE mentality.

A) Reduce burn rate
B) Increase value
C) Increase value
D) Reduce burn rate to increase value

Thus you need to run lean and mean; which means more than just watching pennies, is obtaining the best GPM, sales to real budget (not just what the PE firm wants) and making sure the PE firm doesn't suck to much cash out in expenses.

Obviously you need to does this with aplomb and finesse.

Good luck!

Lyle Newkirk CFO • October 31, 2014

It also depends on the company. For many technology companies, valuation is all about accelerating revenue. If this is the case with the company for which you are interviewing, I would say I would spend first on the drivers of revenue all the while making sure you stay within burn rate limits (per Wayne's comment above).

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