The CFO of a private equity firm has some of the biggest responsibilities in the financial domain of the organisation. However, their role isn’t often limited to that only and apart from handling matters regarding risk management, financial management, compliance, etc., they are also involved in other processes like fundraising. In fact, a trend about prioritising CFO roles for fundraising receivables financing and cash flow forecasting can be easily observed in present-day business models.
CFOs in Fundraising
Raising working capital comes with its share of challenges but it’s extremely important and can’t be avoided at any cost. It’s not meant for any CFO who has the merit in terms of educational qualification or industry background, but rather someone who has the contacts, experience, and professional reputation to get the funds at terms that are in the best interest of their organisation.
More often than not, it’s rather easy to raise adequate capital for an organisation’s growing needs. However, it’s the cost that has to be paid to achieve that feat which holds utmost significance. So, a skilled CFO would know about the various types of funding viz. angel investment, venture capital, institutional investment, etc. and the role that each of them plays. However, an ideal CFO would be able to get the funds on terms that don’t harm the company in the long run. It’s their biggest responsibility to ensure that funds are not raised at the cost of business control which is something that’s seen in organisations that are so afraid of going out of business that they give away too much equity and control. It’s only then that they see the fruits of their efforts tasted by shrewd investors.
Status Quo Today
This is the age of active startup fundraising in which it’s common to see many important roles played by a CFO in raising money for their organisation. They are fully involved even if it’s the senior executives like managing partners that are presenting to limited partners. This is because the CFO has an in-depth understanding of their firm’s portfolio as well as its strengths and weaknesses in the market and will know which invoices are the best fit for account receivables financing and how the venture capitalists can be brought on board without giving up control.