The Current Overheated CFO Market – Causes and Solutions

The Current Overheated CFO Market – Causes and Solutions

Today’s CFO market is beyond hot, it is on fire. Not since the dot com heydays of 1999 and 2000 have we seen a market like this. Insiders such as CFOs and Investors see it. CEOs trying to attract talent see it. Executive recruiters are feeling it every day. I spoke with a female CFO last week who told me I was the 12th recruiter to call her in the preceding week! She only took my call because she knows me.

What is going on? Why is this happening and what can be done to solve what seems to be an intractable imbalance of supply and demand?

A blistering IPO market

Certainly, the obvious answer is the IPO market. Check out this data:

  • Nationwide, there have been 368 IPOs total this year to-date.
  • In 1999 there were 486 IPOs.
  • In the Bay Area alone there have been 86 IPOs YTD, with several more in the pipeline before this year concludes.
  • Last year was almost as equally hot—with 407 total IPOs nationwide and 76 in the Bay Area.
  • In the previous 10 years the US was seeing about 176 IPOs on average—so the last two years, 2020 & 2021, reflect a significant increase in IPO activity.

IPOs drive the CFO market for sure. It is almost impossible to IPO without a CFO. There is a follow-on to CFOs getting recruited to IPO companies as well—it creates a vacuum from the companies they came from and it creates more ROI for investors who plow those winnings into new ventures, which in-turn need CFOs. It is the cycle of capitalism, but the supply chain hiccup in this case is not a shortage of truck drivers, rather a shortage of CFOs.


Regular readers of my blog know that I have been warning of a systemic shortage of CFO talent in the coming years for a long time now. It is upon us. Baby Boomers are retiring at a massive clip, and the pandemic accelerated this already impactful macro effect on the labor market. Many CFOs are reaching the CFO tier for the first time in their fourties. But many more are in their sixties, probably on their last rodeo. The generation following the Boomers is the smallest generation in the workplace. Hot IPO market or not, there just may not be enough people to fill all the seats the Boomers are leaving empty. In addition to this macro demographic, plenty of CFOs I have talked to in the last two years are saying this role they are in now is the last. Many of them have the money to retire and just do not want to grind out another one, no matter the rewards or their age.

Cash, cash, cash – return, return, return

The amount of capital to be invested remains at an all-time high. Venture and Private Equity investors do not get paid to sit on cash. They are looking to put capital to work and it is available. The chart just keeps going up, up, up, with 2020 seeing venture investment of roughly $130B in the US alone. With the IPO market refueling the coffers this does not seem to be a bubble. The big difference between the dot com era of venture investing and IPO exits and today’s market is that the companies this time around are real. They have real revenue, sustainable growth and it is not just one sector. Technology is changing the world we live in on all fronts, not just how we shop. From clean energy, to biotech, to food, to software to crypto and beyond companies are growing by finding real solutions to today’s challenges. (Can someone fix the supply chain soon please?) These companies are not seeking eyeballs, they are providing tech-enabled goods and services that result in money being exchanged and value being created.

So what to do if you are looking for a CFO?

First off, it is really important to know what you need in your CFO before you start looking to hire someone for the role. This may sound obvious, but in my many years of recruiting for CFOs I speak from experience. I frequently meet clients who think they need one set of skills and experience when really they need wildly different things. Don’t knee jerk into this market. Finding the right person demands knowing what is key. This may be much more subtle than first glance. For example, I hear from many entrepreneurs that the CFO MUST HAVE IPO experience. This is the most overrated skill for a CFO I can think of. The second thing a lot of CEOs get stuck on is that the CFO must come from _________ industry. (Fill in the blank.) It generally is not true and may be more of a nice to have than a must have skill for most companies.

Broaden, don’t narrow

While successful searches usually correspond to a well-thought-out target audience, my general advice on the current CFO front is to keep that audience as large as possible. Yes, I have conducted searches such as: CFO Must be female, must be willing to come to the office everyday, must bring consumer internet industry experience, with an IPO under her watch. We ended up with most of that list. But the key is to be flexible—most of what a CFO does is fungible across industry lines. If we have learned anything in this pandemic it is that people can be highly effective working remotely. I guarantee that the majority of these IPOs this year were not led by CFOs with IPO experience. The other thing to do is to look for finance executives in larger companies in “#2” roles who have most everything you need to succeed in the role. It can pay to get creative — not only in what and where you look, but also in how you go about it.

Phone a friend 

I recommend you call your trusted CFO recruiter for help in this market. While we do not have a magic wand, we do have some tricks in the bag which can bring results—like getting a return phone call above the 11 others that may not. We have some other learned experience as well— did I tell you about the “living plant” close technique?

Maybe next time…Happy Hunting! Thanks, Dave

An Executive Recruiter’s Advice for the College-Bound

An Executive Recruiter’s Advice for the College-Bound

Let me preface this blog by acknowledging that I am not a parent. But I get asked by a lot of parents and occasionally college students about what undergraduates should do to maximize their chances of success in the business world. Here are some objective and hopefully helpful thoughts.

Some philosophy about the goal of education

One of my high school mentors imparted that the academic goal of a high school education is primarily to teach budding brains how to study and how to learn. This makes inherent sense to me. In high school students need to learn how to listen, take notes, read complex material, gain understanding, and apply knowledge to class discussions, writing papers, and taking tests. On the other hand, the academic goal of a college education is to learn how to solve problems and be a critical thinker.

Application process and the importance of school selection—or not

I know third hand how hard the college application process is today. You have to apply to 8, 10, or 15 schools because that is how the game is played. It is a bit frustrating to see it from the sidelines, even before addressing the shocking bribing that is going on.

When the highly anticipated acceptance letters come in, the talk is about what schools accepted you into their hallowed halls. Then you make the big decision: which one to accept? It is less important than you think! In reality, it is not the school that you have selected that will ensure your success in business or in life. It is how you apply yourself once you are there. Based on my many years consulting with companies on their hiring decisions, any good hiring manager would take the top of the class from a state school over the bottom or even middle of the class of a “prestigious” Ivy League. What you do, how you learn, and how you apply critical thinking to solving problems begins in undergrad. An April 30, 2019 New York Times article, “Almost All the Colleges I Wanted to Go to Rejected Me. Now What?” talks about this very subject.

The importance of developing “executive presence”

I would also argue that the whole concept of developing executive presence begins in undergrad as well. The key elements of executive presence are reputation, communication, leadership, and charisma. All these traits can be seen in varying degrees in recent college graduates. The types of activities you choose to engage in as an undergrad directly affects the foundation of your executive presence and what people think of you—what leadership roles you pursued and secured, what speaking engagements you undertook. These are all differentiators and indicators of your potential in the workplace that your future employer will carefully consider.

The right major for getting a jump start on your career path

A question I get asked frequently is what majors are most sought after by businesses looking to hire entry-level workers. I would encourage you to focus on a liberal arts degree coupled with courses in computer science (CS) and business/accounting. The liberal arts training will teach you to think critically and the CS and Business courses will give you practical knowledge. Depending on the program you are enrolled in the reverse could also be true: focus on CS and Business, but take enough electives in the liberal arts program to round out your education.

The value of attending junior college

If you are a high school grad who is not quite ready for a four-year program, attend a good Junior College. This can be a brilliant strategy! Many JCs in California have automatic acceptance routes to the UC system. This approach gives you time to catch up academically and/or emotionally if this is the reason you are not going off to a four-year program. The general ed topics that are mandatory for any undergraduate degree may indeed be taught more effectively at JC than some four-year schools. It clearly reduces the financial burden, which is no small issue for most students and their families these days. Finally, I can tell you for a fact – if you go on from a JC to a four-year program no one will ever know. In my 24+ years of recruiting it has never occurred to me to ask a candidate where they did their first two years of school. But do I look at where you graduated from? Of course.

Undergraduate diploma vs experience

So how much weight does an undergraduate degree carry? Is someone 10 years out of school from an Ivy League an immediately superior candidate to someone from Chico State? Not in my book. What we look at 10 years out are your achievements in the roles you took on. What sort of progression have you achieved? What types of companies have you worked for? Who have been your mentors? What are your accomplishments?

To counter this argument, it may be true that the top-rated universities have more on-campus recruiters from top-tier companies combing the ranks for the best and the brightest undergraduates. But if you are in the best and brightest in a lesser-known program which may not be on the on-campus radar, it is upon you to make yourself known to the companies you want to work for. This entails a diligent effort, but it most certainly can be done.

As a follow-on to this blog, I will write one about MBA programs, a different animal.

Congratulations on your graduation and acceptance. Now, go forth and learn to solve complex problems; we need your contribution in this complex and ever-changing world! If you feel so inclined, shoot me an email with your comments and or questions at I look forward to hearing from you and wish you a productive and satisfying career.

Strong Momentum Runs into Significant Headwinds: My 2019 Outlook

Strong Momentum Runs into Significant Headwinds: My 2019 Outlook

2018 wraps up with the strongest employment market in memory. While the stock market took a bit of a dive at year-end, as 2019 springs up so does the Dow. There is definitely a shortage of “been-there-done-that” technology CFOs, but will it matter if companies do not need to hire one in 2019? We are at a pivotal moment with China and China with itself. Indeed, we seem to be at a pivotal moment in the US economy and with politics. The proverbial unstoppable force is headed for the unbreakable barrier. Who will win?

In regard to finding exceptional CFO talent and diversified Board members, there is reason to be optimistic no matter what happens politically. As noted in my blog, “Gender Diversity on your Board of Directors and California SB826,” in California at least, there is reason to believe that corporate boards will need to act to bring gender diversity into reality.

On the CFO front we are still in a shortage situation and I believe the shortage is systemic as noted in my article, “The Dawning of the C-Suite Candidate Scarcity” presented on Recruiting Trends & Tech Talent’s website earlier this month. The proof of my theory was in evidence at the end of 2018 with Airbnb, Uber, and RobinHood—all Mega-Unicorns who were all hiring first-time CFOs.

So, we have in a way two parallel hiring universes facing us in 2019. On the Board front the need to appoint women is absolute. On the CFO front even the most valued private companies are waking up to hiring first time CFOs to take them into the public markets. I have not heard the proverbial “must have previous IPO experience” from a founding CEO in some time. As we look back at 2018 maybe it really was a turning point in the demographic.

The impact of political and economic decisions in Washington are real and could put a dent in these market realities, however. If China’s economy continues to slow it will impact technology companies. Apple has already demonstrated the domino effect; when Apple sneezes their huge supply chain catches cold. If we cannot solve our domestic squabbles there will be a direct hit to the economy, which will affect hiring. Already, IPOs are at a standstill with no one at the SEC to even review submissions. Shall we boycott paying taxes since no one is at the IRS to collect them? (Good news IRS, I already sent my payments! LOL)

My advice for clients on the Board front is to move thoughtfully and quickly. The best and brightest women will be picked up fast and once on a board or two that is probably it for most. My advice for clients on the CFO front is to continue to think creatively around the critical skills needed in the role rather than the pedigree or specific experiences on a person’s resume. To facilitate either of these hires it helps to have a passionate, knowledgeable partner at your side, and I hope you will consider me.

If you are a female executive reading this and feel you are right and ready to serve on a public company board, please feel free to reach out to me; I would enjoy getting to know you better. If you are a CFO or CFO in waiting I am cautiously optimistic that 2019 will remain an employee’s market over an employer’s market. As you can see from my “Recent Searches” PDF accompanying this blog, I am not a high-volume shop. I meet 200-300 people every year and place about 10. That is just the nature of executive search, but I welcome these meetings because they are what excites me the most about getting up in the morning: talking about your career!

So, we shall see…I choose to be always optimistic and 2019 is no exception. I look forward to hearing from you, email me at or call 408-205-7373.


Have you ever been presented with a counter offer?

Have you ever been presented with a counter offer?

The Dreaded Counter Offer

Have you ever been presented with a counter offer after resigning a position? Or, have you presented a counter offer to an employee who resigned?

Let me clearly state that one should (almost) never accept a counter offer, and why companies as a policy should (almost) never make them. None of the CFOs I’ve placed have accepted a counter offer. This dreaded possibility is always discussed prior to my making an offer on behalf of my client.

I was recently interviewed by FierceCEO for an article about counter offers, and as is frequently the case, the reporter only used a few of my words, so I’m jumping on this soapbox as a public service and as a refresher on this important issue!

Explore Your Motivation

It’s easy for a company to make a counter offer. Much easier than trying to get the work done without you and experiencing the pain that would be felt in your absence. But the truth is, as soon as you walk into your boss’ office and resign, a critical line of trust has been broken and will most likely never be repaired. Typically, counter offers include an increase in pay and perhaps a title boost. In my many years of recruiting CFOs and C-level executives, it’s clear to me that people don’t change jobs merely for money. There are a whole host of other reasons. Usually it’s because they don’t like their direct boss, they don’t agree with the strategic direction of the company, they don’t see a route up the ladder, they are bored with the work, they hate their commute, or their benefits are lousy and getting worse. Or a combination of some of these factors.

If you accept a counter offer for more money, the root cause of your unhappiness will still be in place. And, your increase in pay could be an annual increase just given early. Calculate the after-tax value of that increase. Is it really worth it? My cynical side also says that if you accept the counter offer, you’ve just provided cover time for your employer to start looking for your replacement!

Band-aid Solution

Most counter offers only put a band-aid on the wound. They usually start with praise about your important contributions or they present some big project that is coming up they plan on giving you. They almost always include some increase in pay. I don’t have research to back this up, but conventional wisdom says 80-90% of people who accept counter offers end up leaving within a year. I made that mistake myself once and missed out on joining my next company when the stock was much cheaper. I was fairly low level and the counter offer included a call from the CEO. Talk about being swayed to stay! I stayed ten months after accepting a counter offer. Lucky for me, the offer I accepted and turned down was still available!

People make a change because they’re moving away from things, or moving towards something — a better company, a better role, a shorter commute, etc. Usually people have some items on each ledger, a combination of moving away and towards. If you’ve lost trust in your current company and considering an offer elsewhere, think through what accepting a counter offer really means. If you take the counter offer, you have to tell your new company that spent weeks/months getting to know you that you will not be joining them. Good luck going back to them when your root problem returns in your new role! Making decisions is largely what executives get paid to do. If you second guess your decision to leave, what does that say about you?

The Exception!

I can think of one instance where a head of engineering resigned to the CEO having accepted a large role as division general manager in a new company. The new role was bigger than his current one and paid significantly more, but the company was not as exciting or successful as the company he was working for. This savvy CEO got to the root cause of this executive’s motivation for change — he wanted a more strategic rather than an execution role. The CEO didn’t make a counter offer to keep this exec in his role, he actually created a new position as head of strategy that fully enabled the potential deserter to remain with the company, reputation intact! So this was not a mere title change, it was truly a new job. (The reason I can tell this story is that the executive is my brother. He stayed in the new role for several years and later retired.)

If and when you do resign, do so with dignity and thanks to your current employer. Make a good hand-off and leave as quickly as you can without burning any bridges. Back up your verbal resignation in writing. You will need your references down the road. We are in an incredibly tight labor market, so be sure-footed and clear about your reasons for moving on. To steal from the Kona Brewing ad, “One career bro, don’t blow it.”

I invite you to share your experience with being offered or offering counter offers. Or if you’d like to learn more about our process and how it supports successful career decisions, email me at


When to Hire a CFO? At Each Stage of Growth.

When to Hire a CFO? At Each Stage of Growth.

Recently my friendly competitor and colleague Cliff Scheffel published a white paper titled, “When is the right time for a tech startup to hire a CFO?” What I really liked about his report, which was co-written by Jeff Epstein of Bessemer Ventures, is that it gives analytical support to what all three of us have experienced as search executives and as investors. It provides a CEO, board, or founder with specific metrics that signal when to hire a CFO. The key markers cited are 100 employees, $25MM in revenue, and/or revenue growth of 100+%.

The report was well done. Let me know if I can send you a copy.

I got thinking about a related question: what factors or changes call for changing the CFO? I believe that in some cases, the first CFO, perhaps at the stage of company that Cliff and Jeff outlined above, can grow his/her skills along with the growth of the company. In other cases, a change in CFO is needed as the company changes.

IPO Stage

It’s common for companies to contemplate a change in CFO when they start to seriously look at an IPO. In a VC-backed company, the investors are always looking for ways to minimize risks in their portfolio. If the CEO doesn’t have previous public company experience, that is also an important consideration on when to hire a CFO – the investors will almost certainly want an experienced hand in the CFO. If the incumbent CFO can demonstrate the ability to communicate the story to investors, they may be considered a candidate, but this situation will frequently prompt a CFO change.

Pre-Revenue to Commercial Stage

What about a company that goes from pre-revenue to commercial stage? This too can prompt a CFO change. We see this in the Life Science sector of our technology practice at Arnold Partners. If a bio or pharma company is successful in getting a drug approved, they have a major decision to make about bringing that drug to market. If they plan to build out a commercial organization, the role of the CFO changes materially. I actually had a CFO tell me a few weeks ago, just as his organization with going through this change, that he wanted no part of being in charge of a revenue-producing company!

Beyond IPO and Commercialization

Beyond IPO and commercialization, other changes in a company can affect options for when to hire a CFO. For many tech companies, international expansion is happening earlier and faster than ever before as tech goes to the cloud. In the med-tech side of things, sometimes getting a CE mark of approval is a better strategy to prove product acceptance than trying to fund a US-based study for FDA approval. These considerations affect the role and requirements for the CFO big time.

In an earlier blog, I wrote about how most CFOs get their first chance in the seat through a battlefield promotion. This can be a big break for a Controller or VP Finance that significantly changes the trajectory of their career. However, CEOs need to be careful in making a choice out of convenience over careful consideration of a slate of curated candidates while also considering the company’s stage of growth. Running a search process in parallel to a temporary promotion of a number two can pay dividends for all the parties: the CEO, the board, and the person in the seat. It can provide an objective test of the market to make sure the right person is running the show and that careful consideration is taken for all parties.

In only a few occasions have I seen a CFO go from pre-public company CFO to passing $1B in sales. It’s rare. CEOs need to be diligent to make sure they have the right CFO partner as their companies evolve in complexity and size. If you would like a consultative review or even more information about when to hire a CFO, please contact me at or call 408-205-7373. As a corollary to this subject, my next blog will be about the importance of agreeing upon a good position specification when starting a search, “The Spec!” Stay tuned.

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CFO Recruiters: Creating Value on Both Sides of the Search Process

CFO Recruiters: Creating Value on Both Sides of the Search Process

Interesting conversation yesterday with a top-tier public company CFO. He was musing about the search process and about how UN-informed so many CFO recruiters are when they call with supposed opportunities. Recently he was called about a supposed “confidential” search for a public company. The CFO from this “confidential company” had already announced their departure and the company had already made the necessary public filings. After asking some questions about the opportunity, this CFO quickly figured out who the company was and wondered why the recruiter was being so coy?

Certainly there are times when we CFO recruiters conduct confidential searches and the company name needs to be held in check. However, the recruiter reaching out to this CFO was not helping his cause, or his client’s.Our conversation led to his revelation about the value that different CFO recruiters bring to the search process.

 All things Not Being Equal

The CFO told me what differentiates me from other CFO recruiters when I’ve called him for CFO opportunities in the past is how thoroughly I understand and explain the client’s situation: from details about the CEO and the organization’s capital structure, to market opportunity and the challenges they face. He said few CFO recruitment calls are as informative as the ones he receives from me.

Creating Value on Both Sides of the Equation

It’s executive recruiters’ job to present to a CFO a detailed description of the opportunity in a convincing and truthful manner. If we can’t entice the CFO to the table to meet the CEO, we have failed in our duty; however, it’s not our job to oversell the situation. It’s equally imperative that CFO recruiters present the backgrounds of our CFO candidates to our clients in a similarly thoughtful, thorough manner. This is what I mean by creating value on both sides of the search process.

The importance of this balance to a successful CFO placement is why Arnold Partners doesn’t rely on outside research or junior staff for any part of our search process. We are boutique in our very nature—personally attending to every detail of the search process until it’s complete. The call to a CFO about a client opportunity is probably the most important one; I can’t imagine outsourcing that process. CFOs by their nature are skeptical and analytic and don’t want to be sold. In order to get their attention, we have to present a deep understanding as to why THIS particular client opportunity is tailor-made for them.

The Art of CFO Recruitment

What is not too surprising, we receive many “not interested” responses from CFOs even after this thoughtful process. Generally speaking, most sitting CFOs are not looking for new opportunities. However, birds of a feather stick together, and many CFOs who were not initially interested either come back a few days later for a “tell me a little more phone call.” Or more frequently, they are quick to make a referral. This is the art of recruiting that can’t be carried out by an outsourced or junior person. This intimate knowledge of the client, presented on point to a specifically targeted audience, is how Arnold Partners continue to create value for both our clients and our CFOs.

When you’re ready to hire your next CFO, please contact me at or call 408-205-7373. If you’re a candidate and you haven’t read my posts about CFO Compensation or How to Become a Successful CFO, I highly recommend checking them out now.