Defining and Finding Exceptional CFOs

Defining and Finding Exceptional CFOs

Taking stock in June 2024: For several years now, my tagline in marketing Arnold Partners to clients and candidates is “We help deliver Exceptional CFOs” for our technology clients. But what does this really mean? Are there empirical ways to define what exceptional means? So much of being an effective CFO has less to do with credentials than it has to do with action and leadership. Resumes can speak to the ante to get into the game, but clearly determining what is exceptional and who will have impact for positive outcomes is certainly a more nuanced analysis than just looking at degrees or years of experience or previous company success.

That said, I recently decided to look back at the last four and half years to see from a purely experience standpoint, what do the CFOs that Arnold Partners places with our clients bring to the table? What is the ante and the stakes to get into the game? We decided to limit the look-back to 2020 to keep the results time relevant. Here is a snapshot of aspects we found of the 34 CFO placements we have made since January 2020:

  • 70% of the CFOs have MBAs; 50% of those MBAs are from top-five programs. Of all the MBAs, 20% also had a CFA or CPA background and two had Ph.Ds.
  • 62% of the CFOs have an Investment Banking background, all from top-tier banks.
  • 44% have CPA designations.
  • 80% have previous experience as a CFO. 70% were previous Public Company CFOs, and of those, 50% had taken a company public.
  • 100% have been in high-growth technology companies at some point in their career.
  • The mean level of years was 22 prior to my placing them into their new role, and the mean number of years in the C-suite before this new role was seven years.
  • Seven were first-time CFOs.
  • And 11 of the 34 (33%!) placements were female, I am happy to report, far exceeding the national level in that category.

Different paths for different folks

Clearly there are distinct paths to the CFO seat, but it seems that most of my clients ask for public company CFO experience, and ALL of them want people who have been with a company at some point in their career that experienced exceptional growth. I think in industries outside of technology this may not be as important a criteria for determining exceptionalism. But in the tech industry, when a company is hiring a CFO (particularly for the first time, which is often the case with my clients), it is because they are already in a hyper-growth mode or are expecting to be in that mode shortly. When this happens a lot of pressure is put on the finance function to manage cash-flow, ensure proper capitalization, and make high pressure decisions quickly. If decision support is delayed it can make or break a company. This is why public company CFO experience supersedes all degrees or credentials. CEOs and Boards need to know they can trust the CFO to guide the ship when all hell is breaking loose.

There are certainly a number of people we have placed who had never been a CFO before. In three cases we recruited people right out of an Investment Banking background into the company. This takes a special circumstance of support in the company to ensure this transition will be successful, with highest on the list having a strong technical Controller in place. In a few other cases, it was taking someone with great potential who was a great cultural fit over a been-there-done-that candidate.

Want to jump in the game?

So what if you are ten years into your career and want to be a CFO? On average you have about 12 more years to get there. If you are not in Investment Banking it is certainly too late to get that experience. If you did not go the CPA route, that ship has sailed as well. What can you do? The evidence shows that attaching yourself to a high-growth company where you can get lots of varied experience would be the A-number-one thing to look for. When companies are in hyper-growth mode, there is a huge amount of pressure on the finance team to support the growth with real-time analysis. This burden creates opportunities for support staff to the CFO and the eager professional will jump to help in a variety of ways creating value in the chaos.

By being present, jumping in to solve problems, and being a strong resource for the CFO is the best thing you can do to gain the experience you need. Working under a CFO who is willing to mentor you is critical for your future steps.

The key to correctly assessing CFOs

Coming back to the less analytic metrics of the CFO role, how do we at Arnold Partners go about assessing a CFO’s leadership skills? Communication skills? Their ability to influence outcomes that may not be under their direct control? How did they manage that exceptional growth? How did they manage the cash burn and financing to support it? How did they say yes and no at the right times to support critical decision making?

The only way to make an assessment of a CFO is by having specific, in-depth conversations with the CFO on these topics. We further expand on those conversations with 360-degree reference checks to verify what we heard in those conversations is verifiably true. We fully embrace AI technology for sourcing CFO talent and have an excellent tool to employ to supplement our process. The only way to know if you are attaining exceptional talent for your firm is to partner with a seasoned recruiter who is laser-focused on your specific needs. We stand by our experience of defining and finding exceptional CFOs.

And of course, a resume read cannot determine cultural and mission-alignment fit. One of the key elements in CFO search is pairing the right CFO to the CEO in compatible and complementary ways. For example, for one of the Ph.D CFOs I placed with a CEO who also had a Ph.D, the intellectual fit was important for my CEO, but in many other ways the CFO was very complementary, coming from a wholly different sector of tech and bringing with him fresh perspectives that immediately had impact for my client.

If you are a Board Member, Investor, or CEO thinking about hiring a CFO, please call me for a no obligation consultation about the current CFO market conditions over the phone or coffee. If you are a high-growth CFO or want to be CFO, please reach out as well so I can get to know you and what you are aspiring to. Thanks, Dave, moc.srentrapdlonra@divad

A special shout out to Reilley Bennette who helped pull the statistics together for this article. If you are looking for an entry-level financial analyst, Reilley will be graduating SDSU in Spring of 2025 and he is top-notch! You can reach Reilley at:




Technology Industry Economic Cycles – a Long Personal View

Technology Industry Economic Cycles – a Long Personal View

When I first started in the recruiting industry back in the early 1990s, the tech sector was going through a minor recession along with the US Economy on the whole, with unemployment peaking at 7.8% in 1991. The firm I worked for at the time had a nationwide footprint, and the effects of the recession were not equally felt in every market across the US. The East Coast seemed to take the brunt of the slowdown, and top management at the time felt it was important for the company culture to spread the pain of regional slowdowns equally across the firm. This meant that even though our little outpost in San Jose, CA was ahead of goal, no bonuses were paid so that other producers could be propped up in the less successful regions. One for all and all for one I guess, but it seemed a rude introduction to what is normally an eat-what-you-kill industry. Perhaps for me it was an early lesson that self-determination may not always be possible in a large corporate environment.

As the economy started to improve nationwide, the kindling of the DotCom boom was beginning to catch fire. Throughout the 1990s, the tech sector grew at a faster rate than all others as innovation in computing power was having tangible productivity gains across all businesses. Computers were faster, had cheaper memory and storage, and applications continued to grow. Oracle, Intel, and many other bell-weather tech firms were growing at a rapid clip; a specialized graphics chip company called Nvidia was starting to take hold. To be a recruiter on the way up in this environment was fast paced and rewarding.

By the late Nineties, we were hurdling full speed ahead into the DotCom boom. The internet was new and exploding with possibilities. People from all over the world were flocking to the San Francisco Bay Area to be a part of the digital gold rush. Companies were formed quickly and were funded easily. I remember going to a talk by Guy Kawasaki, who postulated that if the opportunity for the internet was a sail across the Pacific Ocean, in the late 90s the boat had not even left the Bay. Prescient! To be a recruiter in this era was almost easy. In fact, it seemed just about everyone was a recruiter and everyone was on top of the world. Until we weren’t.

Painful times

The pain of the DotCom bust is hard to explain to those who did not live through it. It is estimated that in the early 2000s, the Bay Area alone lost 360,000 jobs. I remember looking at a list of clients from 1999-2001 in 2003 and NONE of the companies existed anymore. When there are 360,000 people laid off, a company generally does not need to hire a recruiter. (As I have said in earlier blogs, the number of “A” players does not really change, and even in lean times a specialized and highly experienced professional recruiter can help deliver game-changing talent. In the arena of CFOs, it is critical that a company have a top-notch CFO in good times and in bad.) The air was out of the balloon. The good news for those of us who chose to stick around is that when things did start to return to “normal,” there were far fewer recruiters to compete with!

While things did not jump back to pre-DotCom levels, there were some very exciting companies that emerged in remains of the bust. Facebook (2004), LinkedIN (2005), Palo Alto Networks (2005), Airbnb (2007) to name a few. So the Valley was not dead, just not chasing eyeballs as much as chasing revenue streams. Certainly, the blue-chip VC firms found a way to survive, but many of the lesser-known firms simply disappeared along with the companies they had invested in. It seemed we were starting to get some good momentum when along came the Lehman crash of 2008, and the dominos fell hard in the real estate sector. While this recession was not tech-centric, it did put a damper on the enthusiasm that had started to seep back into the market.

Baby bear moment

With some distance now, it seems to me that the most “normal” economy we have had in Silicon Valley was between 2014-2018. It was a baby bear moment – not too hot, not too cold. Companies with a solid business plan could find funding at valuations that were in line with long-time consensus. The honey that allowed this “normal” economy was the near 0% interest rates that the Fed had imposed to help the real estate market recover. With investors not able to find good returns to support their pension annuity assumptions, more and more investment dollars flowed to “Alternative Assets,” of which our VC community is a leading vehicle. As more money flowed in, things started to get frothy again. Good companies were raising money, but valuations were getting out of step with the underlying business models.

Reality check

So where are we now in mid-2024? Fed rates at 5.5% give money managers more optionality in investing in safer money than Alternative Assets. The big VC firms with good returns will raise new funds; those without a track record will have a tough time. It is estimated that there are some 1200 private tech unicorns. I do not see a path for most of these companies to IPO at their last valuation. And this is now the stalemate we find ourselves in. Private company valuations do not match the public market valuation models. Nor do they match the models for P/E or late-stage growth investors. It is going to take some time and pain to work through this disconnect. While the national unemployment rate is running at a 50-year low, the tech sector has felt some pain in terms of layoffs. In fact, in the last 18 months we are back over that 360K number we had during the DotCom bust! (Source:

I think the biggest learning emerging from what was an easy money environment to today’s tighter money environment is simply valuation. Companies who can raise money now should focus on who their funding partner is and seek a long-time supportive partner, and not chase the highest valuation. In fact, they should focus on keeping their valuation as low as they can. (I recently did a CFO search for a post F VC-backed company. I was concerned at the kickoff about valuation, but in fact the founder had been a VC in a prior life. He kept his company’s valuation extremely low!) This should always be the rule, but for a lot of reasons this was not the guiding principle over the last few years.

Always optimistic!

As for me, it is shaping up to be a good year, and I will weather this storm too. And indeed, it is already the case that there are far fewer recruiters working in tech. This Valley is resilient, and I am always optimistic about technology and innovative tech companies changing our lives for the better.

I welcome your comments.


Get Up and GO!

Get Up and GO!

From a young age, I always had a lot of “get up and go.” I was constantly on the move in work and in life; it was instilled in me by hardworking parents who were a true inspiration. My first real job at 12 years old was a paper route that required predawn wakeups seven days a week. A few years ago, while in New Orleans I came across this sculpture called Go! As you can see in the picture above, it is a porcelain-headed, handmade figure, delicately balanced on a wheel on a downward incline, which gives the sense that he is about to GO! (Kudos to the extremely talented artist Cathy Rose who created him.) Go! is the first thing I see every day when I wake up in the morning. He always puts a smile on my face as I say to myself it is time to get up and go!

Fuel for the fire

What is it now that fuels the fire to get up and go every morning? Many things, but two are the driving force. The first is to provide excellent service to my clients and candidates, which I deliver by “putting good people with good people.” In one of my first roles as a recruiting manager, my trainer was pacing me through the qualities the firm looked for in new hires. She said: “When you ask someone why they want to be in the recruiting industry, and they reply, ‘Because I like people, I’m a people person.’ Do not hire them.” After 30+ years in recruiting I still think this is true. Liking people has little to do with what recruiters do day in and day out. For me, the benefit of being in this profession as long as I have is the ability to be selective with whom I work. Many of the relationships I have built over the course of years have manifested many additional searches – the experience of a search may be transactional, but the essence of successful search is all about building relationships and repeat clients. The result of putting good people with good people is that great things happen. By working with good people, even when a search gets challenging, ultimately the results are predictable, and the process is enjoyable. That is the real fuel for the fire.

The second thing getting me up in the morning is mentoring a few select folks to help them make their way up in the recruiting industry. This has been an unexpected joy in my professional life the last few years. Working on my own can sometimes be a bit isolating, despite all the client and candidate calls I make. And mentoring has actually increased my focus on client work because it has rejuvenated my sense of awe in what we do in search and confirmed my passion for the work itself. It is interesting, while I think I am the mentor, it is very much a two-way street, and I have learned as much as I have offered! While I have no ambition to become a full-time recruiter coach, it is truly fun and an honor to be able to share some of the lessons learned in my lengthy career as a self-employed executive search consultant. It is said that giving back is more rewarding than anything else, and it has been true for me. This sentiment is elegantly expressed by Cullen Hightower, who wrote: “The true measure of your worth includes all the benefits others have gained from your success.” I hope to continue to do this pro bono work for many years to come.

A match made in…

When I first decided to become a recruiter, I was only a couple of years into my finance career. My parents had helped me financially to attend and graduate from Loyola Marymount University – a major investment. I was so nervous when I was getting ready to call my parents to let them know I would not be pursuing a career in finance – but of all things I was going to be a recruiter! I thought they would be so disappointed. Ha! The opposite was true. They laughed and told me that they had always been “match makers” and had put many couples together. They said recruiting is all about match making and that it was in my DNA. They encouraged me and believed I had discovered a true path to happiness. And I did.

Ultimately the end of a successful search process results in a good match. One of the most important matches of all in a company is between CEO and CFO. As I have blogged more than once, it is not unlike a marriage, and I would wager that CEO and CFO may spend more waking hours together than with their respective spouses. If it is not a good match it is lose (CEO), lose (CFO), lose (Company). Attaining the technical elements of what a company needs in a CFO is not the hardest part in my work anymore. The magic and value creation I provide is making a good match. And it is more than in my DNA – it is earned from almost 30 years of putting people together. What I am most proud of professionally is not having to employ my 12-month guarantee because of a bad match in the history of Arnold Partners! We measure the good matches by enterprise value creation – IPOs, Market Cap, M&A exits, which all added up is now in the 10s of billions of dollars.

What is your get up and go motivation? How do you sustain it? I’d love to hear from anyone on this topic.

Cheers, Dave








“Mr. Irrelevant”: The Brock Purdy Hire

“Mr. Irrelevant”: The Brock Purdy Hire

As we gear up for Super Bowl week, it strikes me that there is an obvious lesson staring us in the face about hiring for success in the Brock Purdy story. Brock was drafted by the 49ers as the VERY LAST pick of the draft in 2022. Not only the last pick of the 49ers, but the very last pick of all teams in the NFL. Here we are, two years later, and he is leading the team into the Super Bowl. His competitor last week on the Detroit Lions was none other than Jared Goff, the VERY FIRST pick of the 2016 draft. What can be learned from this in terms of hiring?

In my many years of helping Venture-backed and Public companies attract exceptional CFOs, the mix-up of optics about a certain candidate’s skill set happens more frequently than one would think. When investors are looking to hire a CFO (or probably anyone into the C-suite), they look for certainty and reduction of risk. If the candidate is coming from a well-known or brand-name company, they must be certified as top-tier. Conversely, if the candidate is coming from a company that has had a hard time of it, the candidate must somehow be held accountable. I call this hiring for optics. It is not the way to assess talent, fit, drive, competence, or anything else. Being at a high-flying superstar company does not make the individual a superstar. In fact, it could even hide weaknesses. Being at a struggling company does not make the individual the scapegoat, in fact, working through adversity probably makes the employee stronger for the next battle. Going up and to the right on the growth chart is the easiest thing in business. Facing daily struggles can build up character and tenacity. Just like the stock market, previous returns do not guarantee future returns. We need to invest in people like Warren Buffet invests in companies: hire what you know, hire for upside, and not for what happened in the past.

So, did the 49ers really see a superstar in the making when they drafted Brock Purdy, or did they just get lucky? Maybe some of both. Clearly, the success in his young career is not luck. He has skills that match the complexity of the 49ers offensive scheme. He makes lightning-quick decisions. He executes on those decisions with a precision that makes other quarterbacks look on in envy. He hits the short pass and the long pass, he scrambles and throws on the run with the best of them, and as he proved last week, he can use his legs for long runs when the opportunity presents itself. These skills did not magically appear in the last two years. Certainly he was thrust into the role of starting quarterback because others ahead of him got hurt. And indeed, once in this leading role he has received an exceptional amount of coaching. But he had to have an underlying base of skills to reach this level of athletic competition. Beyond just physical skills, he has the mental aptitude and toughness to execute at the highest level.

How can we take this incredible hire from the bottom of the heap and apply it to executive hiring? May I suggest we first not judge the book by its cover. We need to dig deep on the people we evaluate on a number of fronts – not just the optics of their previous employers or Ivy League degrees. What matters is what happens in the trenches. What matters is character. What matters is poise under pressure. What matters is doing the right thing when no one is looking. What matters underneath the resume is the person. This type of hire was outlined in Moneyball by Michael Lewis and explored further in an earlier blog by yours truly:

I am not suggesting that someone who has never had success is a good hire. To get to the NFL, you have to be top-notch. To get to the conversation about a CFO role with an Arnold Partners client, you have to be top-notch as well. But the skills in evaluating what makes someone top-notch in their profession should be left to someone who knows what that means and not be based on optics of the past. If you want to explore this further, give me a call, I am happy to discuss.

Go 49ers! Go Mr. Irrelevant!
– Dave

I Got the Inside Scoop on SaaS

I Got the Inside Scoop on SaaS

Interview with Erick Mersch

I recently had the pleasure of interviewing Eric Mersch, a partner at FLG Partners. His firm is the leading boutique CFO consulting organization for technology companies, the market segment that is also my bailiwick. I have known Eric for 15+ years, and we have collaborated numerous times to deliver high-value CFO leadership to CEOs and Boards.

Eric and I had a lively conversation about his new book, Hacking SaaS: An Insider’s Guide to Managing Software Success. It is based on his 10 years of experience exclusively focused on helping SaaS (Software as a Service) companies drive and measure growth. You can watch a short video of this interview at this link on my website. The video will go live on September 19th.

He and I had a lot to talk about because of our shared interest in the wonderful world of SaaS. Arnold Partners has placed CFOs at numerous SaaS companies, including Houzz,, OpenGov, Talend, Adaptive Insights and Visitpay. During our talk, Eric and I discussed the nuances of SaaS – Vertical vs. Horizontal, B2B vs. B2C, Enterprise vs. SMB, etc. With this overlapping knowledge of the industry, the chat was both reaffirming and educational.

Getting down to the real nitty-gritty of SaaS

Eric’s book focuses on both technical and business aspects, equipping readers with a well-rounded understanding of what it takes to thrive in the competitive world of SaaS.

It combines practical advice, strategic insights and real-world examples to guide readers through various aspects of SaaS management, from driving sales through Go-To-Market strategies and customer engagement. It is geared to a wide range of professionals including investors, entrepreneurs and business executives working in the SaaS industry.

Key in his book is an extensive glossary of SaaS-specific terms, their meanings, how to create and calibrate the various SaaS metrics. Some will be familiar to folks outside of SaaS such as CAC (Customer Acquisition Cost), Net Retention Rate, Lifetime Contract Value, etc. But Eric goes deep on all these measurements; he shows the reader the way to implement them, their meaning and how to improve them to drive SaaS success. The book is a valuable reference resource for any finance professional.

Where to purchase Hacking SaaS: An Insider’s Guide to Managing Software Success

Hacking SaaS is available on Amazon in eBook, paperback and hardcover formats. For more information about Eric, visit:

To learn more about Arnold Partners’ and and our recent SaaS placements, visit CFO Placements, Venture Capital Relationships | Arnold Partners and scroll down to recent placements.

Join us October 4, 2023 for an Arnold Partners Webinar on Executive Presence

Please be on the lookout for an upcoming invitation from me to join a webinar on Executive Presence that I will be hosting with Karen Tiber Leland, founder & president of Sterling Marketing Group. It will take place October 4th at noon PDT and limited to 100 participants. If you see this note and want to be included, please email me at moc.srentrapdlonra@divad with subject line: Webinar. Thanks for your interest, looking forward to seeing you soon, Dave

CFO role greatly expanding; what’s the impact on hiring and retention?

CFO role greatly expanding; what’s the impact on hiring and retention?

There has been a sea change in the role of the CFO over the last few years. The CFO is a business partner to the entire C-suite and a co-leader of the company, leading enterprise-level change initiatives that touch on every aspect of the business. Think of systems implementations, use of AI, pricing, change of business models, etc. The CFO of today understands the vision of the founder/CEO and helps crystalize that vision into a culture and a workplace that make it a reality. The result is an enterprise that is in a stronger position to empower and enable the company to achieve its goals. As we face increasingly choppy economic waters and higher cost of capital, these are important changes that will affect both hiring and retention of CFOs.

Direct quotes from the last three Tech CEOs who engaged us to find them a new CFO: From a manufacturing company: “We need an operationally oriented CFO.” From a tech-enabled service company: “The CFO will run all the traditional finance and accounting functions, but we will also have them running our business operations unit where the majority of our headcount resides.” From a robotics company: “I need the CFO to run all the finance functions as well as Investor Relations, but just as important in need them to drive sales ops and sales support.”

Enterprise risk management under fire

CFOs are taking a leadership role in several areas not traditionally associated with finance and accounting including risk management, I/T and sales operations. One of these areas undergoing significant change is enterprise risk management. Risk is generally something that a CFO has had exclusively under their domain. However, as the definition of risk has changed, as within cyber security for example, the CFO must now take an active role with the CIO to mitigate this type of risk – and report to the Board about what actions are being taken to keep the company safe from data breaches, maintain customer information security, protect intellectual property and avoid ransomware threats.

Supply chain entanglements

In the recent past, the whole area of supply chain was an afterthought and humdrum, but not anymore. A purchasing manager would likely bring issues to the CFO’s office in very rare cases. However, the supply chain issues that hit very hard year two of COVID definitively affected the role of the CFO. They are now actively dealing with suppliers and securing supply certainty. When key components cannot be acquired, or when work from home negates the ability to produce goods, the CFO is going to be front and center. This may be just a blip in time, but the importance of securing supply chains has become a more prominent bullet item on the CFO’s checklist.

A recent real-life example of this shift shared with me by a CFO client: Pre-Covid, a chip the enterprise uses in their telecom equipment was generally less than a dollar. During the height of the chip shortage, the only place they could purchase these components was on a spot market for $1500 apiece. No purchasing manager is going to make that decision! The CFO and CEO purchased the parts. Certainly, the chip market has returned to some sense of normal, but the lesson has been learned.

Accounting becoming its own beast

Another change in the CFO’s organization is the constantly demanding and shifting world of accounting and compliance. We are seeing companies hire Chief Accounting Officers much earlier in their growth cycle than ever before. Why? Because the role of the CFO is becoming more operational; Boards and CEOs do not want their CFO getting bogged down in accounting minutia. This is coupled with the growing body of compliance issues (ESG for example). The CFO now needs a really strong accounting/compliance team earlier than ever. Rule of thumb used to be a company at $1B revenue would hire a CAO; now we are seeing these roles hired in pre-public ~$100MM companies.

Employee issues exacerbated

Another expansion in the CFO role is within Human Resources. Employee issues have been exacerbated by work at home, hybrid work environments and current tech layoffs. The efforts to keep employees content, engaged and motivated to fulfill the mission of the company can no longer fall to HR alone; these efforts need to start at the top with the CEO and CFO. The CFOs I work with are constantly on the front lines of employee retention, recruitment and overall job satisfaction as well as being a standard bearer for company culture.

These are a few examples of the expansion of the influence and responsibilities CFOs are taking on. All on top of the regular finance, accounting, treasury and tax roles traditionally under the CFO’s domain, which makes for recruiting and retaining these special professionals a veritable challenge in today’s highly unpredictable marketplace. Recruiting becomes more difficult because the list of must haves just keeps growing. Retaining these folks becomes a matter of balancing a strong team to support the newly added responsibilities as to not burn out a hard to replace executive.

As always, if you have comments about this, I welcome your input. Please comment on LinkedIn or register on my website. Cheers, Dave

About Arnold Partners, LLC

Arnold Partners is a retained executive search firm specializing in the placement of CFOs and Audit Chairs. Arnold Partners serves the technology industry on a national basis, both Venture Capital-backed and publicly traded companies. With 100% success rate in completing our CFO search assignments. In addition, our placed CFOs have well beyond the average tenure in their new roles. More information can be found at: