Fractional CFO for PE/VC-backed companies

Fractional CFO for PE/VC-backed Companies

Private equity and venture capital backing can accelerate growth, unlock strategic opportunities, and transform a business’s trajectory. However, PE and VC investment also brings heightened expectations around financial discipline, governance, reporting, and performance.

For many PE- and VC-backed businesses, the challenge is balancing rapid growth with rigorous financial control — without committing prematurely to the cost and complexity of a full-time CFO.

A Fractional CFO for PE and VC-backed companies provides senior financial leadership on a flexible basis, helping management teams and investors achieve their objectives while maintaining control, transparency, and value creation.

At FD Capital, we support PE- and VC-backed businesses across the UK with experienced fractional CFOs who understand investor expectations, board dynamics, and the realities of scaling under private capital ownership.

Why PE and VC-Backed Companies Need CFO-Level Support

Once a business takes on institutional investment, the financial stakes increase significantly. Reporting requirements become more demanding, decision-making is scrutinised, and performance is measured against ambitious growth and return targets.

Investors expect:

• Accurate, timely, and insightful financial reporting

• Clear visibility over cash, profitability, and performance drivers

• Strong governance and internal controls

• Robust forecasting and scenario planning

• A credible finance leader who can partner with management and the board

In many cases, the existing finance function — often built for an earlier stage of the business — is not designed to meet these expectations. A fractional CFO fills this gap quickly and cost-effectively.

What Is a Fractional CFO for PE/VC-Backed Businesses?

A fractional CFO is a senior finance professional who provides CFO-level leadership on a part-time or interim basis. Unlike consultants, fractional CFOs take ownership of outcomes, embedding themselves within the business and working closely with management and investors.

For PE- and VC-backed companies, a fractional CFO typically:

• Acts as the primary financial interface with investors

• Leads financial strategy and value creation initiatives

• Oversees reporting, controls, and compliance

• Supports boards, investment committees, and lenders

• Prepares the business for future funding rounds or exit

This approach delivers immediate expertise without the long-term commitment of a permanent CFO hire.

Common Challenges in PE and VC-Backed Companies

PE- and VC-backed businesses face a distinct set of financial and operational challenges, particularly in the first 12–24 months post-investment.

Scaling at Pace

Investment capital is deployed to accelerate growth — often rapidly. This can strain cash flow, systems, and controls if not carefully managed.

Increased Reporting Requirements

Monthly board packs, KPI dashboards, and investor updates become mandatory rather than optional.

Margin and Profitability Pressure

As businesses scale, investors focus on sustainable margins, operating leverage, and the path to profitability.

Governance and Controls

Institutional investors expect strong financial controls, audit readiness, and risk management.

Exit Planning

From day one, PE and VC investors are thinking about exit routes — trade sale, secondary buyout, or IPO — and expect financial leadership aligned with that objective.

A fractional CFO addresses these challenges with experience and structure.

The Role of a Fractional CFO in PE-Backed Businesses

Private equity ownership is typically hands-on, with a strong emphasis on value creation within a defined investment horizon.

A fractional CFO in a PE-backed business focuses on:

Value Creation Planning

• Identifying key value drivers

• Supporting operational improvements

• Enhancing margin and cash generation

• Aligning financial strategy with the PE investment thesis

Financial Reporting to PE Standards

• Monthly management accounts

• Board and investment committee packs

• KPI tracking aligned to PE metrics

• Clear variance analysis and commentary

Cash Flow and Leverage Management

• Managing debt facilities and covenants

• Optimising working capital

• Ensuring disciplined capital allocation

M&A and Buy-and-Build Support

Many PE strategies involve acquisitions. A fractional CFO supports:

• Financial due diligence

• Deal modelling

• Integration planning and execution

The Role of a Fractional CFO in VC-Backed Businesses

VC-backed companies typically prioritise growth, innovation, and market share, often at the expense of short-term profitability. However, financial discipline remains critical.

A fractional CFO for a VC-backed business supports:

Growth-Focused Financial Strategy

• Aligning spend with growth priorities

• Managing burn rate and runway

• Ensuring capital efficiency

Fundraising and Investor Communication

• Supporting follow-on funding rounds

• Preparing investor updates and board materials

• Managing VC expectations around metrics and milestones

Scaling the Finance Function

• Implementing scalable systems and processes

• Hiring and developing finance teams

• Establishing reporting discipline

Preparing for the Next Stage

Whether the goal is Series B, Series C, or exit, a fractional CFO ensures financial readiness.

Financial Reporting and Governance for PE/VC-Backed Companies

Institutional investors expect a step-change in financial reporting once they invest.

A fractional CFO ensures:

High-Quality Management Information

• Timely monthly close

• Accurate balance sheets

• Meaningful P&L analysis

• Cash flow visibility

KPI and Performance Reporting

• Metrics aligned to investor priorities

• Consistent definitions and tracking

• Clear narrative explaining performance

Strong Financial Controls

• Segregation of duties

• Robust approval processes

• Audit-ready documentation

This reduces risk and builds investor confidence.

Cash Flow, Burn Rate and Capital Discipline

Cash management is a critical focus for both PE and VC investors.

A fractional CFO helps businesses:

• Understand true cash generation

• Control burn rate

• Extend runway without damaging growth

• Allocate capital effectively

This ensures funding is used to create long-term value rather than short-term inefficiencies.

Board and Investor Relationship Support

Managing relationships with investors is a core CFO responsibility.

A fractional CFO:

• Prepares and presents board packs

• Provides clear, credible financial insight

• Anticipates investor concerns

• Supports constructive decision-making

This allows founders and CEOs to focus on strategy and execution, confident that financial communication is handled professionally.

Preparing for Exit in PE and VC-Backed Businesses

Exit readiness starts well before a transaction process begins.

A fractional CFO supports:

• Financial housekeeping and clean-up

• Normalisation of earnings

• Preparation of exit-ready financials

• Data room preparation

• Vendor due diligence

This improves transaction speed, valuation, and certainty.

Fractional CFO vs Full-Time CFO for PE/VC-Backed Companies

Many boards debate whether to appoint a permanent CFO post-investment.

Fractional CFO Advantages

• Immediate access to experienced leadership

• Lower cost and flexibility

• Ability to scale involvement as needed

• Ideal during transition or transformation periods

Full-Time CFO Considerations

• Higher fixed cost

• Longer recruitment process

• Greater commitment required

For many PE- and VC-backed businesses, a fractional CFO provides the right balance, particularly in the early post-investment phase.

Why FD Capital?

FD Capital specialises in providing fractional CFO services to PE- and VC-backed companies across a range of sectors, including technology, SaaS, professional services, and high-growth SMEs.

Our CFOs bring:

• Deep experience working with private equity and venture capital

• Strong commercial and strategic insight

• Hands-on leadership style

• Clear communication with boards and investors

We understand the pressures of institutional ownership and help businesses navigate them successfully.

How We Work With PE and VC-Backed Clients

Our approach is practical, flexible, and outcome-focused:

1. Initial Review
   Understand the business, investment thesis, and priorities

2. Finance Function Assessment
   Identify gaps in reporting, controls, and capability

3. CFO-Level Leadership
   Deliver strategic and operational finance support

4. Ongoing Partnership
   Support growth, governance, and exit planning

Engagements can be short-term, long-term, or project-based.

Frequently Asked Questions

Do PE and VC investors support fractional CFOs?

Yes. Many investors actively recommend fractional CFOs, particularly in the early stages post-investment.

Can a fractional CFO work with existing finance teams?

Absolutely. Fractional CFOs lead and develop in-house teams rather than replace them.

Is this suitable for international investors?

Yes. We regularly work with overseas PE and VC firms investing in UK businesses.

How quickly can a fractional CFO start?

Typically within weeks, providing immediate impact.

Speak to a Fractional CFO for PE or VC-Backed Companies

If your business is PE- or VC-backed and needs stronger financial leadership without the commitment of a full-time CFO, FD Capital can help.

Our experienced fractional CFOs support growth, governance, and value creation — aligned with investor expectations and management objectives.

Contact FD Capital today to discuss how a fractional CFO can support your PE or VC-backed business.