The Art of Fundraising in Private Equity: Strategies, Structuring, and Marketing

For a growing business, raising private equity is one of the most demanding financial processes it will ever go through — and the quality of its finance leadership does more than almost anything else to decide how well it goes. Much is written about PE fundraising from the investor’s side; this guide takes the view that matters to a business owner: what it actually takes, on the finance side, to prepare for a raise, survive diligence, and close at a strong valuation. At the centre of that is the CFO or finance director. Whether permanent or fractional, the finance leader is the person who makes a business genuinely investable — and their absence is one of the most common reasons a promising raise disappoints.

Why finance leadership decides how a raise goes

Having placed CFOs and finance directors into businesses going through private-equity processes for two decades, I’d point to one thing founders consistently underestimate: the intensity of PE diligence, and how much of the outcome is determined before the fund ever formally engages. Founders often expect a raise to look like the commercial negotiations they already know — heavy at the deal points, then quick to close. PE diligence is qualitatively different. A serious fund will want deep financial analysis, evidence of margin quality, an honest read on customer concentration, and confidence in the management team’s grip on the numbers. A business that can’t supply that quickly and credibly loses momentum, and lost momentum in a raise usually means a lower valuation.

The single most valuable lesson I can offer is that the preparation phase matters more than the negotiation phase. The businesses that close well are almost always the ones that did the finance work *before* the process started — rebuilding management accounts to a standard an investor will trust, assembling a proper data room, and getting on top of the numbers a fund will probe. That preparation is exactly what a strong finance leader delivers, and it is why so many businesses bring in a CFO or FD, often fractional, specifically ahead of a raise. Without that finance leadership in place, diligence becomes painful and the valuation suffers; with it, the business negotiates from a position of genuine strength.

What the CFO does before the process starts

The most important work happens before a fund is even in the room, and it is finance-led. Preparing a business to raise means getting several things to investor standard in advance. The management accounts need to be reliable, timely and defensible — a fund will lose confidence fast if the numbers shift or can’t be explained. The data room has to be assembled properly: historical monthly accounts, a clear view of revenue and margin, customer and supplier analysis, and the supporting detail a diligence team will ask for. And the financial story needs to be coherent — the CFO’s job is to make sure the numbers tell a clear, honest and compelling story about the business’s performance and prospects. This preparation typically takes months, not weeks, which is precisely why it can’t be improvised once a process is live.

What the CFO does during diligence

Once a process starts, the finance leader carries it. PE diligence typically runs several distinct workstreams — commercial, financial and legal — often in parallel, and the financial workstream falls squarely on the CFO. That means fielding detailed questions on the numbers, defending the margin and the forecasts under scrutiny, and keeping the data room current as requests come in. Just as importantly, the CFO protects the management team from the sheer distraction of the process: diligence consumes an enormous amount of senior time, and a business still has to trade well while it happens. A capable finance leader absorbs much of that load, keeping the process moving while the founders keep running the business — because a dip in trading performance during diligence is both common and damaging to the outcome.

What the CFO does at close and beyond

As a deal moves to completion, the finance leader is central to the final negotiation — on valuation, on deal structure, and on any earn-out or deferred consideration, where the financial detail directly affects what the founders ultimately receive. A CFO who understands how these mechanisms work protects the business’s interests in ways a founder negotiating alone often can’t. And the CFO’s role doesn’t end at close: PE-backed businesses face a step-change in reporting expectations, and the finance leadership that got the business through the raise is usually what builds the investor-grade reporting the new owners will expect from day one. This is why so many funds now expect a portfolio business to have serious finance leadership in place as a condition of investing, not merely a nice-to-have.

Signs a business isn’t yet ready to raise

Part of a finance leader’s value before a raise is an honest assessment of whether the business is genuinely ready to start — because launching a process before the finance function can support it is one of the most expensive mistakes a growing business makes. A few signs point to work still needed. If the management accounts take weeks to produce or the founders don’t fully trust them, that has to be fixed first, because every diligence conversation depends on reliable numbers. If the business can’t readily explain its gross margin, its customer concentration, or the durability of its revenue, a fund will find those gaps and price them in. If there is no coherent forward view — a forecast an investor can interrogate — the business isn’t yet telling the story a raise requires. And if the founders are the only people who hold the financial picture in their heads, the business lacks the management depth a fund wants to see. None of these is fatal, but each is a reason to prepare before starting rather than to discover the problem mid-process, when it costs far more to fix.

Timing the finance appointment

Given how much of the outcome is set during preparation, the timing of the finance appointment matters as much as the appointment itself. Bringing in a CFO or FD at the point the process starts is usually too late to do the preparation properly — the value comes from having them in place months ahead, so the management accounts can be rebuilt, the data room assembled and the financial story sharpened before any fund engages. For businesses that don’t yet warrant a full-time finance leader, this is precisely where a fractional or interim appointment fits: senior fundraising experience brought in for the preparation and the process, then scaled to whatever the business needs afterwards. The cost of that appointment is almost always modest against the difference it makes to the valuation and the smoothness of the raise — which is why experienced founders and investors alike treat strong finance leadership as a prerequisite for a serious process, not an afterthought.

Getting the finance leadership right before you raise

The through-line is simple: a business raising private equity is only as ready as its finance function, and the finance leader is the person who makes it ready. For many growing businesses, this doesn’t mean a full-time CFO from the outset — a fractional or interim CFO with fundraising experience can bring exactly the right capability for exactly the period it’s needed, preparing the business, carrying the diligence, and building the post-deal reporting, then scaling back or converting to a permanent role as the business grows. What matters is having that capability in place early enough to do the preparation properly. ICAEW’s corporate finance guidance and bodies such as the BVCA (now UK Private Capital) set out the standards these processes demand — and meeting them reliably is what experienced finance leadership provides. Get that right, and a business goes into its raise able to command a strong valuation from a position of genuine strength. That is exactly where FD Capital helps: placing the CFOs and finance directors who make growing UK businesses genuinely investable.

Related reading and services

Adrian Lawrence

Adrian Lawrence FCA is the founder of FD Capital and a Fellow of the Institute of Chartered Accountants in England and Wales (ICAEW). He holds a BSc from Queen Mary College, University of London, and has over 25 years of experience as a Chartered Accountant and finance leader working with private, PE-backed and owner-managed businesses across the UK. He founded FD Capital to connect growing businesses with the Finance Directors and CFOs they need to scale — and personally interviews candidates for senior finance appointments.