The best CFO candidate is not always the one with the biggest CV. In this case, a £65m SaaS group ran a full external CFO search, interviewed four strong candidates, and ended up promoting the person who was already in the building.
This is an anonymised account of a real hiring process. The lesson is not that you should always promote from within. It is that boards often undervalue the person closest to the numbers, and it costs them time and money to relearn it.
What was the situation at the SaaS group?
The business was a private equity backed SaaS group turning over roughly £65m, built through a combination of organic growth and three bolt-on acquisitions. It had a founder chief executive, a supportive but demanding sponsor, and an ambition to reach a sale or refinancing inside three years.
The incumbent finance leader was a Financial Director who had joined pre-buyout. She had run the finance function competently for four years, integrated two of the three acquisitions, and kept the monthly numbers clean. She was well liked and trusted by the operational team.
The board's concern was straightforward. They were not sure she had done a CFO role before. They wanted someone who had sat across the table from investors, run a proper exit process, and could hold their own in a diligence room. So they opened a search.
Why did the board go external first?
This is common in PE-backed businesses, and the reasoning is understandable.
Boards want pattern recognition. A CFO who has been through two or three exits knows where the value leaks, how buyers probe the numbers, and how to manage a data room without the wheels coming off the day job. That experience is genuinely hard to fake.
There was also a quieter reason. Promoting the internal FD felt like a risk the board would personally own. Hiring a proven external CFO felt like a risk they could point to a process for. That instinct, to buy insurance rather than back judgement, drives more external searches than anyone admits.
So the brief was set, and four candidates reached final stages.
What happened with the four external candidates?
All four were credible on paper. All four had CFO titles and exit experience. Here is where each one fell down.
The first had led a larger business but through a different model, high touch enterprise software with long sales cycles. He kept reframing the group's product-led metrics into terms he understood, and missed the point of the growth engine.
The second interviewed superbly and understood SaaS metrics cold. But when pressed on the messy reality of three unintegrated acquisitions, she wanted a clean environment and a bigger team. The group could not offer either.
The third had strong exit credentials but had been out of a day-to-day finance seat for two years, working as a portfolio advisor. He was sharp on strategy and vague on control. The founder left that meeting unsure who would actually own the month end.
The fourth was the closest fit and received an offer. He declined it late, having used the process to lever a counteroffer from his current employer. That single event cost the board another six weeks.
Why did the internal FD win?
By the time the fourth candidate walked away, five months had passed. During those five months, the FD had quietly done three things that changed the board's mind.
She completed the integration of the third acquisition, on time, without drama. She rebuilt the group reporting pack so that recurring revenue, churn and net revenue retention were visible at board level for the first time. And she handled a mid-year lender query with a clarity that impressed the sponsor directly.
In other words, while the board was searching for someone to do the CFO job, she was doing it.
The gap the board worried about, exit experience, turned out to be manageable. They wrapped her in support. They brought in transaction advisers for the eventual process and paired her with an experienced non-executive who had run several sales. The judgement, control and institutional knowledge she already had could not have been bought in at any price inside the timeline.
What is the lesson for boards and PE operators?
Run the external search if you have genuine doubt. But run it with the internal candidate formally in the process, benchmarked against the same brief, and judged on the same criteria.
Too often the internal person is treated as a fallback rather than a candidate. That is unfair to them and blinds the board to what they already have.
The cost of getting this wrong is rarely a single bad hire. It is the months lost, the counteroffer games, and the disruption of onboarding an outsider into a business they do not yet understand. Sometimes the right answer is to develop and back the person in the seat, and to spend your budget on the support around them.
When you do need to go to market, do it with a partner who will tell you honestly whether your internal candidate stacks up. That is the conversation we have with clients at Harper May before a search begins, and it saves boards from expensive detours. If you are weighing a move yourself, our current finance leadership roles show what the market is really asking for.
Common questions
Should we always include the internal candidate in a CFO search?
Yes, if there is a plausible internal candidate, put them through the same process on the same criteria. It gives you a real benchmark and protects you from overvaluing an external CV.
How do you close the exit experience gap for a first-time CFO?
Surround them. Bring in transaction advisers, add a non-executive who has run sales, and start preparing the data room early. Experience can be borrowed for a process. Judgement and institutional knowledge cannot be borrowed at all.
When is an external CFO genuinely the right call?
When the internal person lacks the control discipline or the credibility with investors that the next phase demands, and cannot realistically build it in time. That is a capability gap, not a title gap.
