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CFO Talent Market Grows Tighter: What Sponsors Need To Know
by Eric Walczykowski
Private equity backed software companies are entering a new cycle. Platforms are returning, exits are reopening, and demand for proven financial leadership is rising at the same time supply is tightening.
In a recent Tailored Talent conversation I sat down with Katelyn Quaresma, Partner and Head of Bespoke’s Finance Practice, to understand what is actually happening in the CFO and VP Finance market and what sponsors should expect in the year ahead.
Watch the full conversation with Katelyn Quaresma on Tailored Talent.
Constricted Market for Proven CFOs
During the recent private equity sector downturn, many companies replaced their CFOs to reset their financial leadership as a step toward execution on value creation plans.
Now that the market is recovering, that early replacement cycle has resulted in fewer proven CFOs being willing or able to move.
"We're definitely seeing some constriction in the market," Katelyn said. "And we've actually seen quite a bit of uptick on the Number 2 front (VPs and SVPs)."
As Katelyn explains it, many CFOs are locked into assets with exits expected in the next twelve to eighteen months. Those who were likely to leave underperforming situations already did so in 2022 and 2023.
Katelyn added that the end result is one of the tightest supply environments for experienced CFOs in recent years.
Two Forces Driving Demand
The demand side is being driven by two distinct forces that Katelyn detailed for me:
- Sponsors leveling up ahead of an exit
- New platforms requiring CFO leadership from day one
Exit readiness has become more rigorous, Katelyn added. Scorecards now heavily prioritize prior private equity exit experience, the ability to carry execution risk for the CEO, and the capacity to operate cross functionally at a high level. For new platforms, sponsors increasingly want CFOs who bring a CFOO profile, combining operational range with financial stewardship.
The Rise of Step Up Candidates
With proven CFO supply limited, sponsors are turning to step up candidates in ways not seen since the last major upcycle. Katelyn outlined two primary categories:
- VP Finance leaders who saw scale at premier software businesses
- First time CFOs who have operated at smaller scale and previously served as strong number twos
Both profiles offer relevant experience and a credible path to success, especially when paired with clear executive development and strong CEO partnership. This trend is showing up across both middle market and upper middle market assets.
Number Two Roles Are Surging
While CFO mobility remains constrained, Katelyn said, demand for VP Finance and deputy CFO roles is accelerating. These searches are up more than fifty percent year over year, driven by two factors:
In many cases, these number two roles represent the most direct future pathway to the CFO seat within private equity backed software companies.
Geo Expectations Are Returning
Flexibility remains, but the pendulum has moved meaningfully back toward pre pandemic expectations. Many sponsors now prefer CFOs who can be on the ground, walk the halls, and build deeper relationships with leadership teams. Location ties such as family connections, college history, or prior roles matter more than they did two years ago.
This shift makes comprehensive candidate mapping essential, as Katelyn described. Bespoke’s Executive Index continues to play a critical role by triangulating candidate locations, past affiliations, and relevant ties.
Compensation Is Becoming More Sophisticated
While base and bonus compensation remain competitive, CFOs are scrutinizing equity more rigorously. Rather than chasing inflated packages that rarely pay out, many candidates are focused on:
- Realistic return multiples
- Likelihood of equity outcomes
- The underlying quality of the asset and sponsor involvement
Discussions are more grounded than they were in 2019 and 2020. CFOs want clarity, not promises that will not materialize.
Navigating the New Cycle
Katelyn explained that the themes are clear: Demand is rising, supply is limited, CFO scorecards are evolving, and step up pathways are becoming more important than ever. In this environment, success depends on full market visibility, the ability to identify both proven and emerging leaders, and a deep understanding of the nuances within software and SaaS.
These are the dynamics shaping the next cycle of financial leadership across private equity.
To learn more about finance leadership trends, subscribe to the Tailored Talent podcast or connect with the finance executive search team at Bespoke Partners.
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