BOTTOM LINE UPFRONT
Private equity firms want their portfolio CFOs to operate in a constant state of exit readiness—but most aren’t there yet. According to Accordion’s report, Exit Readiness in Private Equity, 97% of sponsors expect “always-ready” CFOs, while only 20% maintain that posture. The gap—driven by bandwidth constraints, fragmented data, and unclear expectations—can cut valuations by multiple turns. The path forward lies in AI-enabled finance, where CFOs leverage automation, forecasting, and data visualization to balance daily operations with long-term value creation and deliver smoother, higher-value exits.
Private equity sponsors are eyeing their financial future in every deal, looking for companies with value that they can build and bolster, then sell off for profit once they get there. And a report from private equity consulting firm Accordion exclusively shared with Forbes says that 97% of private equity firms expect the CFOs of their portfolio companies to always be ready for that next deal. But only 20% of CFOs actually are prepared for an exit all of the time—61% say they shift into “exit mode” when there’s a window for a sale.
Nearly half of CFOs say the main reason they aren’t always exit-ready is because they don’t have the bandwidth for both this sort of readiness and day-to-day operations. Other major reasons cited included fragmented data systems, a lack of clarity about what the PE sponsor expects and competing priorities across operational initiatives. And while these are all valid reasons, the gap between the readiness sponsors want and CFOs face impacts dealmaking and can lower exit values.
Private equity sponsors often want companies to assemble a wealth of information, with four out of five wanting portfolio companies to begin preparation 12 to 24 months before the deal. Accordion likened this to training for a marathon. The vast majority of sponsors want their portfolio companies to have the story of their value on full display, creating new value, having integrated systems connecting operations, finance and strategy, and being able to tell a credible equity story through growth initiatives, operational excellence and market positioning.
CFOs, on the other hand, generally rely on three to six months of deal prep, which Accordion likened to training for a 5K. More than six in 10 said they’re scrambling to pull together KPIs, financial models and operational narratives, and nearly half sometimes put off strategic initiatives until the exit window is imminent.
So how can CFOs and private equity sponsors close this gap? Accordion recommends that CFOs align their exit priorities with their sponsors before dealmaking begins. It’s not easy—there are always day-to-day operational priorities—but it makes deals move more smoothly. Using AI to enhance forecasting, reporting, scenario modeling and data visualization can make it easier to maintain exit readiness, but it can also enhance a company’s value, Accordion found. “CFOs who prioritize AI not only improve internal decision-making but also strengthen the company’s credibility and multiples at exit,” the report states.
A new study from enterprise financial management software provider OneStream found that most CFOs are still navigating the path to AI fully scale in their departments. Just a third have successfully deployed AI at scale, the study found, but most are moving toward a more cross-functional and strategic use of the technology. I talked to OneStream CEO Tom Shea about the report, and an excerpt from our conversation appears later in this newsletter.