Table of Contents
01
Key findings
02
The 2025 Sponsor-CFO flight plan
03
Focus on the fundamentals
04
Prioritize performance
05
Be exit-ready
Survey Report 2025 | SaaS

The state of the PE sponsor & CFO relationship: SaaS companies

PE sponsors to their portfolio SaaS CFOs:

“You’re not meeting the value creation moment.”

The fact that nearly three-quarters of sponsors say their portfolio SaaS CFOs are underperforming is concerning, but not necessarily surprising, given a trend of declining industry revenues and significant valuation gaps between buyers and sellers. The reasons behind this perceived underperformance reflect the newfound importance of driving equity value in an environment absent expanding multiples.

72%
of sponsors
say their portfolio SaaS company CFOs aren’t meeting expectations
01

The fundamentals

SaaS CFOs are not meeting the “minimal safe altitude” for piloting the finance function at PE-backed companies (and they know it).

"PE-backed SaaS CFOs are not meeting sponsor expectations."
SPONSORS
CFOS
How are CFOs underperforming?

What they don’t seem to understand is why. SaaS CFOs believe they are perceived to be falling down on the “plus” parts of the position—the responsibilities that extend into a more strategic definition of the role. And while these “plus” parts may be lacking, they are not the CFOs’ fundamental flaw—that flaw is foundational.

How are CFOs underperforming?
Why it matters

In a SaaS market with lower (or at least, non-expanding) multiples, every dollar left on the table is a missed opportunity. As a result, sponsors want their SaaS CFOs to uncover pockets of previously “hidden” value. This means that processes which would have otherwise been considered “good enough” in a multiple arbitrage environment must now be scrutinized under a microscope for any potential efficiency gains or improvements. That’s why sponsors expect their SaaS CFOs to start with the basics. Sponsors know that there’s gold to be found from implementing delayed integrations, particularly as it relates to cleaning up a back-end infrastructure that’s the byproduct of roll-ups and is now composed of disparate systems and tools. Serial SaaS acquirers have been too busy biting to finish chewing, making any unrealized synergies from already-completed deals the ultimate reservoir for hidden value.

Why it matters

This “focus on the fundamentals” theme extends to what PE-backed SaaS CFOs should consider their finance function priorities for 2025. (These priorities also shine a light on some significant sponsor-CFO misalignment). SaaS CFOs believe they should be most focused on the nuances of the company’s capital structure and in the weeds on working capital improvement. And while those are all areas of importance, sponsors say that they really need their SaaS CFOs to unearth value creation using PE’s primary lever: reducing costs (particularly as it relates to contract spend). These sponsors know that the sector’s add-on “Frankensteining” has contributed to a decentralization of company economics which has created a muddied picture of revenue forecasting and unit economics. Sponsors want their SaaS CFOs to focus on creating a consolidated approach which will enable the “bottom-up” view of fixed and variable costs required to calculate SaaS unit economics. This will provide SaaS CFOs the visibility into per customer costs that they need to reduce costs and better establish the minimum profitable price of cloud contracts in order to optimize revenue.

What should SaaS CFOs be focused on in 2025?

It’s a substantial misalignment in priorities that’s no doubt contributing to unmet expectations. Given that misalignment, it should come as no surprise that roughly 7 in 10 CFOs continue to be concerned about job security.

73%
of SaaS CFOs
are concerned about job security
Expert Analysis

The role of the PE-backed CFO has always been a volatile one: the rate of turnover on the position has hovered around 75%-80%. Couple that stat with the fact that the average tenure of corporate CFOs is now on the downswing, and PE-backed CFOs have a right to be concerned about their job. In fact, one PE partner anecdotally noted that not a single one of his portfolio companies had retained their CFO post-deal.

But there’s reason for SaaS CFOs to be more optimistic about their job prospects. The demand for competent, experienced finance executives is outstripping supply. The tight job market is being exacerbated by delayed portfolio company exits, early retirements and cash-outs, a lack of younger accounting professionals to act as ready successors, and the growing availability of opportunities for CFOs beyond the finance function. So, while sponsors may continue to be frustrated by SaaS CFO performance, they may also soon be too hamstrung by a limited pool of competent replacements to do anything about it.

02

Performance

Here’s what everyone knows: Performance is critical when multiples stop expanding. However, sponsors believe SaaS CFOs aren’t as focused on the value creation horizon as they need to be.

Message from sponsors: Improve value creation

That’s a concerning, if perhaps overly generalized, stat that would benefit from more detailed investigation into where CFOs are falling short.

There are, broadly, five discrete lenses through which a SaaS CFO can drive value creation:

The financial lens

The financial lens identifies hidden opportunities to improve working capital efficiency by analyzing key revenue sources and assessing the performance of direct and indirect costs (including SG&A).

Sub-modules:

This lens takes a magnifying glass to financial factors including:

  • Revenue growth
  • Revenue leakage
  • Indirect/SG&A cost margins
  • Working capital (DSO, DPO, DIO)
  • CapEx ROI
  • Direct cost margins
The process lens

This lens identifies ways the portfolio company can streamline processes through simplification, standardization, and/or automation.

Sub-modules:

This lens takes a magnifying glass to processes including:

  • Lead to order
  • Procure to pay
  • Order to cash
  • Plan to deliver
  • Record to report
The operational lens

This lens identifies ways to drive operational performance improvement specific to the company’s unique industry and sector, such as improving service standards, streamlining the supply chain, enhancing product quality/reliability, revenue per user, and more.

Sub-modules:

This lens takes a magnifying glass to operational levers including:

  • Production efficiency and effectiveness (labor, inventory)
  • Vendor base (lead times, delivery)
  • Sourcing (materials, services)
  • SKU profitability
  • Sales and marketing effectiveness
The digital lens

This lens identifies ways to increase EBITDA through enterprise-wide digital enablement, process automation, and building/buying a fit-for-purpose technology stack.

Sub-modules:

This lens takes a magnifying glass to digital variables including:

  • Technology cost (licensing and support)
  • Enterprise application stack
  • Data quality and infrastructure
The organizational lens

This lens finds opportunities to drive efficiencies through simplifying and de-layering the company organizational model.

Sub-modules:

This lens takes a magnifying glass to organizational models including:

  • FTE efficiency
  • Span of control
  • Location strategy
  • Sourcing model (captive vs. third-party)

Going forward, sponsors would like their SaaS CFOs to focus on financial, operational, and digital levers.

On which value creation levers should SaaS CFOs focus?
Why it matters

The CFO-sponsor alignment around the need to focus on financial and operational levers isn’t surprising. Particularly in a SaaS environment, it’s critical for CFOs to build an appropriate RevOps function if they want to growth-hack the company. This function pulls both financial and operational levers by centralizing the finance, marketing, sales, and customer success processes, tools, and data-informed analytics required to optimize revenue and minimize leakage. RevOps is particularly critical in a SaaS environment given its unique customer unit economics. SaaS-based companies need a sophisticated level of cross-functional collaboration related to acquisition costs, pipeline, and finance activities (commercial/contract and cash management, customer profitability, renewal pricing) in order to drive topline growth and valuation. Given these nuanced interdependencies, SaaS companies demand a more centralized approach to the processes and data that support customer-related decisions. And herein lies the value creation treasure: too many companies ignore the centrality of the finance team to an effective RevOps function. The good news is that both SaaS CFOs and sponsors seem to recognize the need to build a finance-led function in which finance can either serve as the leader of a fully centralized approach, or as the main hub of a center-of-excellence framework.

Why it matters

But let’s be clear, identifying and pulling these independent value creation levers is about more than just individual portfolio company performance, as is the sponsor focus on the digital lens. It’s also about fundraising. In a market marked by limited returns to investors, funds are finding it more important than ever to communicate to LPs what value creation levers they will pull in order to accelerate returns.

When their SaaS CFOs are implementing emerging digital measures (like AI), it makes for not only improved performance, but a great, buzzword-heavy LP pitch.

95%
of sponsors say
say that it’s more important than ever before to communicate to LPs the value creation levers being pulled across their portfolio
03

Exit readiness

Waiting for the perfect time to sell a PE-owned SaaS company is over. LP patience for returns is wearing thin, and sponsors’ coffers are full of dry powder. What does that mean for the market? We are likely to soon emerge from a period of record-low deal activity into a buyer’s market with a logjam of assets in play—even if conditions aren’t ideal.

But while the market may dictate an early landing, SaaS CFOs have not necessarily located the exit door.

Message from sponsors: Get exit ready

SaaS CFOs have not effectively developed a more holistic sell-side readiness program to get their not-necessarily-primetime-ready company prepped for sale on an accelerated schedule. Holistic exit readiness would require that CFOs engage in activities beyond traditional sell-side programs. And that’s something SaaS CFOs have not been particularly effective at doing.

Why do sponsors say SaaS CFOs are not exit ready?

They’re too focused on revenue growth, not focused enough on acquisition integration.
They focus on value creation at the expense of sell-side readiness, leading to rushed preparation.
They have not rationalized tech platforms effectively, leaving disparate systems unoptimized.
They haven’t harmonized finance and operational metrics to craft an equity story.
They haven’t created a roadmap for future buyer value creation with in-play initiatives.
Why it matters

In order to meet sponsor expectations, SaaS CFOs will need to engage in a more unconventional and accelerated sell-side readiness program that involves:

  • Moving away from a linear process of value creation followed by exit preparedness, instead undertaking sell-side readiness and value creation in tandem.
  • Focusing on postponed integrations to find the not-yet-realized value from incomplete acquisition integrations.
  • Building a roadmap of future value that enables transaction conversations that are about the last mile under current ownership and, just as important, the first mile under new ownership.
Why it matters

The root cause of this exit-unreadiness is a mindset misalignment. Given the urgency for exit, and the need to take deal opportunities when they come, sponsors want their SaaS CFOs to focus on holistic exit readiness throughout their tenure. They want them to operate as if the company is always for sale. SaaS CFOs, on the other hand, have been trained to think in terms of 3-5 year holding periods. As such, they aren’t necessarily ready to think about the end at the beginning of their tenure.

Message from sponsors: Stay exit ready

There’s also a second area of misalignment around what exactly should serve as the CFO’s north star.

SaaS CFOs believe that their sponsors want them to focus on meeting year-end performance metrics above all else. But that’s not what sponsors want—they would prefer that their portfolio CFOs prioritize equity value, even if it means sacrificing yearly budget-meeting magic.

Message from sponsors: Prioritize equity value
EXPERT ANALYSIS

The role of the PE-backed CFO is more complex than ever. But at the end of the day, sponsors will measure SaaS CFO success by their ability to meet the target for exit as quickly as possible. That will often mean trading short-term profitability for long-term gains. And it will almost always mean getting comfortable spending some sizable money.

Good SaaS CFOs will act on equity-driving investments when prompted by their sponsor. Great SaaS CFOs will be proactive, identifying and championing those equity-driving initiatives they believe are critical (whether through organic growth or M&A), and pushing their sponsor to align with and prioritize them. While spending money might seem heretical to a SaaS CFO who lives by a cost control mantra, PE-backed SaaS CFOs must remember they’re a different breed. Their job is to make the investments that will have a high ROI and pay returns by exit (not year-end).

The BFD:
The 2025 sponsor-SaaS CFO flight plan

Private equity firms are in a very different market than they’ve been in during previous iterations of this survey—one in which they can no longer rely on ever-expanding multiples.

It’s therefore no surprise that sponsors are demanding their portfolio CFOs start fixating on performance. They want their SaaS CFOs to identify every hidden value creation opportunity. Of course, this includes the real needle-moving levers, like digitizing the function, leveraging predictive analytics, and marrying operational and financial data for more dynamic forecasting. But sponsors also know that to reach those needle-moving levers, their CFOs need to perfect the basics.

SaaS CFOs haven’t perfected these basics or met the moment.

They haven’t (yet) looked under every nook and cranny of every process and workflow to unlock the kind of hidden EBITDA that will drive valuation. It’s time for PE-backed SaaS CFOs to relentlessly pursue cost optimization and margin expansion. Doing so effectively will mean clawing back all the money left on the table from disparate tech systems and delayed integrations. It will mean thinking beyond macroeconomic drivers and using all the financial, operational, organizational, process-centric, and digital levers at their disposal to uncover each and every pocket of buried value.

Given these unmet expectations, we hope this survey report can serve as a 2025 “flight plan” for both PE sponsors and their SaaS CFOs. The plan encourages CFOs to use the early months of 2025 to proactively articulate their value creation strategies for unearthing hidden EBITDA, while tackling sell-side readiness initiatives in tandem with pulling performance enhancement levers.

For sponsors, the flight plan encourages them to give their portfolio CFOs permission—and perhaps even compensatory reinforcement—to make equity value their ultimate north star. And for both parties, it provides the insights they need to bridge misalignment, navigate turbulence, and build a lasting partnership to drive value creation.

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About Accordion

Accordion is a financial consulting firm uniquely focused on private equity. Rooted in data and technology, Accordion’s expertise lives at the intersection of sponsors and PE-backed CFOs. Our team helps drive value creation for clients, with services supporting the Office of the CFO across all stages of the investment lifecycle—including foundational accounting, strategic financial planning and analysis enhancement, CFO-led performance, transaction support,
and turnaround and restructuring solutions. All of Accordion’s services are powered by deep expertise in data and analytics, CFO-specific technology, and finance-led transformations.

Accordion is headquartered in New York with ten offices around the globe.

Survey Methodology

The State of the PE Sponsor & CFO Relationship survey was conducted by Accordion, in conjunction with Wakefield Research, among 200 total participants—including 100 private equity (PE) sponsors (senior executives) and 100 chief financial officers (CFOs) at private equity-backed companies with $50 million or more in annual revenue. The CFO and PE sponsor samples were collected be- tween November and December 2024, using an email invitation and an online survey.