You’re looking to bring on a new CFO as you prepare to exit within the next two years. What do you do when the seasoned CFOs you want are either comfortable in their current positions or have equity on the table?
Hire a “step-up” candidate: someone who may not be a CFO now, but can grow into the role and steer your company toward its exit if they have the right team around them.
One company in particular came to us seeking a CFO as they pivoted to a new category ahead of an exit. To complicate matters, they are based in Michigan and wanted a CFO who would be onsite at least a few days per week. The market for seasoned CFO candidates in the area or willing to relocate was thin. A step-up candidate turned out to be just what they needed.
Meet Demi
Demi Hutchinson is a Managing Director at PierceGray and led the search mentioned above.
Demi leads our Finance practice, where she recruits CFOs and CEOs for private equity firms and companies undergoing significant transformation, with additional depth in operations and field services roles. She works closely with clients to read market dynamics and determine what kind of leader a given situation calls for.
When a Search Calls For a Step-Up Candidate
Most clients come to Demi seeking an experienced CFO with multiple reps in private equity transactions and successful exits.
"The problem with recruiting an experienced, sitting CFO, of course, is they've got all the right experience, but they're all tied up in deals with equity that they're not going to be willing to walk away from. When everyone else in the market is also trying to recruit that same person, it creates a tight market for the ideal bullseye profile."
Demi encourages clients to expand their search if constraints tighten or complicate the market. This includes factors like:
- You have a short exit time frame (two years or less)
- You are in a thin local market or have an onsite requirement
- You have room to hire a strong controller or FP&A lead underneath
A Step-Up Candidate Isn’t a Step Down
Hiring a step-up candidate for CFO doesn’t mean you’re making a sacrifice in your exit strategy.
In fact, it’s becoming much more common. In the first half of 2026, 64% of new CFOs globally were first-timers, compared to 60% during the same period last year.
When a client is looking for a CFO to steer their exit, we start with an honest assessment of the market and realistic search timelines. Is seeking out an alternative candidate to step up into the role settling?
“There are times that a client can see it as settling for a candidate, but in my experience it’s not the case. When clients meet step-up candidates, they often find they are hungrier and have more to prove, since it's their first time officially in the role. They’re often more motivated as well, because they don’t have a previous exit to fall back on. And so I think the clients find that those step-ups, in some cases, are actually outshining the experienced CFOs, and ultimately see better outcomes in the business because of that.”
Whether we’re seeking an experienced CFO or a step-up candidate, we’re looking for the same capabilities. A step-up candidate still needs to show that they can translate data into actionable business insights that push the organization forward. They also need to serve as the CEO’s right hand, bring new ideas to the table, and respectfully push back in a data-driven way when they disagree.
The Types of Alternate CFO Candidates Ready to Step Up Into The Role
The archetypes we look for are often people who have worked closely with or under a CFO and would be natural candidates for the role should an opportunity arise. They have often:
- Implemented new product lines
- Worked closely with a CFO through a sale or served as an interim CFO
- Expanded a company or business unit into new geographies
And they typically hold one of the following titles:
- VP of FP&A: This is one of the most common roles we source step-up candidates from. They usually have a strong financial planning background, and the CFO role is a natural next step.
- Business Unit CFO: Another natural fit; these candidates already operate in a PE environment, but work on a smaller scale within the company.
- VP of Accounting: A less common but still viable source; these candidates have a strong financial background.
Regardless of their current title and background, the strongest step-up candidates are ready to jump into the CFO role, and we prioritize those we think can easily transition into a leadership role.
How to Support Someone Stepping Up
Every archetype above brings solid financial fundamentals. Expect growing pains in two areas:
- Banking and lender relationships: This is the biggest gap, especially when the mandate is to sell within the next couple of years.
- Strategic leadership: The CFO role puts them in the driver’s seat to not only know the numbers, but also forecast and make recommendations based on them.
The banking and lender gap usually shows up in their ability to manage an investment bank relationship, defend the numbers to multiple audiences, and bring credibility to the room.
That may sound like a large gap, but for PE-backed firms, the sponsor usually owns the bank relationship while the CFO focuses more on strategy and execution. Chances are, the firm’s finance team is having similar conversations across its portfolio companies, so it can lend a hand where needed.
For both gaps, the answer usually isn’t extensive training. It’s the team you build around them.
“To support step-up candidates, we have helped hire underneath our placements. For example, a great controller or a head of FP&A to support the person stepping up into the role. These candidates don’t require as much training as they need a great team that can work under and around them.”
A Step-Up Candidate Could Be the Right Step Forward for Your Company
So can a step-up candidate step up to the challenge in your company?
We left off with Demi’s client facing the challenge of finding an experienced CFO who could position the company for a sale while being either based in Michigan or willing to relocate.
Demi worked with the client to broaden their search to include step-up candidates and found one. He had never been a full-time CFO before, but he checked many of the boxes we look for – including being local to the area– so the client was willing to interview and ultimately hire him.
Nine months later, the candidate, sponsor, and hiring CEO are all pleased with the results.
“From what I’ve heard from the CEO and PE firm, he’s one of the best CFO hires they've made. He's loving it, too. It’s exactly the challenge he was looking for, and he feels that they're on pace to hit the transaction timeline that they had talked through when they sold it to him.”
For a step-up candidate, the CFO role is a natural next step in their career. For the company, it could be a great way to find someone primed for the role and ready for a new challenge.
If you are looking to hire a CFO, schedule a meeting with our team. We’ll discuss the role with you in depth and advise on the best type of candidate for your company.
