Hey {{first_name|there}},
First of all, thank you for all your messages.
When I announced that I will take a step back to come back stronger, my e-mail was flooded.
I appreciate this community and I don’t want to let you down.
So let’s continue the adventure.
Most founders only think about their finance team when they need:
a forecast,
a budget, or
a deck for investors.
But here’s the irony is that same finance team could be costing them millions at exit without even realizing it.
If you’re able to understand this and explain it clearly to the CEO, your value multiplies.
They will see you as a strategic asset to the business instead of a bean counter.
Let me explain.
🛠 THE CFO EFFECT PLAYBOOK
Step One: When EBITDA really matters
EBITDA only truly matters at three moments in your company’s life:
When you buy a company.
When you sell a company.
When you raise capital or take on debt.
That’s it.
For everything else, EBITDA is just another metric.
But when those moments come (when the stakes are high) your EBITDA becomes the single number that defines your company’s value.
The problem is that most founders see EBITDA as the result of sales and operations.
They think it’s purely driven by revenue and gross margin.
And yes, that’s partly true.
You can’t fake profitability.
But what most people forget is this:
Your finance team directly shapes the multiple applied to that EBITDA.
And that’s where millions are made; or lost.
Step Two: Value Creation vs. Value Capture
A great CFO drives both value creation and value capture.
Most companies only focus on one.
Value creation is the sexy part: the growth, the strategy, the expansion.
It’s the CFO who helps identify new markets, untapped opportunities, pricing leverage; all the levers that push the top line.
Value capture is the less glamorous, but equally powerful side: the optimization of capital, resources, and systems to maximize what you keep.
It’s not just cost-cutting.
It’s:
Smarter capital allocation.
Optimized working capital.
Tax optimization.
Better financing terms.
Faster cash conversion.
A finance leader who can master both sides (creation and capture) becomes a force multiplier for enterprise value.
Step Three: Why data quality is worth millions
When a buyer or investor looks at your company, they don’t just buy your numbers.
They buy your credibility.
If your data is inconsistent, hard to trace, or full of manual workarounds, you lose trust, and trust kills multiples.
Clean, reliable, auditable data gives confidence.
It shows you have discipline, control, and repeatability.
These are all the things investors and acquirers pay premiums for.
When your finance systems are tight, you can walk into any diligence meeting and say:
“Here’s the story our data tells: by product, by channel, by customer.”
Storytelling is way more powerful than reporting.
Yet it’s one of the most undervalued skills in finance.
Step Four: The story behind the numbers
At exit, numbers alone don’t sell companies, but stories do.
One thing to keep in mind is that the buyer is not paying for your past.
They’re paying for the future cashflows they can generate.
They’re paying for the potential.
They want to believe in what the company can become under their ownership.
A strong finance team crafts that story with precision:
They can explain the drivers behind every metric.
They can show consistency over time.
They can connect operational metrics to financial outcomes.
They can project future growth with credibility because they’ve done it before.
When your data, systems, and story align, you increase your EBITDA and your multiple.
And that’s where the real money is made.
Step Five: The hidden levers of an exit
Now let’s talk mechanics.
When you sell a company, the buyer doesn’t just pay for your enterprise value.
There are adjustments and they can swing the deal by millions.
Three key ones:
1. Working Capital.
Buyers expect a “normalized” level of working capital to keep operations running.
Anything below that gets deducted from the price.
Anything above it will be added to the price.
If your finance and operation team manages working capital poorly, you could be giving away 5–10% of the deal value.
2. Taxes.
Pre-exit tax planning can change your after-tax proceeds by 10–20%.
That’s value capture at its best.
Having a CFO who anticipates that (and sets up the right structure early) makes a massive difference.
3. Adjustments and Add-Backs.
A strong finance team knows how to document one-time costs, normalize EBITDA, and present the cleanest possible view of profitability.
EBITDA Adjustments are part art and part science.
Adjust for things that are not recurring in the business.
Understand the mistakes that have been made by other departments and explain why those will not happen in the future.
Everything should be documented and justified properly.
Don’t be overzealous.
If your adjustments are not grounded in logic, it will discredit every other adjustment you made.
And be ready to have a debate on every number you presented.
The best way to defend your numbers in negotiations is not to have to defend your numbers.
Step Six: Systems and structure
Buyers are not just buying cash flows.
They are buying sustainable and reliable cash flows.
They want a turnkey company.
They love when the finance engine is already humming where the data is clean, the processes are disciplined, and the team is accountable.
A well-structured finance function signals that the company can scale without chaos.
That peace of mind translates directly into higher valuation multiples.
But let’s be honest, it’s not just about finance.
Buyers will need to understand how money is made.
They want to know you have clear systems (recipes) to generate cash flows and this is not a one-off magic trick.
This can add two sometimes three extra turns of EBITDA.
At $10M EBITDA, that’s $20–30M of additional enterprise value created not by growth, but by discipline.
Step Seven: What founders miss, and CFOs need to teach
Most founders underestimate the value of a great finance function.
They see finance as a cost center not a value driver.
But as CFOs, VPs of Finance, and finance leaders, this is our responsibility to change.
You need to educate your CEO and shareholders that:
Finance is not just bookkeeping; it’s value engineering.
The right systems and people can increase exit value by 20–30%.
Tax and capital structure planning can add another 10–20% to your net proceeds.
The clarity of your data defines the quality of your story and your multiple.
This is how you earn your seat at the table.
This is how you justify your salary and salary increase.
And this is how you build companies that sell for more; not because they grow faster, but because they run smarter.
The Practical Takeaway
EBITDA matters at only three moments: buy, sell, or fundraise.
Finance drives multiples. Data quality, systems, and story = higher valuation.
Value creation = growth and strategy.
Value capture = efficiency and capital discipline.
Working capital and taxes can swing deal value by 10–30%.
Buyers pay for credibility. Clean data, repeatability, and story consistency drive trust.
Finance is leverage. A great finance team compounds value.
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“ Stop reporting the past, and start architecting the future.”
Disclaimer:
This content is for informational and educational purposes only and should not be construed as financial, legal, or professional advice. Always consult with a qualified advisor before making any business or financial decisions. The author and publisher disclaim any liability for actions taken based on this content.
Talk soon,
