Today's issue is brought to you by Abacum.
If you're a finance leader inside a PE-backed portfolio company, you already know the drill: tighter timelines, higher reporting expectations, and a board that wants to see the value creation plan before the ink on the deal dries.
Abacum just published Private Equity in the AI Age - a field guide written for CFOs navigating post-deal pressure, roll-up complexity, and the 100-day sprint. It covers how AI-enabled businesses are commanding higher multiples, what PE firms now expect from PortCo finance teams, and how to structure capital, debt, and treasury decisions amid accelerating deal velocity. This isn't a trend report. It's the playbook I wish I'd had.
Fun fact - a cow has better aerodynamics than a Jeep Wrangler.
Seriously - scientists ran a test.
“Some airflow experiments have suggested that a cow can be more aerodynamic than a Jeep Wrangler in specific wind tunnel tests. Thanks to its rounded body and gentle curves, air moves more smoothly around a cow than around the Jeep’s flat, boxy front. As a result, the cow showed a lower drag coefficient, meaning it faced less resistance from the air.”
Yet, shockingly, Jeep sells a lot of vehicles. And not many people use cows as a mode of transportation.
As finance leaders, there’s a constant urge to over optimize our organizations. A PE backed CFO hath never met a rock they cannot squeeze blood from. You just need to squeeze harder, flip over the cushions, and ride that thing until it screams.
But depending on the metrics you look at, like wind drag on a jeep, and the benchmarks you compare them to, like a cow, you can fool yourself into thinking your org isn’t close to where it needs to be efficiency wise.
But what often gets lost in these discussions is the potential revenue you’re missing out on.
I was speaking to the CFO of Fanatics, Glenn Shiffman. He explained:
“I will always focus on the infinite, which is revenue, versus the finite, which is expenses.
I can’t cut my way to revenue growth.
I will always push revenue growth which is infinite.
Every CFO I know loves to cut costs and drive efficiency. And we will, and we do. But I’d encourage you to focus on the infinite more than the finite.
Common Examples of Over Optimization
Here are some common areas I see organizations over optimize for, at the benefit of their OPEX but to the chagrin of their (potential) revenue:
BDRs: The people who source and vet the deals for AEs.
They are the cheapest role in the company, and they are frequently promoted into seller roles
The worst thing you can do for your sales org is promote your way into oblivion, leaving holes behind that set up the newly promoted people for failure
Tangent: This also includes promoting your best AEs into people leaders and leaving a quota sized gap you could drive a Jeep through
Over hire your BDRs. About 1/3 of them don’t work out anyway. And the other 1/3 get promoted.
This is not the place to save money, especially when a portion of their comp is performance based.
Billing: The people who collect the money.
One of the least talked about reasons for churn is billing issues
Billing is a part of how your customers experience your product.
Plus, collecting money faster allows you to reinvest in the org for growth.
The P&L is connected. It is not static.
You could even make the leap that a big change in Days Sales Outstanding can help you put off taking on more funding, and experiencing dilution
Do not make Billing a one person function and a single point of failure.
In some orgs, like health care and health tech, billing, due to it’s complexity, is the most important department.
Billing may be #7 in your playbooks, but it should be #1 in your hearts
Sales Enablement: The people who train the people who sell
Imagine if I told you that a 3% increase to close rate was possible
Do the back of the envelope math on that seemingly small change…
If your win rate is currently 30% on qualified opportunities, and you get it to 33%, that’s actually a 10% step function change.
That’s huge money to the org
An educated seller ramps faster and manages pipeline better
Sometimes the tools to succeed are people, and not tech
Having someone focused on training your sales reps and sharpening their minds before they go into battle is a major uplift to the org
Tier 2 Customer Support: The people who answer the questions past ‘I forgot my login’ and ‘where is my package’
I’ve seen a lot of companies skimp when it comes to the technical customer support resources - the ones that require the ability to code their way out of messy situations, or jump in and help configure a cloud environment
They try to save money by making a smart, highly paid engineer on the R&D team (who’s supposed to be building the next product) moonlight in this thankless role
Yes, you defer spending $150K on another technical resource, one that puts a dent in your Cost of Goods Sold, and therefore Gross Margin
But you also put a drag on the Engineering org, who then puts a drag on the sales org, who’s trying to fulfill roadmap promises to customers
Plus, let’s be honest, the Engineering member doesn’t actually enjoy context switching and solving customer support tickets
So inevitably they let this be the last thing on their list before they log off for the day, or even let it drift into next week, which pisses the customer off, and eventually churns
Don’t be penny wise and pound foolish on technical support
You Can’t Cut Your Way to Growth
If you were to walk the floors of the New York Stock Exchange, there is no plaque for the CFO who cut the most cost.
Cutting cost is an example of optimizing for the local maxima rather than maximizing for the overall business outcome, which is to grow and to make money.
Sure, you can make “more” money from the revenue base you have by trimming the spend in the middle of the P&L. You will indeed see more dollars flow out the bottom. But many times the real way to find operating leverage is by increasing your spend by a logical amount, in areas with high impact, to boost revenue by a non arithmetic amount.
The problem, of course, is the feedback loop in doing so is much longer. You can see a dollar you take out of the system today, but it takes some faith, and hard analysis to trace a dollar of investment now to five dollars of revenue (and three dollars of profit) later.
But that’s why CFOs get paid the big bucks. Because they can see that while a cow performs better in a wind tunnel, they are a poor form of offroad transportation and aren’t great for towing boats.
Mostly Talent - Finance Recruiting
Mostly Talent is actively placing a Director of Strategic Finance, Controller, FP&A Manager, and VP of IR across Series B through Pre-IPO companies. These searches move fast.
If you're hiring, work with us here.
If you're passively open to new roles, get into the ecosystem here.
Thanks for reading, and make sure to check out our sponsor, Abacum.
Download the 2026 Finance Guide: Lessons from the Trenches to get the tactical frameworks used by top PE-backed leader for FREE.