Excelerator Partners supports ambitious scaling businesses from the seed to mid-market private equity stages with access to best-in-class executive leadership expertise.
The team has extensive experience in scaling businesses from start-up to hyper-growth and leverages this to assess leadership capabilities and needs, growth plans and deliver solutions. Services include access to fractional C-suite leaders, advisory and consultancy on specific challenges and opportunities, permanent executives, Non Executive Directors and Chairs.
Dartmouth Partners is an award-winning executive search firm operating exclusively with investor backed businesses. The firm nurtures enduring partnerships and strategically solves talent problems through their understanding of businesses moving through an investment journey. From offices in London, Paris, New York and Frankfurt, Dartmouth utilises its extensive investor and advisory network to identify and attract transformative individuals that can add significant value.
The firm has a proven track record of working with a diverse portfolio of venture backed businesses. Whether this is hiring for a business that has recently taken Seed or Series A investment or strengthening the leadership team of a Series E company readying for IPO. Dartmouth partners with organisations on board, management and transformational leadership roles that will successfully add value at every stage of the investment journey.
The offering includes board-level appointments (with a key focus on CEO, CFO and NED hires), HR (including generalist and Talent roles) and individuals from Corporate Development and Strategy backgrounds (which may sit in growth or product roles).
Dartmouth have supported companies such as Cazoo, Babylon, Trouva and Hello Fresh to build their senior teams and work with leading venture capital, growth and private equity firms, including Accel, Softbank and Hoxton.
A Finance Director (FD) plays a key role in both raising investment and delivering the growth plan post transaction. Many investors require that an FD is brought on board as part of the fundraise.
In this section we explain the role of the FD and how to go about sourcing and selecting the best candidate.
The FD oversees the finance function, including the finance team, financial reporting, controls and budgeting. When introducing external equity investors to the business and the Board, the importance of financial controls and reporting increases. Management needs to able to effectively communicate performance against budget and the business plan set out at the time of the investment, as well as forecast cash flow to ensure there are sufficient reserves to deliver the business plan and realise investor returns.
The FD acts as a key partner, supporter and sounding board to the CEO.
The FD role comprises a number of core elements:
Role specification
This resources contains a template role specification for you to tailor to your business.
The specification should include a short summary of the business, a summary of the role, including location, compensation and duties, and a candidate profile, setting out the skills and attributes sought.
Sourcing candidates
If you already have investor backing, then ask your investor to contribute to the effort of sourcing candidates. Many institutional investors have a good network of Finance Directors. Some investors operate job boards for their portfolio companies and will advertise the role for you.
Leverage your own network, use databases such as LinkedIn and advertise the role on your website.
Assessing Candidates
Decide on a consistent setup for the assessment process to ensure a fair process for each candidate.
We suggest the following:
Keep the Board and investors up to speed with progress. They may wish to be involved in the selection process, or may be happy to meet with your chosen candidate after an offer has been made.
Board and investor approval
Once you have selected your preferred candidate, ensure that you have the necessary approvals from the Board and investors to put forward an offer.
Making an Offer
Prepare an offer letter setting out the key terms including:
The offer should be subject to satisfactory references.
Referencing
Ask the preferred candidate for 2-3 professional references.
Employment contract and incentives
Prepare an employment contract setting out the detailed employment terms.
For investor backed companies - if the FD will be issued equity or options, your investor may require that they sign a deed of adherence to the Shareholders Agreement, as they will become a shareholder. This is important in ensuring that the leaver provisions apply to the FD's equity and that they are bound by the same anti-compete clauses as other executive directors that hold equity in the business.
The lead investor will ordinarily appoint an individual as a Non Executive Director on the Board of Directors. This individual is usually the person who led the investment from within the investment team and may be known as the Investor Director. Apart from their statutory obligations as a director, their role will be to represent the investor on the board, help to monitor performance of the investment on behalf of the fund and be a conduit such that you can benefit from the fund’s broader network and expertise.
The lead investor may also (or as an alternative) hold an observer seat – in practice this differs very little from a Non Executive Director except that the individual cannot cast a vote and may have varying rights to speak, as set out in the articles of association adopted on completion.
It is also common for the lead investor to appoint an independent Non Executive Director or Chairman, i.e. an individual that does not work within their organisation. These individuals are part of the fund’s network and usually have significant Non Executive and Chairman experience drawn from other companies. The rationale is to strengthen the board with the appropriate governance and bring relevant sector and growth credentials and experience.
Investor Directors: individuals appointed from within the fund itself, to represent the fund and provide a conduit, are typically unpaid.
Non Executive Directors: independent individuals appointed by the fund are paid by the company in the same way that any other Non Executive Director would be. This is usually a monthly fee in return for a monthly commitment of time, say, 2-3 days.
The Investor Director will be selected by the fund and the fund will have the right to appoint an alternate – this is important in case that individual ceases to work for the fund and must hand over their board positions.
The independent Non Executive Director is usually selected in partnership with the fund – it is unusual for a fund to seek to appoint a director that a company does not approve of. However, note that the fund may have the legal right to remove this individual and appoint another, which could be used if misalignment between the company and the fund were to arise in the future. We recommend speaking with your legal advisors on this point to understand the precise rights that the investors will have with regards to making changes at board level.
Selection of an independent Non Executive Director or Non Executive Chairman may take place before or after completion of the transaction, and typically works as follows:
Investors commonly appoint two directors to the Board:
Investor Non Executive Director
This individual is usually a member of the investment team, but may also be a member of the investor’s portfolio team. Apart from their statutory obligations as a director, their role is to represent the investor on the board, monitor performance of the investment on behalf of the fund and be a conduit such that you can benefit from the fund’s broader network and expertise. Some investors also appoint an Observer to the board, who is also a member of their investment or portfolio teams. The observer typically has the right to attend board meetings but may not vote. They may also serve as a substitute for the Investor Director when they are unable to attend, and are an additional point of contact within the fund.
Non Executive Director or Chairman
This individual is usually independent of the fund but may be known to them. They may be appointed as a Director or as Chairman, depending on the dynamics of the board and the individual investor’s approach. Their role is to bring relevant sector, growth and governance credentials and experience. They may also be a conduit to the fund and help in monitoring performance of the company.
Investor Directors and Observers are typically unpaid, but some funds charge a monitoring fee to cover their time.
Non Executive Directors as paid by the company whether they are an appointee of the fund or independent. This usually takes the form of a monthly fee for a monthly commitment of time, say, 2-3 days.
The Investor Director will be selected by the fund and the fund will have the right to appoint an alternate – this is important in case that individual ceases to work for the fund and must hand over their board positions.
The independent Non Executive Director is usually selected in partnership with the fund – it is unusual for a fund to seek to appoint a director that a company does not approve of. However, note that the fund may have the legal right to remove this individual and appoint another, which could be used if misalignment between the company and the fund were to arise in the future. We recommend speaking with your legal advisors on this point to understand the precise rights that the investors have with regards to making changes at board level.
Selection of an independent Non Executive Director or Non Executive Chairman may take place before or after completion of the transaction, and typically works as follows:
