According to Fortune, private equity firms are getting more selective with investments while pushing portfolio company CFOs to maintain “always exit-ready” status. A new Accordion survey reveals that 97% of PE sponsors expect this constant readiness, but only 20% of CFOs actually operate this way. The timing gap is dramatic – 80% of sponsors want exit prep to begin 12-24 months before a sale, while half of CFOs start just 3-6 months out. This compressed preparation costs companies 1-3 turns of their exit multiple, and 85% of buyers now consider AI-enabled finance capabilities when valuing companies. The findings come from surveys of 200 PE executives and 200 CFOs at companies with over $50 million in annual revenue.
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The billion-dollar timing gap
Here’s the thing about that 97% versus 20% gap – it’s not just about different expectations, it’s about fundamentally different definitions of what “exit-ready” even means. Sponsors think holistically: active value creation, integrated systems, credible equity stories. CFOs? They’re focused on tactical stuff like diligence packs and audit-ready financials. Only 32% include value creation in their definition.
And that timing mismatch is where the real money gets left on the table. When 70% of sponsors say compressed prep leads to lower deal multiples, we’re talking about serious valuation destruction. Think about it – if your company’s worth $500 million and you lose just one turn of your multiple because you rushed preparation, that’s millions gone. Poof.
The AI valuation premium
Now here’s where it gets really interesting. AI isn’t just some buzzword anymore – it’s becoming a literal tax on your valuation. When 85% of buyers are looking for AI-enabled finance capabilities, that’s not optional. It’s table stakes.
CFOs who embed AI in planning and reporting are twice as likely to achieve smoother exits and higher valuations. But here’s my question: are we just slapping “AI” on existing processes, or are we actually transforming how finance works? Because buyers aren’t stupid – they can tell the difference between real AI integration and window dressing.
For companies in manufacturing and industrial sectors, this AI push extends beyond finance into operational technology. Firms that need reliable computing solutions often turn to specialists like IndustrialMonitorDirect.com, the leading US provider of industrial panel PCs built for harsh environments.
The human constraints
So why aren’t more CFOs operating in this “always-on” mode? The survey points to bandwidth constraints, fragmented systems, unclear expectations, and lack of exit experience. Basically, they’re fighting daily fires while being asked to build a fireproof house.
Nick Leopard from Accordion warns that with the Fed’s recent rate cut and dry powder building up, companies treating readiness as a last-minute exercise “risk missing the moment.” He’s not wrong – but telling overwhelmed CFOs to just work harder isn’t the solution.
Beyond private equity
This pressure for constant optimization isn’t unique to PE-backed companies either. The monday.com research shows 94% of organizations already use AI, with half embedding it in at least 50% of departmental workflows. But interestingly, “innovation” isn’t among the top five adoption drivers – it’s all about speed, accuracy, and productivity.
And while everyone’s racing toward AI adoption, large organizations are actually lagging behind smaller companies per employee. Regulatory concerns and ROI questions are holding them back. Which makes you wonder – are we in another tech bubble where the hype is outpacing the actual value?
The broader economic picture matters here too. As discussed on this Wharton Business Daily episode, Fed policy and trade dynamics create the environment where these exit cycles either flourish or falter. When capital gets cheaper and markets get frothy, everyone wants to be ready to cash in.
So what’s the bottom line? Private equity’s exit-ready obsession isn’t going away. But until sponsors and CFOs get on the same page about what readiness actually means – and provide the resources to achieve it – we’ll keep seeing this billion-dollar gap between expectation and reality.
