The role of the Chief Revenue Officer (CRO) in private equity-backed portfolio companies has evolved in recent years. A stronger emphasis on revenue growth, coupled with the need for capital efficiency amid rising interest rates and longer hold periods have reshaped the revenue leader’s role into that of a strategic architect of enduring value creation. Today’s CROs must navigate economic challenges, focus on sustainable growth, and build efficient teams and systems to drive their portfolio companies forward amid steep competition.
Pressures Facing Today’s Revenue Leaders
“The days of private equity creating value solely through financial engineering and cost cutting are long gone. Revenue growth is now critical to realizing returns. In PE, there’s an immense amount of pressure on today’s CRO compared to 10 years ago. CROs are now the anchor of the value creation plan.”
— Joe Gravino, Vice President of GTM Search at Falcon
Many factors have made financial engineering a less viable strategy for growth in PE-backed portfolio companies than it was previously. Worldwide dry powder has peaked to about $2 trillion raising overall prices amid a sluggish dealmaking market and making financial engineering less effective. Hold periods of up to seven years have become more commonplace, requiring a focus on more sustained value c...