When Bad CFOs Happen to Great Healthcare Companies

(and why this affects so many high-growth Healthcare Champions)

At VSP, we see this movie more than we should: weak CFOs.

We sit across from a Founder-CEO running a global healthcare powerhouse — EUR 500m in EBITDA, founder-owned, and a global leader in its niche. Organic growth 40% p.a. When we go for lunch, he stops mid-conversation and says: "I do not have a CFO. He cannot help me. I am completely alone." The company had outgrown its finance function years earlier. He had simply been carrying on.

In another case, we meet a fast-growing Healthcare Technology company at $30m in annual revenue. The company is extremely successful, winning large, multi-year, global contracts worth $ 20 – 45m each.  But the balance sheet is a heart attack. Cash flow is chaos. The commercial team has been running free for 2 years, owning revenue, yet knowing nothing about cash implications of terms they are signing with clients.

This holds business back, making the company accept subpar financing terms. When we ask what happened to the CFO, the founder talks for an hour. It is a sensitive topic. Finding a competent CFO, not Head Accounting, had proved too hard. The founder does not have proper financial background. In the end, they gave up and kept moving.

To be clear: this affects large companies equally. Even listed ones, as Nadiia Wyttenbach`s prior experience shows.

1. Let's acknowledge what rarely gets acknowledged: this is a genuinely painful experience for the CEO and the company.

Even when we are not talking about extreme cases, such as unreliable numbers, the damage runs deep. When the CFO cannot operate as a true business partner, the implications for leadership capacity are severe.

There is a particular kind of anxiety that comes from knowing that no one has your back at the top. The CEO ends up absorbing work that should never reach them: treasury (FOREX), details of capital markets, supplier negotiations, cash flow modeling. Critical workstreams -  commercial strategy, market expansion, innovation - lose CEO ention. 

And let`s not forget - a weak CFO is expensive! Working capital chaos forces companies to fundraise equity for what should have been solved via proper contracts with clients. Balance sheets deteriorate because terms were accepted that should never have been. Commercial teams embed the business with bad clients and bad revenue models that take a decade to rectify. And through all of it, valuation is compressed – the ultimate price to pay.

2. What a strong CFO actually feels like.

After years of a weak finance function, the arrival of a true CFO is almost physical. First and foremost, the CEO stops absorbing random work. Strategic decisions, such as key contracts with clients, get real CFO inputs - earlier, not post-factum. Contracts are modeled before they are signed, down to cash flow, not only P&L.

Commercial teams stop running free; instead, commercial teams are briefed on cash flow implications of certain pre-pay terms with clients, and are empowered to implement these terms. Clients pre-pay rather than the other way around. The balance sheet becomes something you can look at without flinching. Capital for expansion becomes easier and cheaper to access, and enterprise value is increased.

At a more advanced level, a strong CFO becomes the translator between the business and capital markets - aligning strategy, timing, and structure in ways that increases valuation. 

3. Who is most at risk - and why.

At VSP, we have noticed something counterintuitive: the strongest CEOs are often the most exposed. Highly capable founders, their children - next-generation owners, and exceptional operators can compensate for a weak finance function far longer than they should. They fill the gaps themselves. And the stronger the CEO, the easier it is for the weakness to hide.

Three profiles appear most vulnerable in our experience.

1) Family businesses, where conflicting interests, cross-generational tensions, and governance dynamics quietly repel the most capable CFOs.

2) High-growth firms, where the speed of doubling - in Healthcare AI, that can be every 9 to 18 months even for larger companies - creates relentless pressure on a finance function. A CFO capable at $50m EBITDA may struggle at $300m to $1b.

3) And strong CEOs, who carry weak functions the longest and pay the highest personal price for it.

4. Why this keeps happening in healthcare specifically.

The speed of growth is part of it. In a typical buyout with organic growth only 3% - 10%, a company might take 7 - 20 years to double. In contrast, in Healthcare AI and life sciences, even sizable firms can double in 1-2 years. You cannot replace your entire finance function every cycle, which means you need to attract leadership capable of scaling across multiple orders of magnitude. Those people are genuinely rare.

The technical complexity of the sector raises the bar further. The most successful healthcare companies are deeply interdisciplinary - physical innovation combined with AI, hardware combined with software, MedTech supplying into Pharma, transactional revenue layered with recurring models. Financial leadership capable of operating in such technical and interdisciplinary field is rare.

There is also a visibility problem that we see frequently, particularly in Southern Europe. Many of these companies are global powerhouses that look extremely local from the outside. Language barriers and modesty obscure their scale, sophistication, and ambition - and as a result, they undersell themselves to the very talent they need most. Fixing how a company is perceived externally is often a prerequisite to attracting the right people.

And occasionally, we have to ask a harder question: is there a second patient? Weak finance leadership sometimes persists not because it's hard to replace, but because it's comfortable - because it serves an unspoken need for control. When that is the answer, we cannot help you, and we will not invest.

5. How VSP approaches this.

The foundation is an honest diagnosis: how did we get here, and is the leadership genuinely ready to leave this situation behind? That readiness matters.

From there, the work is threefold. First, value articulation - helping companies communicate who they actually are to an international talent market. Many of the firms we work with are extraordinary (based on numbers, industry positioning, and client contract wins); they simply don't present that way to the outside world, and that costs them. Second, board quality. A weak CFO is, at its core, a board failure.

Boards need real C-suite networks – something rare in VC, especially European VC. Third, ignition. The best finance leaders for privately-held companies are not hired through standard processes. They are identified through network, and convinced through the quality of the opportunity, the leadership, and the culture around them. Finding the right person is one thing. Getting them to choose you is another. 

Stop climbing Everest with a weak finance function on your back.