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New Age Investors Challenges Before CFOs

A new age investor is someone other than a money lender,

family, friends. These are Private Equity/ Venture Capital funds

(institutional funds) or Angel investors (entrepreneurs/

professionals who invest in ideas/entrepreneurs) or High Net

worth Individuals or Mutual Funds, Institutions, shareholders

who invest in listed companies and understand the art of

making money/returns on their investments. They are also

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professionals who are/have been entrepreneurs, run

businesses or been/are part of a professional set ups.

Managing A New Age Investor

The role of a CFO has undergone an evolution; the truth is that

the evolution has been more in terms of an expansion of the

role rather than just a change. Capital markets and new-age

private investors have also played a critical role in being able to

provide the CFO not just challenges in their roles but also

increased visibility for themselves and the organisations that

they lead. Life in general for India Inc is getting tougher and

particularly for CFOs, given the economic conditions (even with

the improved condition), competition breathing down the neck

and investors getting smarter and aware of where they are

investing. Thus, the CFO’s role now moves to the domain of

taking investors along in his/her company’s growth story

whether this is through Venture Capitalists/Private Equity

investors or fund raising through capital markets in the form of

IPO/FPO.

Is the new age investor more demanding? What do these

investors demand? What is it that the CFO should be doing to

manage such investors?

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Integrity, Ethics And Value Systems:

One of the most fundamental reasons that investors invest in

any company is based on the credibility of the management

team (not just the promoters and/or the CEO) and the integrity,

value systems of the CFO on board this company improves the

confidence levels of the investor. An investor wants a CFO who

would not just be a ‘spokesperson’ of the company but also

someone who would communicate both the good and bad

news. The credibility is also enhanced when investors see

evidence of the CFO taking efforts to build a good quality team

under him/her. Good Corporate Governance, managing

regulatory compliances and putting in place robust accounting

systems should be the focus of any good quality CFO.

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Read the full article here: http://mycfo.in/blog/?p=239

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