Who wants to be a millionaire?

You'll need special qualities to cash in as FD at a venture-backed company.

A typical advertisement:

MBO - Finance Director - £120k + 7 figure equity

Having recently concluded the £80m management Buy-Out of an industrial services company from its Global 500 parent, a leading British venture capital firm seeks to appoint a main board Finance Director to join the buy-out team.

Candidates should have international multisite experience and be comfortable managing the expectations of external shareholders. You will be a self-starter with intuitive commercial skills and strength of character.

1 THE PACKAGE

i) Forget the salary. This career move is all about capital gain. No VC will expect you to live on the breadline (if your wife and kids haven't got a secure roof over their heads and a trip to Majorca to look forward to, you'll get it in the neck at home - demotivating!) so you may well earn roughly the same as now. But don't expect to move for more. And for God's sake don't mention cars - if they offer you a Mondeo, say you'd be delighted to drive a bread van. Ask for a Jag and the interview's over.

ii) What's the equity worth? If things go well, in just a few years you could be sitting on a tidy gain. The VC is looking to at least double his money, but such is the management ratchet, you could be looking at a gain of 20-30 times your investment.

iii) How much do I have to put down? Six to 12 months salary (say £80k here). Enough to motivate you to get out of bed on a frozen Monday morning in January, but not enough to have your house on the line (you'll become risk-averse in your actions then and the VC doesn't want that).

2 THE COMPANY

The venture capital industry is very economical with information at early stage. If you're lucky you'll get a sales and profit figure or, as here, a deal figure (this company had sales of £100m and a PBIT of £14m). You may not be told the exact nature of the business or the location (never, ever, ever question location - if you're not prepared to move to Jon O'Groats to become a millionaire, stop reading now). You never know though, the perfect opportunity might land on your doorstep.

3 WHY IS THERE A VACANCY?

A VC will make his mind up fairly early on about the quality of the existing management team and finance is a crucial role. If it is a Buy-In, the FD has an important role pre-deal, crunching the numbers and participating in the negotiations. The rewards for being involved at the beginning (particularly in the equity stakes) are usually greater. In a Buy-Out, the VC will keep a close eye on the incumbent - if he isn't up to it he'll be out. Always find out why there's a vacancy - even speaking to your predecessor if you can (maybe he realised the company could never survive its debt burden?).

4 WHAT ARE SHAREHOLDER EXPECTATIONS?

i) Forget your spouse. You're now married to this company 'til you exit (at least during the week).

ii) Move it. No time to get your feet under the table, the VC wants his money out in 3 to 5 years.

iii) Not for the faint-hearted. Asset finance, mezzanine debt, overdraft, your house - you're up to your ears in borrowings and as FD you're going to have to manage the team calmly through this highly leveraged situation. No longer are you at ICI - cash is King.

iv) Honesty. Never, ever colour the truth. Forecast prudently, keep your costs nailed down, manage the cash and always, always tell your fairy godmother if there's trouble on its way. Don't ever lure yourself into the misconception that the management team own the company (and stand up to the sales director if this slips his mind). This is a ruthless business - don't perform and you'll be out on the street.

v) Are you street-wise? No pure bean counter ever survived in an MBO. You'll need to be tough, commercial and have a streak of entrepreneurialism in you. You're a full team member and you'll need to play your part in the whole.

5 CV

i) Forget War & Peace. You're one of 150 applicants and no VC has got time to read 10 pages.

ii) Keep it brief and clear. Where did you work and when? And what does each company do?

iii) Pack it with financials. Sales/PBIT on joining, leaving etc.

iv) Key achievements. Sum your career up in 5 short sentences, ideally personal financial achievements/improvements.

v) Directorship. If you've never sat on a board, forget it. The other 149 applicants have and no VC is going to give you the luxury of learning the ropes with their money.

Finally, Good Luck. Joining a Buy-In or Buy-Out team can be the most inspiring and exciting career move ever. Management motivation can change overnight with the lure of serious equity - you'll find a real "can-do" atmosphere. It'll be 3 years' hard graft but get it right and you could be set up for life. As one 34-year old millionaire FD told me recently - I think I've got another 6 deals in me!