Private Equity VS Corporate Development - Need Advice Urgently

Hi monkeys,

I'll try to keep this short, and I'd really appreciate all advice. I live in a pretty low COL area. I'm a little over a year on the job as an associate at a small (less than 5 people) lower middle market PE firm. I was not looking for another job but got reached out to by a recruiter regarding a business development role (although I'd call it more corporate development, since the team works directly under the president on big deals, whereas they have a commercial BD team for smaller-scale stuff). This new company is around $100mm revenue and 250+ employees. All-in comp is similar, but the breakdown is very different:

PE firm:
$55k salary
$42.5k target bonus
$97.5k total

New firm:
$90k salary
15% bonus
$103.5k total

The new role seems exciting, and the work they're doing in the industry seems very interesting, too. They basically want me to come on and take a leadership role on the team because they don't think anyone on the current team has what it takes. The company has grown very rapidly in recent years and is building out their BD presence to take advantage of their opportunities. I expect a similar work/life balance, but the culture is said to be challenging for many at the new firm, and I know I am good at my current job and have a good working relationship with the managing partner (who I work closely with). My biggest concerns are not having left enough of a "mark" in my current role (in terms of number of deals closed while I've been there, at 1 right now with 2 still in due diligence), as well as the uncertainty of how I'll perform in this new role, given the high expectations. Please provide any guidance you can, and feel free to ask clarifying questions.

 

Here's the description: • Model operating and financial results of new business ventures in a well-documented and organized fashion • Prepare presentation materials for, and participate in, internal deal meetings, external deal meetings, and client facing meetings • Maintain and develop various standard templates distributed for use by all members of the business development team. • Conduct industry, commodity, and competitor research to support and inform new business projects, as well as prepare industry conference presentations • Interact with deal leads, senior executives, and customers • Train and mentor Business Development Analysts on processes, modeling, and systems • Track actual performance of new business projects to deal models during commissioning and early months of operation

I don't think the company has been involved in M&A as of yet (it's been growing rapidly recently), and the current deal scales are more along the lines of signing large, long-term operating contracts in the industry, but the role has been communicated to be intentionally open-ended, so if I were to bring a possible target candidate to their attention and it made sense then I would be working on those deals as well.

 
Best Response

Just so you know, I'm one year out of IB, so I am giving you advice based just on three years of total work experience. Make sure to consult with some other people before making a decision.

I would be hesitant accepting this role. First, this role does not sound like an M&A/CD role at all. It sounds like you will be evaluating new sales projects and put together research for this firm's sales/BD staff. There's nothing wrong with a career in BD, but it sounds like you want a career in M&A. Second, even if this role is M&A-focused, I might decline it simply based on the firm's revenue. A firm with $100M in revenue is probably not doing too much M&A. Firms also don't just go from non-acquisitive to acquisitive overnight. I declined several CD roles from firms with no track record of completing M&A transactions because I felt and still feel like I am at a point in my career where I need to get as much M&A experience as possible.

I hope that makes sense. Let me know if you have any more questions, but you really may want to consult with some of your more experienced network on this one.

 

Sil makes an excellent point about whether the company is at an appropriate size to support an acquisitive strategy.

I will add that I've had 2 buddies that have jumped to similar sized (or smaller) companies who said they had dry powder and wanted to start doing deals.

In each case, they were there for like 6 months doing FP&A and waiting for the deals to materialize. Management proved to be too gun shy to even look at potential opportunities so they ended up eliminating their positions and laying them off.

As a warning to all my would-be corp. dev. monkeys, make sure the firm has first put their money where their mouth is.

 

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