New to Corp Dev, seeking advice
Hi champs,
I am 3 years out of college and have been working in analytics/corp fin/strategy. I took a few accounting & finance classes in school (contemplated a career in banking back then but never made the cut) and have friends working in banking, so I know excel, the lingos, concepts, what DCF is, etc. However, running a 3-statement model is definitely something I have to re-learn.
I have recently started a Corp Dev position in the telecom industry and guys, I am CLUELESS :( I got the job because of a strong referral, and I showed them that I'm curious and willing to learn. They know I have no investment banking and deal background, and they're willing to give me time.
To be honest, I am extremely worried at the moment. A lot of things are happening here as the company is aggressively expanding, which means I have tons of things to learn while the team is not available to dedicate the time to train me. Besides self-training to become a DCF queen asap, I also have to catch up on industry knowledge.
So my big question is, for a person with no background like me, how long would it take me to start adding values to the team? I'm estimating 3 months, and is that too generous? I really don't want to sit here like a flower vase and I'm trying really hard to learn as much as I could, but it's very difficult to do so without much direction. Would you mind sharing your experience on your first 3 months at your banking or corp dev job?
Also, any advice you might have for me regarding corp dev is greatly appreciated, (e.g. how to stay on top of things, is it possible to add values to deals that are already active, etc.)
Thanks in advance!
3 months sounds about right. Take a bunch of notes, ask questions, and read this: http://macabacus.com/learn.
My first 3 months in IB were rough. Most nights I left after midnight, I didn't really absorb much information about process / markets, because I was too consumed with getting my ppt and excel skills up to any sort of acceptable speed. But it definitely got better.
Now looking at our new class, one thing I wish I realized is that for the first month or two, you have a free pass to pretty much ask any question. If you don't know it after 6 months, you'll feel really awkward asking something you know you should already know.
As far as modeling goes, you can find 3 statement model lessons and templates online, it's not rocket science. Hopefully you can get back up to speed in a weekend or two.
Look up some equity research of the company you'll be joining (if their public) and some of their competitors and go from there. Make sure to get some initiating coverage. You'll learn both about the industry in general and how investors view the company.
Appreciate your advice, girl. It feels very weird to sit here for 1 week already without doing any work for the team while everyone is busy as hell. Can't offer help either :(
Man, it's good to have connections.
I know. Without that referral I'd never be able to make the jump. But at the same time I had to move from NYC to a middle-of-nowhere city (think the capitol of Iowa/Kentucky/WV...).
foggy I'm assuming you interviewed well and I wouldn't be too worried. Have you had the chance or have any ideas about potential training such as a WSP course? Perhaps you can ask your manager and see if he/she is willing to let you take the class course or even the online version?
If not, I'm in a similar position and started reading through Paul Pignataro's Valuation book: https://www.amazon.com/Financial-Modeling-Valuation-Practical-Investmen…
This book takes you step-by-step via Excel so its a good beginner book to get you started and a bit more competent in financial modeling.
Beyond this I would focus time and energy in learning about your company, your industry, and thinking of M&A targets and strategies. Maybe develop your own pipeline of potential opportunities and use templates to construct comparable comps models and down pro forma statements and review them.
Let me know if you have additional question and PM me because I have something that will help you...
Good luck!
Thank you very much! The VP gave me an analyst manual from the bank he used to work for, and I also have the Rosenbaum book from college. My friend gave me her BIWS account as well. I have been spending most of my time reading the packages sent over from our targets then see how my team values them from a strategic standpoint. It has been a rough first 2 weeks but my plate is slowly filling up!
Three months is plenty of time to learn valuation. Your first step would be to sign up for a financial modeling program like BIWS or WSP. I personally prefer BIWS, but WSP is also great. Sign up for the basic Excel course and whatever basic modeling course is offered. Anyone can plug numbers into a template, so make sure to take the time to learn the concepts behind the material.
After you have a decent understanding of financial modeling (if you work FT and watch these modeling videos when you have a minute, this should take around three weeks to a month), try staying late at work and building out models with any financials that you have. Obviously do not take this information home. This should give you some good practice.
Thank you for your advice. I have been struggling the most with the PPE schedule and deferred revenue forecasting -- those two are major parts of our analyses, and they're more complex than some of the examples I have seen so far on the study guides. Probably because I haven't made it to the advanced modeling lessons yet haha.
LMAO, I remember my first few months in corporate development. At least twice daily, I'd utter the phrase: What the f$%# did I get myself into. I was in a slightly different position in that I had a valuation/modeling background but was a generalist and had little knowledge of the complex industry I was entering. Below are a few things I did to help me get up to speed:
Read All the Old Deal Files: This will help you get a feel for the industry and the Company's m&a process. How do their models look, what are key risks were identified, why did they pass or acquire, how did the deals pan out, and what is their preferred deal structure?
Talk to People in Other Functions of the Business: I don't know anything about telecom but I learned a ton from talking to people in marketing, R&D, sales, regulatory, IP, etc.
Read Everything About the Industry: Find the best trade publication, news site, books and internal resources to read. Once you think you have a foundation go talk to people in the company to see how things work in the real world.
Be a Sponge: In corp dev you get access to C-Level executives and the most high profile projects within the company. Take great notes, listen, and learn from them.
Learn the Company Inside and Out: Study the history, the old CEOs, investor perspectives, important products and acquisitions, and read key SEC filings. Also identify the key value drivers and metrics in the industry. Probably should be following competitors and reading their earning call transcripts as well.
Develop Relationships and a Reputation: Be friendly to everyone you work with and develop a reputation for a person that gets things done. Add value where you can whether that is excel work, PowerPoint, or setting up meetings. Just not being a douche goes a pretty long way in the corporate world.
As others have noted, it takes 3 - 6 months to start to feel comfortable and developing your own opinions and thoughts on various strategies and situations. Others had some solid insight into modeling which is mostly learned on the job.
Best of luck.
Agree with the above. If you can get your hands on them, looking at old deal files will help you look like a genius. It really helps you get a feel for the whole process, the type of data and information your bosses are looking for, an idea of the flow and format, and the type of questions that will be asked. If you're completely new to the industry, then reading the annual reports of your company and competitors is an easy way to get a high level understanding of the industry without getting swamped in the details until you're comfortable.
The financial modeling part is the easy part and it's not something that you have to memorize every step or how everything is linked. It's not like you'll have to build it from scratch and memory every time. You can copy an existing file or always google something as you do it. Just make sure you're prepared enough to speak about the data and understand the general flow of it.
Thank you very much for the great advice! It is true that the ultimate goal of my job is to be able to form my own opinions on the targets and think about different financing scenarios. Modeling is only a part of it. I have learned a lot so far, and people in my company are extremely nice which makes my move here much easier.
If they are very active like you mentioned, it might be good to look at previous work they've done (whether pitches or actual deals) and understand what are the key statistics (like PF leverage, accretion).
The best way to learn is by doing (which you will soon), but in the mean time, it doesn't hurt to learn by reviewing what's been done.
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