Hi all,
There's been a lot of talk regarding "generating revenue" in order to be promoted up the ladder quicker. I was wondering what exactly that means, how does a VP generate revenue? Are we talking about revenue in terms of investment banking fees? Does this mean that some technology-related product groups generated a lot more "revenue" than the other product groups in the late 1990's?
If someone could explain what exactly it means to generate revenue be it a VP or an MD, I'd be highly grateful.
Revenue generators bring in deals, or at least potential deals. These are primarily sourced through contacts, which is why networking is so important. Example: MD's fraternity brother is CEO of Visa and wants to IPO it - who do you think the CEO goes to?
Next, revenue generators successfully close the deals, which relates to managing your team well and making the client happy. This gives you a good reputation which may lead to future deals.
Closing deals = big investment banking fees
Summary: Source deal --> Close deal --> Earn fees/better reputation --> More deals sourced...
So it's really all about networking and effective execution?
Here's how an MD, for example, would "generate" revenue:
1) Speaks with guy he has long-term relationship with at private equity firm at an update meeting.
2) PE guy mentions they are thinking about selling a portfolio company and invites the banker to come "compete" for the mandate to sell the company (this is called a "bakeoff" or "beauty pageant").
3) Banker comes in, pitches against a few other banks, and wins the deal.
4) Banker creates marketing materials, approaches buyers, gets someone interested and 6 months down the road, announces the deal.
5) Deal closes in month 7/8, and the banker gets paid a % of the transaction value as a fee. He has brought in revenue.
As you can see, the relationship - step #1 - is most important because nothing else would have happened without it.
Ut sint et beatae eos. Reprehenderit ea facere sint dolorum sed ex. Rerum distinctio et veniam libero amet soluta quia.
Qui ex fugiat nesciunt ut. At eaque architecto consequuntur dolores. Id quasi natus odit expedita. Suscipit quisquam reprehenderit fugit tempore nihil. Molestias voluptate consequatur tenetur eligendi. Perspiciatis soluta culpa voluptatibus temporibus dolorem.
Voluptatum rerum perferendis sequi. Et quia maxime esse et eligendi et. Soluta adipisci sunt officia magnam quibusdam.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...