Corporate Development - Those who left banking, when did you leave and do you regret it?
So similar to, I imagine, a lot of you, I’m starting to really struggle with the grind of banking. The work itself is often interesting (at least on the execution side) and I work with a lot of top brand name companies, but the constant overhang of the work and job that can blow up my life at any time has become a real source of unhappiness.
However, I struggle with leaving so much opportunity on the table. I’m top bucket, management looks out for me when I need it, I get the best staffings, in less than three years have done tens of billions of dollars across 5 announced public M&A deals across the TMT sector, have had several more get close and die, can generally choose who I work with (or really, can nix VPs I don’t like), etc. And even with all that, I’m starting to feel like I need more autonomy, less client bullshit and greater command of my schedule.
But, if I leave my job for Corp Dev now I’ll probably end up either in a level below where I think I should sit or at a third-tier type company in a Directorish role. I'm also hearing from people I’ve talked to that all in comp is probably less than my expected bonus by itself (I think this year I’ll get 250-275k in bonus itself at an EB) and I’m still ~2 bonuses away from paying off my student loans (paid for my wedding out of the first bonus).
So my question really is, at what point does jumping off the banking path make sense, especially when you’re taking such a large pay cut and when every single year of experience in banking can mean multiple years of advancement at a corporation. And for those of you who made that jump at various times, did you regret making it and at the time you made it? Apologies for the long post, but interested to hear any anecdotes.
I've actually never met anyone that regretted leaving banking.....sure, are some exits better than timed than others? Yes, but life on the corporate side is so much better that no one sits around thinking "boy if I had just done another year or two of banking"
It's a very personal decision and hard to say. If you would be bored working ~50 hours per week in a slower paced environment with less exceptional coworkers, I'd stick in banking. If you've hit the point at which the money is not a huge motivator or necessary for your lifestyle and you are over all the stress, you probably wouldn't regret a move.
If your serious considerations involve worry about working with "less exceptional coworkers" and only making low 6-figures, you probably need to re-evaluate your life.
I'm not one of them, but there are plenty of people who might not love leaving a ~$500K all-in job for one that pays half of that, possibly involving moving to a less exciting city, and then have to deal with people who won't look at emails past 6pm at night or on weekends, or who do shoddy diligence, or don't pull their weight in other areas.
You clearly have not worked in banking + typical corporates.
The money part is tough because it’s always the mindset of “a few more years at this job and I’ll be so much better off”. I would definitely focus on an acquisitive fast paced company in the area of technology that interests me the most, because boredom is a real concern, but boredom might be welcome at this point.
Did you make the switch yourself?
Yes, although I made the move at a more junior level so the comp cut I was taking was pretty negligible (just ~10% but for a ~30% cut in working hours) and I was extremely sick of banking at the time. For me, it's been the right move. For you, it's probably worth exploring and then trying to decide if you can stomach the comp cut. I do not work in tech, but tech will pay a premium for talent across the board, so your comp cut may not be as drastic as it'd be for someone focusing on another industry.
I feel once you're out of banking, you quickly realize most bankers are not the gods that they are made out to be. Both in my roles in corp dev and corp fin now, we've hired everyone from your typical BBs, EBs, and a few MM firms. Other than Lazard and a few rockstar associates here and there, I really have not been impressed with them, especially at the MD level.
I totally agree on most bankers not blowing you away. I've seen plenty of MDs at very reputable banks be wrong on the most basic things. Of course I've been wrong plenty of times, but sometimes even MDs at top tier shops say something obviously wrong on valuation and you wonder how they've been doing this for 20 years.
Most of my co workers across non-finance groups have been very good at what they do. But some of them have also stunk - primarily due to being unavailable, unwilling to put in any work during diligence, showing up to meetings without having given any topic any thought, trying to pawn off their responsibilities onto other people or other teams, etc. At least bankers are almost always available and responsive when you're working with them. Putting in an unremarkable but above the bare minimum amount of work and always being available puts you above 90% of employees at most companies as long as you don't consistently make catastrophic mistakes.
MDs in banking are great at their job ie sales, but have no clue in many cases about what is going on regarding the numbers - the VP is the highest person that does know what is going on, when they move to corporates and it's not only about sales anymore they suck in many cases. I have MDs that still do not understand the impact of IFRS 16 but who cares given that they bring in billions of $ in revenues.
Just curious... how the f*** does a 275k bonus not pay off your student loans? I understand there will be a hefty amount of taxes but 2 bonus's that are a combined 500k+ cannot pay off an undergrad degree? Did you stay in a penthouse during your 12 years of college?
Grew up lower middle class, went to private schools with no family help. ~25k left on undergrad loans (was over 100k two years ago) and ~200k on B school left. 275k bonus is equal to ~160k cash. Two more bonuses will pay them off plus, but just one won’t. My stub/first full year bonus went to the part of my undergrad I’ve already paid off, some cash cushion savings, moving/adult furnishings, my wedding, an overly expensive month long jaunt around Europe for a honeymoon, and an engagement ring.
Sounds like you just need to figure out what will make you happier - working in a more meaningful/interesting role or paying off your student loans next year vs ~3 yrs now.
Personally I hated IB by the time I left and couldn’t wait to move on, but everyone’s situation is different.
Honestly, just start applying and see what you can find. Polish up the resume, hit up some HH's, do a little reaching out to your network, etc. As top bucket EB, I think you could be surprised at the sort of opportunities you might find from even poking around a little bit and advertising you're open to a move.
That said, I think you might be attaching a little too much value to the prestige, etc. you have in your current role. There's not really that much of a difference between a eight, nine or ten figure transaction, except the latter ones are more likely to be in a newspaper your friends read. Yeah, decent chance you'll take a paycut, though you might be pleasantly surprised what some jobs pay. In the end, you just gotta ask yourself what really matters to you.
When you say might be surprised about what pops up, are you talking more broadly than Corp Dev?
Also on your second, it’s not really about the prestige, but IME the job and the skillsets you build are pretty vastly different if you are doing sponsor sell sides then if you are doing public company M&A. It’s just a completely different job from a quantitative standpoint and the way you have to think about buckets of value and value creation. So it’s less about the prestige and more about having a differentiated skill set. And my concern about just starting to reach out without having a more refined view is that there are limited companies in TMT that are truly brand names that pay for talent, are acquisitive, and will value that skill set. So don’t want to burn bridges if I take some interviews, turn them down, but then decide to exit in 18 months.
Primarily corpdev, though I think you'd see good traction with PE (though As2 is a little bit of a weird middle spot to be jumping, still doable I imagine).
Yes, the skillsets are different. At a very high level, my impression is that sellside tends to be a little boil the ocean (even if the ocean is a couple feet deep) and cover all the bases. Buyside tends to be a little more lets key in on the key deal issues and beat those to death, gameplan things out. It's a little bit of a shift in thinking, but leverages the same core competencies. I've heard that EB's do a much better job of cultivating an "investor mindset" too. Anyways, its all learnable.
I agree that you might not want to shoot your shot with the FAANG's and their like if you're not committed to a move. In my opinion, those are great places to work (and I'd seriously consider dropping my job if they came knocking... I doubt they will though), but the growth there is limited. Great companies, great talent, lifestyle and comp will be great. But, since these are established brand names, your ability to really impact the company will be small - tuck in's and the like - and thus your comp will be commensurately limited. No knock on them, but that's how it is.
There's a whole long tail of companies, both public and private, where M&A is much more a part of their growth story. They're willing to pay for talent which can source, diligence and execute deals. It's a really good time to be doing deals - sponsors (if they're worth a damn) tend to be supportive, leverage is super cheap, covenants are easy, lots of dry powder. My boss (early 30's) came from a MM IB/PE background and effectively built the M&A function at my company - he's pulled 7 figures the last few years in a row. I was the first hire, and I've done alright for myself. IMO it's also just a lot more rewarding when you're doing deals that have a major strategic and financial impact and are helping to build the company you're a part of, too.
Have you ever heard of the story of the businessman and the Mexican fisher?
You sound like you suffer from FOMO. There will always be someone who earns more and works less than you do. You will always leave money on the table, whether it's by a decision you make now, such as leaving banking, or a decision you have made in the past, like attend an overpriced private school. What matters is balancing that with what brings you happiness. If you're happy in IB, great, stay....,but, in my two years in IB and now three years in corp dev/fin, I've seen exactly one senior banker who was truly happy, but then again....his wife did yell at him on a conference call for one of our divestitures because he was taking a call while she was giving birth to his second child, so maybe he wasn't happy after all.
But, the nice thing about banking is, they'll always take you back, and you probably will be a much better banker after gaining some corp dev experience. We've hired everyone from GS, MS, and JPM to PJT and Lazard to William Blair and RW Baird....and the only bankers who have ever stood out to me in terms of being a value-add, were the aforementioned senior banker and the associates and VPs who previously worked in corp dev. It really does make a difference in terms of learning an industry.
There is definitely an element of FOMO, but a large part of that is pretty rationale when you think about “well I can retire 10 years earlier if I do this for 5 more years” or “I can exit to VP at a corporate if I do this for 6 more years instead of taking 12 years to achieve that if I exit to corporate now”. So just trying to get some anecdotes on how people who made those trade offs felt about them later in life.
Completely agree with you on the relative lack of unhappiness - though I’m not sure I see a lot of happiness with the corp dev people I work with either. But I guess it’s all relative. May I ask what industry you work in?
But, it never works like that. When it comes time to retire ten years early, you will once again be asking this same question, except this time, it will be "well, I can work five more years and get a few more houses" or "well, I can work five more years and retire with a few more million". Not saying your logic makes no sense (it does), but just realize that these excuses never stop. It's why MDs still work well into their 60s when they could have easily retired ten years ago. Nothing wrong with that, especially if it makes you happy.
I work at a PEG-backed manufacturer. I've previously bounced all over the place in tech, healthcare, hospitality/leisure, and FIG. I would like to get back into hospitality/leisure, but that does not seem likely at this point, at least until we recover from COVID-19.
not much else to add here that hasn’t been said but me and some of my coworkers have discussed when to leave finance many times and a common theme is always just “it’s not going to be easier the longer you wait.” it seems like it’s harder to get comparable pay the higher you go. an analyst can go from 80 > 50 hours and pay goes from $160 > $120. but seems much tougher as a senior associate / jr vp making $400-500K and working 60-75 hours and going down to ~$200-250 for 50 hours.
I definitely did not regret it. It definitely depends on what company you end up at. Luckily I ended up at FAANG. I find it to be much more interesting and I have greater responsibility/impact when compared to banking.
Do you mind sharing with us the compensation range for corp dev at a FAANG? Thanks
Do you mind sharing with us the compensation range for corp dev at a FAANG? Thanks
I will be starting full time in IB next year and I know Corp Dev is what I want to exit to. Does anyone have any advice on timeline and when would be an optimal time to make the move? Seems like buyside recruiting is very structured and very early, but most exits to Corp Dev I've seen were associate or VP level bankers. Do I do banking for 1 or 2 years and then be on the lookout for roles as they pop up? I'm guessing theres not headhunters or other recruiters to be in contact with like for PE.
You are correct that Corp Dev recruiting is not as regimented as IB or PE. It is typically need-based, i.e. replacing someone that left or filling a newly created position. Your best bet is to just setup job alerts for keywords and titles.
Given your age I’d also consider Corp Dev adjacent roles such as Chief of Staff that would give you executive team exposure that you could use to transition to a Director or VP role down the line.
Thats really interesting, never thought of "adjacent" roles. Are there other job titles that would be similar to look out for? I have alerts set up for Corp Dev and corp strategy just to see how openings happen over time, but definitely interested in seeing other ways to get to a similar corporate management level position later on. Appreciate the help!
Left IB after two years. Never regretted it. I think some people are wired for it and others aren’t. I have several good friends who stayed in banking and seem to enjoy it. Personally I find the work incredibly boring and unnecessarily grueling.
I lateraled to corporate development a few years back and have found the work immensely more interesting. Plus if you find the right roles and move up the ladder the all-in comp can exceed IB. Life’s too short to work at a job you hate.
Thanks for the input. Mind elaborating on what you think finding the right roles are to move up into high comp roles? It’s always been my impression that my best bet is to run a Corp dev group or strategic finance group in hopes that the company you’re at values those skillsets and eventually moved you into an GM type role which can then lead to a c suite job. But those types of moves, as far as I can tell, happen seldomly and only to people with 25+ years of experience
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