Q&A: Non-target --> 2x SA at BB --> FinTech Corp Dev --> Corp Dev at a large company

What's been the most rewarding part of your job so far? In the long run, are you're goals to still try to make it into VC/PE or try and climb the corporate ladder to the top?

I am assuming you are still working in Europe since you studied there. What's the background of the people in FP&A? Mainly Big 4 or did they start as lowly financial analysts and moved their way up. I know it's not entirely related to your story here but I am still not sure if corp dev or corp finance(i mean FP&A) is the way to go for me personally.

Thanks and congrats!

5) What's been the most rewarding part of your job so far? In the long run, are you're goals to still try to make it into VC/PE or try and climb the corporate ladder to the top?

The most rewarding part of it is the variety of the work you do. A lot of guys get pushed out of corp dev into other parts of the business so that they can gain expertise and/ or run a whole business unit. It is also a phenomenal feeling to be part of a closely-knit team of people making buy/sell decisions for a company that essentially is a leader within its industry.

My favourite part of it is the purchasing process and adding to our portfolio. It is a great feeling when you make an addition to your balance sheet and you know that it is a long-term play. We recently made a small acquisition of which I will be taking responsibility over seeing through its integration and then steering it strategically to deliver on the business case. I will work alongside a former CEO and founder who is ecstatic about having gotten an exit, but who is also dead set on continuing to grow his "baby".

I want to see where this place takes me. I think that we are not done growing so many opportunities will open in the short/mid term. I don't plan on making my way to VC/PE anytime soon but it is a possibility and find comfort in knowing that the more time I spend here, the more valuable I will be to those firms should I want to make a change in the future.

6) What's the background of the people in FP&A?

This is very varied. Some of them came in as finance analysts and others made their way from M&A, Treasury, Big4...

As I said, the team is extremely varied and it really isn't for everyone. At a low level you are unlikely to receive the same level of training as you would in a bank (technicals), but you will get a much broader base (some technicals, legal, negotiation, DD, capital markets...).

On progression - people rarely move up linearly within the team. The guys who come at senior levels were often analysts/ managers, then get given their own project to run with and return at director/VP level to lead corporate development for a country or region.

Thanks for doing this LWB! Could you talk about your daily responsibilities (day in the life) and those of each level? (i.e. Analysts vs those with 5 years etc

Thanks for doing this - really have enjoyed hearing about your experiences. A few questions coming from the perspective of someone about to start an MBA program and is interested in ultimately landing in Corp. Dev.

1) I don't have any pre-mba finance experience (did Big 4 consulting then F500 Corp. Strategy), so am I correct in assuming that I have little chance of landing an attractive Corp. Dev. gig without first paying my dues in banking (or potentially MBB)? If Corp. Dev is my ultimate goal, how would you think about the decision to pursue banking vs. consulting?

2) For those transitioning in from consulting or banking, how important is industry alignment? Does your group only recruit bankers or consultants with extensive deal/project experience in the industry you are in? Do you have any particular insight into the types of opportunities available to Consumer/Retail coverage bankers?

3) How does compensation look for those transitioning into Corp. Dev? If I came over as a 3rd year banking associate, would it mean an immediate step back in total compensation, or just a slower trajectory going forward? What seems to you to be the ideal point to make the transition?

7) Could you talk about your daily responsibilities (day in the life) and those of each level? (i.e. Analysts vs those with 5 years etc

The strategy and corp dev teams have a lot of overlap so a lot of our senior guys act as internal consultants and leaders during large strategic projects. The analysts tend to get their hands on a lot of the material produced by banks, checking for errors and reaching out to the relevant work-stream leaders to validate the entire proposal. The process is often twofold when looking at a potential acquisition - we will either get tipped off my banks or C-level execs who hold the relationships, or it will be a proactive process where we need to spot an opportunity and build a case around it for approval from the people who hold the company's purse.

Though analysts won't do as much grunt work as a banking analyst would, you are still there to do some of the heavy lifting and refine your knowledge of the industry. The more senior guys tend to float a layer above that, though they are not afraid (at my company at least) to roll up their sleeves and get cracking on work with us, lower/mid management.

8) I don't have any pre-mba finance experience (did Big 4 consulting then F500 Corp. Strategy), so am I correct in assuming that I have little chance of landing an attractive Corp. Dev. gig without first paying my dues in banking (or potentially MBB)? If Corp. Dev is my ultimate goal, how would you think about the decision to pursue banking vs. consulting?

I came straight out of undergrad and was able to make it - albeit with some degree of luck. I think that it is possible to lateral into corp dev if you are in strategy, finance... it all depends on how you build your internal network. Different companies will have different views on recruitment. We will take talent from within, but we have competitors who are keen on pulling talent straight out of one specific BB and a very well known MBB in this sector.

I think corp dev often happens to you as a product of your enjoyment for corporate finance and strategy. Whilst banking is often attractive because of the money, prestige, opportunities... corp dev is all about the process and really enjoying this line of work. Banking will give you a good overview of the M&A process (if you end up there) and will make switching to a corp dev role a breath of fresh air since you will feel like you are actually actively involved with the decision making process. Consulting is also a viable option though we are less inclined to view the associated skill-set as what we look for in a new hire. The perfect corp dev guy is a banker/consultant/accountant/lawyer. Instead of looking into separate disciplines, I would look at studying the highlights of each part of the process so that you really get it. I.e. if you work at a bank, don't be afraid to read the Sale & Purchase Agreements from back to back and ask where the M&A lawyers are really driving value from the legal negotiations.

9) For those transitioning in from consulting or banking, how important is industry alignment? Does your group only recruit bankers or consultants with extensive deal/project experience in the industry you are in? Do you have any particular insight into the types of opportunities available to Consumer/Retail coverage bankers?

Industry alignment is very important as it is this expertise that will draw you to a position. Having said that, it is less important at junior levels and you can go to a different industry if you prove that you can adapt. My suggestion would be to speak to recruiters that focus on Corp Dev (an increasingly important niche for the big recruitment and specialist recruitment firms). Lots of opportunities for consumer/retail focused bankers... there is a lot of consolidation going on and companies are expanding their corp dev and strategy departments. It is all about getting in the front of the right person. If you want to end up in corp dev though, I would say that it is better to make the move as soon as possible after you feel like you have peaked on the banking learning curve. A 2nd year analyst can join us as a senior analyst/ manager, but an associate can also join on the same level. The earlier you start to build yourself up, the better the title/comp progression.

10) How does compensation look for those transitioning into Corp. Dev? If I came over as a 3rd year banking associate, would it mean an immediate step back in total compensation, or just a slower trajectory going forward? What seems to you to be the ideal point to make the transition?

A senior analyst/manager (3-5 years experience) will get the same level of comp as a 2nd/3rd year analyst (all in) and more cash less bonus. I think corp dev falls behind in comp when you hit associate level at the bank, but in terms of market worth, our value sky rockets. 6-7 years experience at a corp dev role will get you calls for VP/AD roles at banks growing their industry coverages, and at this stage corporates tend to hike up your pay with options and all kinds of LTIPs to lock you in.

If you are an associate and pay is important to you, you will feel a pinch when making the initial transition. But then again, if you are killing it at your job, the corporate will often match/ surpass your current comp and give you tonnes of perks. My view of total comp changed drastically when I decided to take the corp dev gig over the EB.

Btw - you won't be making MD level dough until you reach VP level (VP is like when you become a partner to the business - in corporates this is the highest level you achieve before getting to C-level positions and there are various levels of VP. You can be a regional VP, department VP, global VP...)

Congrats on the success thus far, seems like you made the right choice. How were you able to find these opportunities - was it mostly through headhunters? I ask because I'm in a post-MBA Corporate Strategy/Development role at a large public fintech firm and have had very few headhunters reaching out to me - most don't even respond back to my emails! I'm not in a major city like New York or San Francisco so that may be a big part of it.

2nd question:

Did the banks give you any grief for trying to move back into IBD from Corp Dev? I've talked to a few bankers who were questioning my intentions of not having taken a full-time banking offer after MBA and going into corp dev instead.

Thanks and congratulations. really have enjoyed hearing about your experiences. thanks for sharing it,

Thanks everyone for the kind words!

11) How were you able to find these opportunities - was it mostly through headhunters?

I entered the FinTech space when London was starting to get a lot of activity in this area, and it became specifically relevant for the business I was in. At that time, our corp dev team was moving quickly and ripping through deals, so several PE houses had eyes on the analysts. It was more of a product of luck and timing than anything else. Also it does help that headhunters in London are super vicious.

I stumbled onto this opportunity by luck. Since I declined the S&T job and the bank refused to put me in the IB analyst programme, I decided to join a highly acquisitive corporate instead. There is immense value in keeping up with the networking efforts (as during the pre-FT offer phase) 2-3 years after you start. It also helps you to keep on top of what is happening in the job market, and eventually you find something interesting/ suitable. For me this was all done through referrals or direct hiring from people in my network. A lot of Corp Dev jobs tend to be filled on this basis.

12) Did the banks give you any grief for trying to move back into IBD from Corp Dev?

The people who know me well tell me that this company is perfect for me, and that there was no other choice of a career that would have made sense. I did get few chuckles and comments when I first announced it to my network/ friends. Some were very much on the IB bandwagon (I was too), and they thought I was insane for going to Corp Dev. When they found out more about my role, the comp, the progression... almost all of them added it as a potential exit from IB if the grind continued (it did).

The EB was ecstatic to have me on board as I was bringing in expertise that was quite rare amongst their analysts given the types of deals I had been on (at least they thought - I still feel pretty ignorant :) ). The MDs were very keen to have me as well, but they were also supportive when I decided to renege as they knew that I was going to be working with a large client.

Thank you very much for your AMA!

As an incoming SFA in CF at a BB in the states, would you recommend that I stay in CF for 2 years if my goal is to transition into corp dev? Or would going into IB make me a more attractive candidate?

13) As an incoming SFA in CF at a BB in the states, would you recommend that I stay in CF for 2 years if my goal is to transition into corp dev? Or would going into IB make me a more attractive candidate?

CF work (depending on the function) will usually come with a broader skill-set that is more relevant for corp dev. We are talking here about really getting dirty with all the financial statements and doing things like dividend analysis, WACC models... Having said that, being in IB will likely raise your profile more in the short-term given your exposure to headhunters and to corporations/ other banks/ buyside etc...

I come from a CF background and I definitely have an edge on the IB guys who join (though they are better in some other respects like pitching ideas and getting their own projects to fly). The guys that really get a lot of attention here within the organisation are those with solid CF/M&A background and who are very good on both the legal and accounting side of things. Most have accounting certifications.

In summary, it is more about the type of work you are doing.

Great thread.

How do you go about sourcing ideas?

How useful do you find bankers in this respect? In general do you approach bankers yourself or is this left to the senior guys?

Would you generally have an intro or would you ever cold call a banker? Seems a bit counterintuitive but bankers can be very useful in sourcing ideas (especially if corp dev team runs lean) so interested how this works in practice.

14) How do you go about sourcing ideas?

It really depends on the size of the deal. In tech we had extensive databases keeping track of which firms we could add to our portfolio to stay competitive. We often liaised with strategy to validate some ideas, and if it was plausible we would request a meeting with the other side or with a bank.

A lot of ideas also came in from our department heads (actually the majority of ideas did). They have had long-term relationships with the the CEOs of other firms and, therefore, these are often the most successful deals. It starts with a conversation they have at the gym/bar/office... and it reaches us in corp dev if they decide to formalise the process and put it up for appraisal.

The bankers and big 4 come to us all the time with ideas, but these very rarely materialise. This is because at this stage the potential target is already up for auction and the multiples are way beyond what we are looking to pay (not a bad idea, just not the right price). The exception here is where the bank has had a strong relationship with us in the past and they identify that we are a prime strategic buyer. In this case we are given the opportunity to negotiate exclusivity early on.

15) How useful do you find bankers in this respect? In general do you approach bankers yourself or is this left to the senior guys?

I would say that the larger shops are not nearly as useful as the more specialised advisors since they churn so many deals. Hence, it is hard for them to hit the nail on the head. Having said that, they are extremely useful to my firm as we are leaders in our market and they do a lot of free work for us like free analyses, industry reports... We absolutely need the larger banks for larger deals due to the resources they can bring to the table.

The senior guys in the team who did M&A before have their own relationships with senior bankers and they carry this for life. These are the really high level deals that are highly sensitive and really stay under the radar. Though I don't approach the bankers (it is in their interest to approach us - especially in a big financial centre), I am the relationship "guy" for several MDs and VPs. My colleagues each have their own relationships and we tend to divide this.

The exception to what I mentioned above is when we are running an acquisition in a new geography. In this case we either ask for an intro by HQ to the local advisory team, or we set up a string of meetings to get to know all the advisors around. This is the best way to understand the local market conditions and confirm some of the assumptions behind the initial idea.

16) Would you generally have an intro or would you ever cold call a banker

As I said they often call us as they know we are always running deals. Plus, the better the relationship we develop, the more likely it is that we will use them should a blockbuster deal happen.

Indeed, the bankers are our friends. We try to do as much as possible in-house since we have the analytical capability and weight to do it, but we absolutely need advisors when the deal gets complex or reaches a certain threshold.

Not to be crass, but what does a corp dev salary look like?

17) what does a corp dev salary look like?

Short term it will depend on what you negotiate going in as they will often match your total comp coming from banking/consulting and give you several other benefits. If you build yourself up from within the firm, then I expect you to be earning 20-30% less than bankers at junior levels (perhaps even less at associate level).

There is a great equaliser when people reach director/ VP. This is when you get paid in equity and you easily make $300-600k to start of with. People rarely stay in these positions very long as they are often placed to lead a region, department, or to take on a role close to the c-suite.

The following is purely based on anecdotal evidence and what I have gathered so far:

(1 year experience) Junior Analyst: $60,000 - $90,000. This is slightly above the salary of graduates who also did direct entry into other functions (2 - 3 years experience) Analyst: $90,000 to $130,000 depending on personal performance and company performance (3 - 6 years) Manager: $120,000 - $200,000 (6 - 10 years) Associate Director: $180,000 - $300,000+. This is a weird position since you can come into AD as an associate (bank), from post-MBA, as well as 10+ years of experience in other areas of the business (10 +) Director: $300,000 - $600,000. These guys also vary wildly in age. Some guys will stay here and not gun for VP. With tenure they can rake in a lot of money. (10+) VP: $400k+ No one makes VP with less than 10 years experience, but you can get fast tracked here if you are very good and have a bit of luck. I know VPs in their early 30s (don't confuse the corporate VP with a bank's VP). The VP is on par with an MD/partner that has held his post for a while.

As you climb the ladder, 1-2 levels below C-suit comp can jump to >$1m easily.

What is beautiful about the place I work in is that it is growing very quickly and I don't need to abide by the rules of this hierarchy. I have seen people go from 8 months as a manager straight to AD, then Director within 3 years.

Hi Luke, thank you so much for doing this!

I'm a raising junior and very interested in getting in to a tech company. Since I'm not interested in the traditional IB/Consulting paths, I want to go into tech industry after graduation. I have some questions:

1, What are the major differences between going into CD and into FP&A analyst type of rule right after graduation? Is going into CD much harder than FP&A?

2, If my goal is to get into CD after graduation. Should I spend my junior summer in IB, or should I do a corporate finance internship at a tech company?

3, What is the path from CD to product manager like in your company? Do people from finance role often go to product management?

My ultimate goal right now is to become a product manager, because I really believed that a good tech product can fundamentally change our lives. Thank you so much in advance!

Hey, sorry I have been absent - crazy week(+end) at work. Yes the hours are better than banking, but if a deal has to get done, it has to get done.

18. What are the major differences between going into CD and into FP&A analyst type of rule right after graduation? Is going into CD much harder than FP&A?

The roles will have some overlap as the FP&A guys will need to be acutely aware of the M&A agenda when running budgets and internal processes. We work very closely together, and are actually part of the "Finance" department. Some companies will have them separate (Corp Dev closer to strategy or as another corporate function), but the work is aligned.

Going into FP&A there is a very specific set of skills that they can train which will allow you to run both BU and adhoc processes smoothly. Corp Dev taps into many more capabilities, and is therefore more demanding in terms of qualifications. If you did make your way to Corp Dev straight away, you would likely be doing very low level work as these teams run lean and training resources will either be external or left to you (self-study). With this logic, and from my personal experience, yes - CD is harder to get into than FP&A straight away.

19. If my goal is to get into CD after graduation. Should I spend my junior summer in IB, or should I do a corporate finance internship at a tech company?

Having IB experience prior to joining CD is a big plus. corporate finance would add just as much if not more value since it will be more relevant to your role. No one expects you to be an expert from day 1 but if you have a record that proves you have what it takes, then you will stand out from the other guys.

Having a CD goal prior to graduation is a little tricky as you really need to feel passionate about a sector and company. As a student, most aren't able to define this quite yet. IB/Consulting does give you a broader foundation to jump to all kinds of industries.

20, What is the path from CD to product manager like in your company? Do people from finance role often go to product management?

We rarely have guys going to run products. We might have some revolving door with innovation and some product groups, but it is rarely from/to highly technical product roles. There are exceptions (i.e. some engineers who joined the deal team to help buy a fintech firm but who were so good that we decided to train them as M&A guys).

Think about it this way - product development and finance are almost antagonistic. We want to cut resources and make everything run lean, they want to use up resources and go to innovation town. You have a sweet spot in the middle where the finance guy has a technical background and can keep the other guys grounded, but otherwise some firms even resort to separating offices/ isolating each altogether.

LukeWarmBanana - i assume your CD /CS team works closely with your FP&A team just as our one does too and you guys have requests etc going each way and some collaboration. In your opinion how do you think the CD team would react if an FP&A analyst would begin offering his services as help? Not like all day, but often i find that the team all goes home around 6-7 and i think the CD /CS guys stay later, if at those "after work" hours they were approached and help was offered, do you think it would be "kosher"? their team is quite small (although bigger than ours) and it wouldnt be a "cold" approach really as we have close interaction. im also thinking that perhaps the best approach would perhaps be to initiate contact via networking at company events with the more senior people and mention financial modelling training that i have undertaken and perhaps ask them for advice if they haev any suggestions on how can improve skillset in this area / hint that i have created some models of my own for potential acquisitions and for them to have a sense check of what they think some time (and hopefully this might lead t them throwing some work my way). thanks for advice.

Hi Luke,

Thanks a lot for your answer! I really learn a lot from your response and I have some more for you.

I was wondering in a tech company, what other finance roles are revenue generating besides corporate development/M&A? I get the impression that finance is often considered as the "back office" in tech firm and does not get much respect. Do you find it true?

Could you also share some insight about the long term career path for people in CD? Do they mostly stay within CD or do they usually move to other departments such as sales, marketing etc?

Thanks a lot! I'm a raising junior student at a TOP 20 and really want to start my finance career in a tech firm, but I can not find that many information about this path. Much appreciated!

Thanks for doing this. Could you please touch on the corp dev interview process?

Hi Luke,

Thanks a lot for your response! Really appreciate what you have done. Keep it up!

I was wondering how did you learn the technical when you interview for your full time CP gig? Do you use consulting prep guide or more IB prep guide?

I heard that because CP team is small, so they don't have much training for college fresh grad. How much training did you get at your first company? Did you learn the most from your boss, or self-study?

Thanks again!