Q&A: Non-target --> 2x SA at BB --> FinTech Corp Dev --> Corp Dev at a large company
Hello everyone, A few months ago I came to this board with a really tough dilemma and you guys helped me see it through. I now want to pay it forward as I know that people are getting increasingly interested in corporate development/ corporate finance. Here is my story: I studied at a non-target school in Europe and partied throughout most of my undergrad. During the time I spent there, I did 4 internships in completely different industries, with 2 being at American BBs. I got FT offers for both, but was not interested in S&T, so decided to accept a Corp Dev gig. It was a small team doing lots of tech stuff, and I found myself at the hottest corp dev team in town, getting lots of responsibility and running more deals than any IB/PE shop around. Calls poured in from various headhunters, and they were tempting as I still wanted to try the M&A advisory side of things. Eventually an offer came in from one of the hottest EBs and I decided to accept. Since I never had any formal training in corporate finance, this was my chance to leverage my deal experience and to really strengthen all the training I forewent. While serving my notice, I got a call from a former boss (one of the 4 internships from undergrad), asking me to join their M&A/ Corp Dev team in a relatively senior position. Now, this company had grown to $200bn+ in market cap, and the overall package was really attractive vs what the EB was offering. It was such a tough choice as I was so proud of landing the EB gig, and also I did not want to ruin my chances of getting the PE job I knew (thought) I would get at a megafund or leading VC. I was also afraid of the reneging process, what not being in IB would do for my learning/ career, and that I would create an even larger skill gap for myself. With the guidance of this board and my mentors, I chose the Corp Dev gig. Hands down the right choice - I could not be happier in my current role. Please feel to ask me any questions about the prep process, recruitment, job specifics, reneging, adapting to a role you are not qualified for... I will try to answer to the best of my ability. LWB
1) what sort of relationship is there between your Corp Dev team and bankers?
In the tech/fintech job it was very special since we viewed the BBs and EBs as the ones we brought in only on special occasions (they worked a lot with the sell-side), and we tended to hire more specialty boutiques. The head of M&A also gave us the leeway to develop relationships with the bankers, so we each held different conversations to keep a finger on the pulse of what is going on. This was very fun as our junior guys all had senior bankers wanting to be their best friends.
We also did a lot of the work ourselves since we were churning so many deals. The modelling was all in-house (validated externally if a larger deal).
With the larger corporate I feel that the relationship is completely different. We now do very little of the modelling and mostly sit in front of dozens of banks who pitch different ideas. Because of the valuations we spend a lot of our time validating business cases and making sure that we can execute on the integration plan. The stakes are also a lot higher here for banks and they value our relationship massively.
2) what background do the people more senior in the Corp Dev team have?
I would say that a lot of our senior guys come from a finance background (FP&A). This is because they are well positioned to learn about what drives the business and they make killer M&A guys when they get good at it. We do have some former bankers who come in at post-MBA level, but these guys usually enter on the same level as someone who did built themselves up for a few years at the firm. There is no "banking premium" awarded, but these guys are extremely good at picking up new information so they often get promoted quickly.
We also have lots of MBBs and lawyers. They are invaluable in the legal negotiation and DD phases!
A key lesson I have learned here so far is that there is a massive reward for tenure in this organisation (holds true for all of our previous acquisitions and competitors). Most senior guys who are in any strategically important function will have 15-20 years of time. I am not saying that you can't be hired externally at a very senior level... but we will always look internally for talent to bring to the top since these guys know the industry inside out.
3) have you done any of the BIWS / WallStreetPrep /macabus type training and do you feel its enough? anything youd particularly recommend for those wishing to make jump to CorpDev but without M&A background on the assumptions that deal structures / complexities etc aren't the same as in IBD.
Corp Dev is extremely adhoc and like PE or VC, a lot of the things you end up working on are unprecedented. All of the resources you have listed will give you a good technical base but this function is much more about being able to do run M&A from a strategic point of view and to manage the process internally. My former boss always used to tell me "no matter how good your models are, you won't get any deal to fly if you can't get the buy-in of each workstream lead". For example, we will get the bottom up figures from the sales guys, build a model around that, then feed that back to the different units for review, adjust the model...
It will all depend on the nature of your team as well. I have colleagues who are not extremely technically inclined but they are superstars in our team. They can build a few models if they really want to, but they won't make you a flashy LBO each time you are running a transaction. The only advice I can give here is: become more plugged into your industry/ adjacent industries than anyone else around and you will kill it in your job.
4) how do you best adapt to a role you feel you're not best qualified for?
Not being best qualified is different from be under-qualified. You can always rise up to the challenge, and I am a firm believer that you should always be vouching to deliver what is slightly beyond your current capability level. If you were hired into a role, specially at a junior level, it is because they see potential and not necessarily immediate result. Therefore, don't worry about being perfect on day one - really focus on asking the right questions during the handover. I would try to absorb as much knowledge as possible but more importantly, try to get the person to teach me how I can go about learning the rest on my own (resources, training, other people to speak to...)
It is ok to be under-qualified so long as you remain humble and dogged.
Thanks for doing this. Could you please touch on the corp dev interview process?
For full disclosure, I never went through the official process. I went through a series of conversations (informal), and was hired based on recommendations. I did however speak to the head of M&A, several VPs and some of the more senior guys too. They were all framed as "AMA" sessions but I am sure they evaluated me on this basis.
I think a lot of the recruitment in CD is done in this way because we often require a specific set of skills or someone with a specific personality type. Personal recommendations have a lot of weight for this.
Let me give a few scenarios of how the recruitment/ interview process can play out (from what I have seen).
A) Headhunter/ recruiter:
This tends to be the last resort unless we are hiring for a very senior position. The HH will vet a series of people who have attractive profiles and give us a list. We will then shortlist 10-20 we are really interested in, and the details of the job/ potential benefits will be released to these candidates. The HH will maybe interview/ chat with the candidates and pick 5-10 we will continue interviewing internally. At senior levels, we often have the CFO and other executives perform the interviews. At mid-manager levels we will have 1/2 senior managers and at least 2 VPs. The interviews don't tend to be technical and are heavily focused on past experience and fit for the company/ situation at hand.
Once we get down to 2-3 candidates, it is usually up to the most senior person involved in the process. My boss was hired directly by the CFO, for instance.
B) Direct application:
This follows a similar process as above but the level of people involved is usually more junior (also because of the nature of the people it attracts). I have been involved in telephone/ first rounds several times, and usually screen people based on recent deal experience, performance/ recommendations (is an MD backing the application? etc), and other intangibles. I am not going to lie - if I see a guy/ girl I know will have fun in the team and work hard in tandem with us, that is a huge plus. Also, though I am ashamed of this, education/ institution bias is a real thing.
Anyway, after the initial interview, the process above is followed. For junior ranks one VP interview will usually suffice (4-5 interviews total from experience).
C) Recommendation/ networking
This is wildly varied. I didn't formally interview, but have buddies who did have to undergo a formal process.
Here is a tip for people:
CD teams are often like a club of guys/ girls who are very close, work very well together, hangout outside the office, and are very aligned on pretty much everything. People frown when I say this, but I see it everywhere. We play jokes on one another. The VPs take us out drinking all the time. When my boss' tie is dirty, I will ask him if he ran out of toilet paper after his morning coffee... This is all to say that these teams often have a "personality", and the more you fit in to that profile, the more likely you are to be selected - be this as an analyst or as a senior manager.
Feel free to ask any questions about the negotiation stage, adjustment, daily-routine. I am happy to keep this thread going so long as people are interested.