Banking and Business Development

There’s been some recent postings on banking and business development, particularly at the junior level. One of the more interesting and challenging jobs I have is to build business development skills in others, and I thought I would share some observations.

I don’t want to share too much of my bio as to not reveal myself but I manage a fairly large including several other MDs, VPs and Directors, continue to be actively responsible for client coverage and lead the execution of several transactions year. I’ve been in investment banking for over two decades and started out as an analyst. Based in NY but have worked in London and HK.

1. Clients hire bankers almost solely for reasons of their economic interest.

This could be because they want a trusted advisor, because a specific banker has the best access or expertise, because they need balance sheet or product, because a certain bank will commit the most resources etc. Sure in a tie, the business goes to someone they like personally but clients make decisions based on what benefits them financially. It’s a complete myth that school relationships, networking, family relationships win business - focus on adding economic value to your clients.

2. The best way to become a good rainmaker is to be a good banker.

How do I define that:

• Know what your client really wants and needs and how to deliver that
• Be a true advisor - the clients interests always come first, acknowledging that sometimes acting in the clients best interests is telling them they are wrong
• Have the commercial instincts, work ethic and creativity to deliver great outcomes on your deals
• Don’t be a yes man or yes woman - show some spine. 
• know your industry and the banking products cold. Work with specialists but don’t be reliant on them
• Manage your deal teams efficiently and effectively
• If you can do these six things well business will come to you

3. There are many mediocre bankers out there or decent enough bankers who aren’t advisors but can sell their firm's product.

The industry is rich enough to allow this but clients are smart enough to know and value the really good ones

4. Playing golf, nice dinners etc. don’t win you business.

But they are a great way to spend time with clients you already have. Plus golf and good meals are fun.

5. Business development is learned over time.

So how do you develop that skill over? Can walk you through some of the things I did in my career as examples.

• Junior Analyst: I was working on a very specific industry subset so I developed some good knowledge that was new to my senior bankers. I came up with a list of emerging targets in this sector to go to our large cap clients with.
• Senior Analyst: The economic cycle turned and we started working on restructurings. I came up with a list of targets and got a green light to call on them with a Director, we got a few mandates out of this.
• Associate: I was working with an MD who was a major rainmaker but was pretty lazy at that stage of his career. I gave him a list of three deal ideas for each of his clients. Got me in t!he room for every one his meetings pitching them
• Senior Associate / Junior VP: A lot of the  folks I was working with at sponsors were getting senior enough to be the execution lead on deals or were covering sectors. They were my age and we got on well. I got an early heads up as to what those sponsors were doing and we won some business and I made my bosses look really good.
• VP / Junior Director: I was running a lot of sellsides at this point. I would call on every buyer on those deals using the sell side as product and got to know them

So by the time I started formally covering clients and a sub sector, I had a lot of established sponsor and strategic relationships in addition to having done a lot of deals.

In terms of my team, I ask our analysts and associates to come up with specific deal ideas and when they make sense pitch them together. I’ve also developed a calling matrix for our sponsors so our associates and VOs are calling on people at their level.

Hope this helps,