Corp Dev / Strategy Role - No Deal Flow?
Hey guys -
I started as a corp strat / dev associate at a mid-sized tech company about ~4 months ago coming from an IB role. Comp was good, group seemed sharp, WLB was a huge improvement over banking, and I was interested in the direct c-suite exposure that I'd be getting.
Despite being a hybrid corp dev and strategy role, almost 100% of my work has been strategy focused so far (business cases, misc. presentations, etc.). I've only reviewed 1 CIM, which we ended up passing on shortly after receiving the materials. This company has not been acquisitive historically, which was a concern of mine during the process - however, I thought that there would at least be some deal flow based on what I was told during the process and the backgrounds of people in the group. I went into this job assuming that it would be equal weight strategy and corp dev, and frankly was most interested in the corp dev aspect as I'm coming from an M&A background. I'm beginning to feel like the actual role and what was advertised is significantly different, and I'm increasingly concerned that this role is a poor fit and a misstep. Maybe this is normal for corp dev outside of highly acquisitive PE-backed portcos, but I was assuming that by now I'd have seen at least one process where we submitted an IOI, did some diligence, or even did some market mapping considering that I'm 4 months in.
My question for the forum: is it worth starting a dialogue with my group to try to understand if there are any acquisitions in the pipeline that will give me deal exposure / if there will be any opportunities to work on M&A related work? If there aren't, should I go back to market and recruit for other positions with the narrative that my current role ended up being different than I thought? Or is it still too early to determine good / bad fit seeing as I've only been in the role for a short period?
Understand that the market for new hires is pretty terrible right now, so I'm assuming that the best path forward is to just stick it out at least a year and then worst case figure out a way to spin my experience to match what I'm interested in, but I'm curious to see if anyone has had a similar experience and how things turned out.
Definitely seems like your Company doesn’t really want to do M&A at all. I’m in a similar role and review 1-3 CIMs per week, submit IOIs constantly and we have a pretty active pipeline to keep deal flow going. You should probably reach out to your VP and ask if M&A is an active part of the growth strategy or if you’re just looking at deals when they come through but not actively seeking them.
Good data point and thanks for the response - that's the type of experience I was expecting when I signed on so it's helpful to understand that. Will definitely need to have a candid conversation with the team to understand if m&a will become more of a focus as I progress.
As a quick follow up, how many deals does your group typically close per year? Is it a sponsor backed roll up strategy or just a highly acquisitive public co? This type of gig sounds way more in line with what I'm interested in doing, so just curious to understand the company and how you found the opportunity.
I think the fact that they combined CD and CS teams is a sign they don’t (and won’t) do much CD work. Enjoy expanding your skillset on the strategy side.
Thats not always the case. At my previous CD role it was evenly split between CD and CS but the whole CD team were ex-bankers from EB/BB and a few MMs so we actively engaged in auction ended processes and bid for said companies. Just dependent on our interest level.
Agree - combining CS / M&A is not a sign they don’t want to do deals. It’s probably the opposite in most cases as they don’t want consultants from MBB touching M&A
Start a dialogue and get honest input from seniors who have more clarity on how executives are feeling about possible M&A. Doing a corporate strategy internship and although my company has had 2-3 acquisitions in the past 3 years, the CEO adamantly has been public about his decision to not be acquisitive for the foreseeable future. Some companies tend to be more focused on internal growth especially when they had a few rough years in the public markets specifically the tech space (at least in my case).
(1) Yes. You should have a conversation about deal flow. If you don’t get a satisfactory response, yes you should look for a role that more closely aligns with your interest. You have a very easy explanation to give in interviews as well. You were told the role would be half-strat/half-M&A and it ended up being 100%, or near 100%, strategy. You were hired into a job where the job tasks do not match with what you were told. People get that and will generally not hold it against you.
(2) I interned in a CD role and I am working in a CD role FT now. My internship was with Spirit AeroSystems which is a decent sized ($5-10b equity and rev) tier one aerospace supplier. That role was 90/10 strategy/deals. I think that is fairly standard for non-massive companies and for companies that don’t intentionally make dealmaking an integral part of the corporate strategy.
I now work at Dominion Energy. This CD role is pure M&A. Dominion is a massive utility so this makes sense. Especially since the team is small (ie - smaller than the Spirit CD team I was on) and getting smaller. If you see large CD teams that’s an indication that, unless there is a ton of deal history, that it is more of a strategy role. A large business with a small CD team is more likely to be a deal-based function.
Thanks for the input and the info on your experience. Sounds like you have an awesome gig right now that's providing good deal experience.
Out of curiosity, how did you find those CD roles? Was it mainly through networking or on campus recruiting?
Going to provide a different perspective than others here. Consider setting up your own deal flow, if they only reviewed 1 CIM, it may be that they don't get that many opportunities. One thing you can do is to talk to your CorpDev managers and ask about setting up an outbound sourcing initative instead of being entirely inbounds. Then get an understanding of the investment criteria and build your tracker and start reaching out. Alternatively, if you don't want to do outbound direct company sourcing, you can also discuss with your managers on reaching out to IBs to communicate investment criteria and to get put on their list. Keep in mind this isn't just the big BB/EB/MMs, but to look for small boutique banks as they often are the ones doing < $100M EV deals and those are far more plentiful.
Some people hate the idea of sourcing, but remember that M&A is not entirely execution, it is an entire lifecycle that starts with identifying the M&A strategy, sourcing, executing, and integrating.
Thanks man, really appreciate the thoughtful response. I really like this approach and it's one that I'll try to implement. oftentimes I have found that jobs are as good or bad as you make them, so I will try to shape this into a role that aligns more closely with my interests and the skillet I'm trying to build. If they're inflexible with that approach then it's probably time to start looking again.
Did corp dev at a midsized public tech company. We closed on 4-5 acquisitions a year, most of them on the smaller side (less than $100M for 90% of them).
Helpful data point. Not OP, but interested to hear more about the role as I'm currently looking for something similar.
What was your involvement in each of those deals (ie how much did your team leverage banker support vs handling modeling/diligence internally)? Also, looks like you're in PE now - what prompted the transition?
Pretty much 0 banker support on our side - I did all the modeling and essentially ran the entire diligence process for our internal teams with some support from my director.
As to switching, was both a geographical move for personal reasons into an area with not much to pick from + comp.
Welcome to corp dev. Be grateful you're not involved in FP&A.
What is FP&A? Genuine question.
Corp Dev will frequently collaborate with FP&A for reporting, particularly on intangible assets.
In a similar boat myself. Took on a corp dev role about 6 months ago, and have looked at two CIMs since then. Team passed on both very quickly without much analysis. Spending the majority of my time on strategy / board materials and supporting greenfield development projects. Hours and lifestyle are great, but probably going to start looking for a new seat in ~1 year if we don't get more serious about M&A because I'm just not getting valuable reps here.
Did you make the move as an AS1 and was it after A2A? Can you expand a bit more on what type of workstreams strategy work entails? I've looked into both corp dev and corp strategy. Obviously familiar with the former while working in banking but the latter seems much more vague and sometimes hard to differentiate from other corporate functions like traditional FP&A.
Left as an A2A As1. Fairly large ($100M+ EBITDA) PE-owned business. Strategy work mostly falls into two different buckets, at a high level:
- Management / BOD is interested in potentially entering a new product segment / service or geography. This will involve preparing research, potentially commissioning a market study with an outside consultant, and pulling together a presentation exploring this new market and why it may or may not be a fit with the current strategy (as outlined by our board's "strategy roadmap")
- Management / BOD would like to better understand an existing product segment / service or geography we are currently operating in, and how it fits in with our existing strategy (or not)
In tech, similar boat. If the firm is not super acquisitive by nature then it takes a monumental culture change to adjust that.
1) New CEO
2) Go private/IPO
3) Savvy head of Corp Dev with lots of connections
etc.
Unfortunately those are few and far between. My company is sitting on a sizeable amount of cash and 0 effort has been made for any M&A outreach despite some pretty clear existing opportunities. That being said, I keep my eye out for something really s3xy, keep pitching away and recognize that I am getting a chance to refine my other skills (management, problem solving, proactive opportunity identification, etc.) that will help me immensely at my next stop. Gotta make the best of the opportunity afforded and keep looking for something that is more M&A heavy.
I'm ~9 months into a CD + CS role.
My first 6 months we submitted maybe 3-5 IOIs, I was mainly focused on a bunch of strategic projects. I was interested in these and they helped me get up to speed, but definitely a different pace than M&A. We did hit on 1 IOI and that then took up the next 3 months to the present. It's a deal that's roughly 10-20% of our EBITDA so I bet we only do this one deal this year. Maybe sneak in a tuck-in in H2.
Not a hot take but coming from PE I've been shocked on how little leverage we are comfortable with. I get it's a tough environment but our CFO is nervous about going over 2.0x... so it's just a different speed.
With all that said, I don't mind the strategy work since I do like the industry I'm in. I view it in the lens of wanting to get smarter on the industry so I can keep learning and eventually get promoted / find a new job. I don't want to do M&A the rest of my career but I don't mind lending my expertise when I can. So, in order to 'sharpen' the strategy tools I have to work on those projects. That's how I get myself motivated to weigh in on strategy projects I'm less excited about (though some for me are exciting... maybe I'm a nerd).
My good WLB makes up for the boring weeks though, so overall I'm pretty content.
How are your hours? Also is this a remote role?
Hours are great... average close to 40 with swings in both directions, but honestly more often below 40 than above!
It's a hybrid role, but was able to stay in my city of preference so no big deal. Go into the office 2-3 days a week.
Did you start on IB? Currently an analyst at a BB thinking about the WLB benefits of going the Corp role vs PE (and if the “pay cut” is worth it)
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