Saw on older post on this topic but wanted to get some updated feedback. For a SA would you be better off at a larger bank doing middle office or DA IB? What is DA Davidson like?
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DA Davidson has a direct path to lateraling to other banks. They are the definition of LMM
No one has anything positive to say about that place on here lol, place overall seems like a joke
They are headquartered in Great Falls Montana, fascinating
Will address your points and add some additional color commentary here, as there appears to be a lack of actually helpful information.
To start, as a disclaimer, I am fairly familiar with the group as I worked there for a number of years. That being said, some of my clinical understandings on the most up-to-date inner workings may not be as accurate anymore.
Davidson, ( or “DadCo” for ease of reference) Technology group is generally a very solid team. They’ve placed alumni across a variety of highly regarded LMM — MM Software PE shops, as well as laterals to larger banks (Piper, RJ, JPM, etc.). Thus, in contrast to many comments I’ve seen, exit opportunities are plentiful. As a side note, Piper attempted to lift the entire west coast software team at DadCo several years ago. As for focus areas, NYC group is Fintech, Data and vSaaS, West Coast offices contain solid prints in HCM, Sales enablement SaaS / MarTech, vSaaS, DevOps / Product Management, etc. Deal sizes (EVs) can vary anywhere from $25 — 250M+. Mainly work on majority recaps and minority capital raises. Team both pitches and executes deals, no bifurcation between product and coverage teams. Clients are still centered around founders, albeit they’ve gained several PE mandates in recent years. Their website is a good reference for recent transaction prints. Fairly lean, close-knit team with a lot of very capable senior leaders.
With that initial context in mind, in terms of deal experience, Analysts and Associates are typically given as much responsibility / leeway they are comfortable with. While maybe slightly cliché with regards to phrasing / nomenclature, there is no doubt you will gain great, experience quickly (very similar to comparable tech IB roles at MM banks). Specifically, this encompasses both live deals and pitches / thematic focus area work. Deliverables are consistent with any other bank operating in the LMM / MM software space: teaser, CIP, operating model builds, pipelines / sales rep analyses, customer data books, SaaS dashboards, TAM / SAM / SOM builds, etc. etc. These builds are done directly interfacing with management / fund with some oversight, but plenty of room to run, as desired. Diligence process facilitation remains very similar to any other shop (processing data requests from buy-side shops / strategics, arranging calls, triaging DD providers, formulating MP decks, assisting with prep and ad hoc analyses, processing more DD requests and more DD requests, daily process updates with buyers, and more). As such, if this is what you want to learn and are interested in, middle office at a BB is not it.
I have a lot of respect for the people there, there’s certainly a large contingent of very smart, capable and talented individuals who could easily work at much more prestigious banks / PE funds. There are some less savory individuals as well, but no group is immune from this.
As for some areas of consideration, (1)as mentioned extensively on this site, pay is usually below “market” when comparing to the RayJays and Lincoln’s and Blair’s of the world, without a doubt. On the flip side, you typically average 10 - 15 hours less a week versus your peers in those seats. If in Orange County, this means living with a pretty awesome quality of life. Also, given structure of bank, sometimes bonuses take a haircut because of the performance of other groups, which is less than ideal. I’ve noticed that top analyst / associate performers are usually always comped fairly close to street levels. (2) While exit opps are plentiful, you do need to be more active than those at BB / EB shops to get to buy-side firms. Headhunters still reach out, you will have opps in many processes, but bar is a little higher. If your ultimate goal is to work at a MM buyout / growth shop, DadCo is a perfect fit. If you want MF, then better used as a stepping stone.
Lastly, there is a lot of noise on this website. The echo chamber always rings loudly and focuses on prestige and tiers. In reality, there’s a myriad of paths to ultimately reach where you want to go. At the end of the day, getting quality reps at the job sets you up well for future opportunities down the road as long as you work hard, which is true for most groups. Moreover, and somewhat ironically, in spite of the vitriol spewed at DadCo, larger banks and many software funds are more than happy to hire top performers from there.
Hopefully helpful and best of luck with recruiting.
This is not completely wrong, but it is embellished.
"Deal sizes (EVs) can vary anywhere from $25 — 250M+" ...true, but most deals skew on the lower end of this spectrum. Majority of DADCO deals are sub $75M EV.
"On the flip side, you typically average 10 - 15 hours less a week versus your peers in those seats." ...LOL either you're on crack or times have definitely changed. It's a LMM sweatshop, anyone at the firm can attest.
"I’ve noticed that top analyst / associate performers are usually always comped fairly close to street levels." ...LOL. Again, you're either on crack or times have changed.
"If your ultimate goal is to work at a MM buyout / growth shop, DadCo is a perfect fit. If you want MF, then better used as a stepping stone." ...this is a stretch. PE exits are definitely the exception and not the norm. BB laterals are few and far between, but lateraling to a better MM shop is within reach. Literally nobody from DADCO has ever eventually ended up at a MF.
A2 - appreciate the reply. Seems you may be more up to speed on the current state of the state based on your reply on specific items, but do want to provide a reply on some incremental points of view. I will push back on the "embellishment" quip, as I did caveat the specificity on tech for my statements, though will provide incremental information covering your retorts. Not trying to bolster recruitment efforts as my perspective is very siloed and there are multiple groups which may experience completely different status quos, simply wanted to combat the assertion that seems to be building that working in middle or back office is better experience.
(1) To start, with regards to your first point regarding EVs for deals: To be clear, this solely contemplates tech group only during my time and the deals I worked on. Personally, after some quick calcs, I levelled out around $125M EV on the deals I worked out. Based on our conversations with the team at the fund I'm at, I do believe the range I provided is largely accurate. To note, there can be a large disparity on EVs (e.g., NinjaTrader recently sold for $1.5B to Kraken, and HeroDevs with PSG was a big deal in recent months (EV is confidential; however, significantly higher than your postulated average). Across the firm, likely, if you contemplate the Diversified Industrials ("DI"), FIG, and Consumer, though, your EV assessment is likely spot on.
(2) & (3) On the hours front, the work quantity does vary quite between offices and groups. From my knowledge and time at the firm. Consumer and DI certainly work significantly more hours on smaller EV deals with higher volume (not a huge surprise IMO since most banks experience this as well for these two specific coverage groups. Especially Piper consumer + DI and most infamously Baird's DI team). DI, in particular, is known to experience wild oscillations in junior staffing levels and retention. Moreover, and most recently, over the L24M period the DI group experienced material turnover on both the senior and junior levels including the former head of the group and a slew of juniors, VPs, directors and MDs leaving for other seats. For context, I would say DI is the most "sweaty" coverage group at the fund.
That in mind, if DIs brutal churn and burn became the "modus operandi" within all coverage groups, this is indeed an issue. As clearly mentioned within my initial note, there is no doubt that the group pays below Street levels; thus, if you are being comped below street and working equal hours there is now benefit within the model unless you are building experience to lateral into a up-market bank. Historically, they did take care of the hardest / best juniors with parity on street-level comp, early promotions (bring them on par with other, competitive firms within the zip code) - though, as you pointed out, maybe this is not the case anymore. However, I do know a few individuals who made it through the ranks (junior -> senior banker) across various groups that would attest to this (they were elite talents to be fair).
(4) On exit opps, to my knowledge, no one has landed at KKR, Apollo, Ares, etc., but that's not to say the sought after level of prestige is not inherently possible. For reference, Qatalyst, FTV, Goldman, Centerview, AEA, JPM, Piper, AEA, L Squared, Alignment Growth, RayJay, etc. are all spots ex-Dadco individuals have landed. There's plenty of additional spots as well with a quick look up on LinkedIn.
Happy to chat further, just shoot me a DM.
Correct - Diversified Industrials is an absolute shit show...horrendous culture, tons of people have left recently and those remaining are trying to gtfo, avoid like the plague
Incoming SA in DI group. Am I cooked?
bump
Bump. The group has an associate application open but heard a lot of people leaving / bad hours. More insight anyone?
Yeah, there's an opening because well over half the group has left in the past year lol. Bad culture, bad hours, bad pay. Comes from the top, bad leadership makes it a shitty place to be.
Any updated thoughts on NYC Tech team?
Heard their bonus is not as bad other groups at the firm, 70-80%?
Where did you hear that from lol. That comment must be from someone at the firm. If you do not quit or get fired by bonus you’ll be lucky with 30% of base bonus. Complete sweatshop and horrible culture the turnover speaks for itself. Every banks pay significantly more even the banks with comparable horrid cultures and hours
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