Tiny boutique - dealflow risk?
Hi all - question for you.
Previously spent time in CDD / strat and now considering next move. A role has come up with a v small, sector specialist boutique IB.
It seems a good place with good people to learn the technicals and deal mgmt side of things from - but my concern is dealflow.
It seems they had a bumper 2020-22, with 2023 and 2024 looking very sparse (1-3 deals p.a.). I have an offer, and have had a few meet-and-greets scheduled before making a decision. I of course plan to ask about their expectations on dealflow, how my bonus would be affected etc., but would these kind of #s be considered an instant red flag to prospective joiners? Any specific questions I should drill into? Thanks!
What sort of deal sizes do they work with and what is the industry?
Based on your context will probably have to do a lot of the origination/bizdev work for them (cold emailing and calling), assuming they're in the LMM space (£100m EV). If they operate in this EV range then you also probably won't do that much modelling, the majority of valuations will be based on precedents and you might do a bit of comps.
It's probably a stepping stone to break into more rigorous MM IB, but don't expect the IB experience especially if this is the case.
Source: I did an internship in a very small boutique in London (albeit generalist) but operated as an Analyst as I was the only junior in the team. If the firm is doing 100m deals and is only getting 1-2 deals a year then that is very poor to be honest - my firm was a startup and had like almost 10 deals in the pipeline only a few months after inception, none of which were from legacy relationships.
Firstly - thanks for your response. Wary of posting too much identifying info as it's niche (thus recognisable) - but your assumptions above are all correct, and it's not in tech, SaaS or industrials etc. The caveat I'd add on their dealflow is that they say they had a few deals come right to the wire before collapsing, so their pipeline's perhaps stronger than their dealcount would suggest.
Nightmare scenario is I spend 1-2 years there, no deals completed, so difficult to a) hop to PE, b) go to better IB, c) come back to consulting.
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