Joining portco post associate—what title/comp?
For post PE associate role at a portco, what level/title should you expect and what comp (base, bonus, equity)?
I’m looking at a combination of Corp dev and fp&a roles in a relatively small SaaS company in tier 2 city. It’d be great to get any insights here!
Not sure on comp but I wouldn’t expect north of $200k in cash. Title should be director level (corporate development or whatever) and you should report directly to the CEO/CFO.
Thank you. How about equity package? What should I expect in % of FDSO and also $ wise assuming good exit?
This is anecdotal but I’ve seen CEOs at 3-5% equity and CFOs in the 1-3% range. Based on that I’d ask for 1% and be happy with .25-.5%. Depends on the size of the business of course.
In general I would prefer Corp Dev roles that flow up into CEO rather than CFO.
Doesn't help with OPs original question but figured I'd mention as it will be a relevant tertiary data point.
Yes I agree and I made sure that is the case. I was actually looking to see if I should try and mix in a finance/accounting responsibilities as well (and that side would report to the CFO)? If the ultimate goal is to become PE backed CFO, how critical would it be to have the finance/accounting responsibilities outside of just corp dev?
Difficult to say since I'm more junior and not in a PE Backed Corp Dev function but my unorganized thoughts below:
I think it matters less at smaller companies. The set of responsibilities will likely be broader for a Corp Dev manager at a smaller PortCo vs the responsibilities of a manager at a F100 company and so you'll have a less "cookie cutter" answer to drive your decisions (and inherently more CFO exposure even in a CEO aligned position).
In general I would lean towards CEO backed roles that cross-functionally get exposure to finance / CFO than the other way around. Whether or not it's "critical" probably depends on the exposure you'll get naturally and where you're looking to exit to. I think it will become increasingly difficult for you to compete with someone that came up through the accounting / finance departments and knows the entire P&L at a larger company, but at a smaller company this accounting / controller / finance -> CFO progression is MUCH more rare and will align you stronger having had the finance / accounting exposure.
Being CEO aligned with the chance of landing a CFO role is much better than gunning for a CFO role and basing your decisions to reach that nirvana then falling short (the alternatives are disproportionately worse if you strike out on the latter).
Bump
Assuming you're packing a T1 city PE pedigree, you can certainly expect a "Director Strategic Finance/Corp Dev/Corp Strat" title but it really does depend on the size of the org you're joining. Assuming you're already familiar with it though and have done an assumed two years of portco management with it, the director title shouldn't be too far off. Unfortunately can't comment on comp
Edit - my bad, the T1 city thing doesn't really matter. Need to consider primarily your relationship with the portco/management and what viable experience you can actually bring to the table. Ie if you were only grinding out LBOs for your fund and never got balls deep in portco work for this company, why would management feel comfortable giving you a directorial title? Make sure you aware of your own dynamic before going in and negotiating title/comp
Thanks, TheBuellerBanker .
I should have given more context. I do currently work at a top UMM fund at a tier 1 city and my firm has multiple strategies. This company I'm thinking about joining is from our growth equity strategy (which I don't do much work in). This company is relatively small (~15-20M ARR and profitable), which is why I'm wondering if there's room for me to push for a higher title (even a VP title).
I personally have not worked directly with this company but I have built a good reputation inside the firm (incl. a third year offer) and was lucky enough to do a diverse of transactions (platform buyside, add-ons, sale, financing) and also have been working closely with portfolio companies on M&A and also on the finance operations side.
The company is looking for someone to run M&A and integrations alongside with the CEO and also help out on FP&A with the CFO. I am comfortable running both (since I have run DD on add-ons and also worked very closely on budgeting/forecasting with a subset of my portfolio companies). To reiterate, although I have these experiences, they were not directly with the company that I am thinking about joining.
Given the size of the company, the role they want, and my experiences/background, would you be able to give a better sense of what title/comp/equity I should push for?
Thanks in advance!
EDIT: for more context, I have the full support from the principal who is on this deal/company, so the dynamics on that side have been good as well.
Yeah man I'm assuming you've got 2-3 associate years under your belt now so with a 15-20 ARR business which is PE backed, I'd think the BD/M&A arm is probably not too robust at this point which could position you well considering your experience with periphery portcos so I do think a Manager or Director title is totally on the table. Can't really help you with comp or equity since I'm not really privy but I'd push for at least a matched base if not more given the title boost? Not really sure how that part goes but interested if anyone could chime in
Maybe a stupid question but if your firm owns the company, wouldn't you be able to take a look at the cap table and see what the allocation is for current managers and back solve a bit? Not sure if / how open the teams are at your shop.
Yes I’ve done that and I was mostly curious about what is “market”. Let me know if you have any insights!
Got it I see. I don't want to claim I know what market is, but a few useful reference points in our portfolio have Directors / VP's / Group Heads between 0.4% - 1.0% depending on their seniority, with CFO's typically around 1.5% and CEO's around 3.5% - 4.0%.
Given your firm's thoughts of you and being close to the Principal on the deal I don't think asking for 1.0% is a bad idea. Although to your earlier point, that may be unlikely if that's where the CFO is.
Good luck!
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