Starting corp dev firm after PE
Let’s say someone has 5-6 years of experience in IB and PE and a dozen or so deals under their belt across both.
I think such a person could win business from middle market firms looking to do M&A and helping them source and complete M&A. The types of firms that are not sophisticated enough to do it on their own, but they know there is value to M&A, they may be willing to hire someone.
Charge say $250-400 an hour, maybe a deal success fee on top. Understand there could be different fee models.
I think it would be possible to, at a minimum, replace a PE associate salary with grit and hustle to win clients. At best, start hiring out a team and after a few years have a few employees and a real business doing a couple M in EBITDA.
Has anyone seen anyone do this in practice or have any feedback on the idea? Or am i being naive and nobody would hire an ex PE ASO to manage their corp dev?
I definitely think there is value in this approach. I even did Corp Dev at a ~2 BN company where I know for a fact a PE Associate from any reputable fund would have done a better job than our Director and VP. I think if you were even further in your career (e.g., VP in PE, or even a Senior Manager / Director / VP in Corp Dev), you could also offer these services, and I would wager would have much higher demand.
Honestly, I am not sure most companies would trust a 24 year old to execute and direct M&A, but if you were say 30ish, with ~8 years of good M&A experience in one industry, why shouldn't they consider you? If you underperform, its much easier to cut your contract vs fire you, and there is a lot of dead weight in Middle Market Corp Dev.
My recommendation would be to try and partner with a PE fund, and prove your worth through your first year of partnership, then up your rates when you receive their stamp of approval. I cannot tell you how many PE funds need solid Corp Dev leaders, and the folks they usually do hire are budget hires and are not well positioned to do run these companies. My experience and knowledge here is totally anecdotal, but it is better than nothing.
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