The rise of business development roles in the industry

Hello,

Just trying to pick up your brain because I'm going to interview with another small cap private equity firm for a business development role. I was wondering what internal/exit opportunities are to be expected. Is there room for qualitative strategy work in that role or its the Associate/VP that perform all the quantitative and qualitative work by themselves?

Would you have any insight on the job itself (travel to conferences or to prospective companies' sites)?

Highly appreciate it!

 
Best Response

People are terribly single minded. I personally think BD is awesome. I mean your job is contacting and meeting entrepreneurs all day. I also consider it to be one of the most important roles in a team. No deals = no analysis to be done = no closing deals = no carry.

The industry is insanely competitive now and for funds to outperform their peers they need to bring in proprietary deal flow, hence why I believe these types of roles will be more and more common and respected. LPs jerk off to proprietary deal flow.

 

Lots of good points in this thread.

Having worked on this side of things, I can give you some first hand experience given that I've been responsible for a lot of the sourcing/BD efforts at my firm.

Proprietary deal flow is the name of the game; if you want one way to stand out at your firm, this is it. PE guys are crazy about finding deals that aren't competitive/widely auctioned, so if you can generate value via sourcing, expect to be well compensated and recognized for it. BD is increasingly becoming an integral part of PE, because not everyone can sell/develop relationships naturally. I was fortunate in my role (due to the lean team structure), in that I was exposed to many facets of PE (BD, execution, and the investment process), so I got a lot of experience and was able to travel/attend board meetings, do conferences, etc. Culture/team layout matters tremendously for what you do, so keep that in mind.

Keep in mind that BD is also a double edged sword; as others here have said, the better you are at sourcing, the more likely the higher ups will want to keep you in this role. From an internal perspective, the most likely path for you would be up to director/MD of business development. While this isn't necessarily a bad thing, assess whether its aligned with your career. While I firmly believe that sales is an invaluable skill to have (period), it does pigeon-hole you from a career perspective. However, it's definitely feasible to get on the investment side of things.

  1. Network, network, network. Build relationships with other PE guys, meet for lunches/coffees/dinners, and once you have a year or two of experience under your belt, start actively speaking to recruiters, applying for jobs, and cold-emailing. I can't stress how effective a well written cold email can be.

  2. Further your education. Learn financial modeling so that you can keep up with the associates at your firm. Pick up a Masters/MBA on the side while you work, so that you have credentials to your name. Once you have something tangible on your resume (and a compelling story) that says "hey, I'm not just a BD guy", people will take note. Two other BD guys I know pursued their MBAs (executive) at an elite school while they worked, and one is working for a hedge fund as an analyst, while the other is high in the corporate structure at a financial firm.

  3. Have a plan of action. Don't just sit around and hope to transition into the investment side of things. I've seen many people become complacent with sourcing (after all, it can be lucrative), and before they know it, they're fired/questioning their career. Know that in 2 years you're going to do an MBA on the side, know in 3 years you'll have all the modeling skills required for a PE investment role, and execute.

Happy to answer any other questions you might have.

Array

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