AMA: Corporate Strategy Manager at pre-IPO tech startup

Hi everyone - WSO has been a tremendously helpful part of my career planning process over the past few years & I wanted to give back.

I've been in this role for about a year now. Previously was in equity research at a BB and prior to that management consulting at a tier 2 firm. Happy to answer any questions.

Comments (27)

Jul 8, 2017

Maybe a summary of your day-to-day to start with?

Jul 8, 2017

It varies by day/week but generally I spend 1)~40% of my time helping business unit leaders reviewing/refining/improving their group strategies and/or initiatives, 2) ~40% related to assessing new business lines, markets, products, or services - this can range from market sizing and understanding the competitive landscape to incubating these 'projects' (those that pan out and we feel good about are handed off to business unit leaders), 3) ~20% on other misc activities including C-suite requests, investor relations, talking to potential partners or acquisition targets.

Hours are great; I mostly work 9-6 with the occasional 2-3 hours of answering emails/prepping for the next week on the weekends.

Jul 8, 2017

What does your career progression (title and typical number of years to the next level) and compensation (base, bonus, and equity) look like?

And a more specific question on equity, how are you determining how much the equity is worth? Is it just based on whatever management/HR tells you it's theoretically worth? Or do you have some idea of how much ownership you have on a fully diluted basis, and can back into your equity value vs. total?

Jul 8, 2017

I have ~5 years of work experience and was recently promoted to the Manager level. I imagine the levels vary across companies but at my startup the next level would be the Director title. Promotions are very much performance driven at this point and I'd guess it would take another 1-3 years depending on how much work I put in. Base comp is slightly lower than $200K (I was making around $150K before the manager promotion). No bonus. I was granted options when I joined a year ago. Based on our current valuation last year's options are worth ~$35K.

For the equity value I did some back of the math calculations on how much I think the company would be worth X years at IPO based on some assumptions on our top line growth rate and revenue multiple.

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Jul 9, 2017

Hi thank you for sharing your background and detail of your role.
I have a question: what is the difference between stock options and equity given out by a startup?
I see some startup giving out 3000 stock options, and some gives 0.2% equity.
Will these two different when the startup confronts various situation like IPO, buyout by another firm or go bankrupt in the future?

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Jul 8, 2017

Interesting, total comp is a little higher than I thought it'd be for a Manager role. I thought it'd be closer to $160-$180k including any options, especially considering it's pre-IPO. In any case, good for you.

On the back of the envelop math. Did your employer give you some sense of the cap table? Your methodology on total value makes sense. Just wondering how do you know what % of the FD share you'd theoretically have at time of IPO.

Jul 8, 2017

Why go from consulting to ER and then back to a consulting type role? I've been interested in both in a tech focused role and would like to hear your story behind it.

Jul 8, 2017

Most of the projects I was staffed on as a consultant turned out to be operations-type engagements (e.g. evaluate sales performance, optimize manufacturing network, project manage IT implementation etc) and I wasn't really enjoying the job. On the other hand, I loved ER. Some reasons that immediately come to mind include: 1) learning about financial statements/modelling, 2) thinking about my covered companies from a strategic perspective, 3) interacting with investors and management. Although doing the quarterly earnings thing sucked, I enjoyed following the markets and finding out when I was right or wrong about a company at least 4-5x/year (earnings + sometimes during investors days).

Honestly I don't have a great reason for the back and forth. I ended up leaving ER because over time I became increasingly bearish about both the investment management industry and sell side's long term prospects. I figured I had skills that would be valuable in the corporate strategy setting and wanted to re-position myself in tech. My current role is a lot more interesting than my initial consulting job so I'm happy and we'll see what happens down the line.

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Jul 9, 2017

What is an example of your value add to business unit leaders, etc.? What do you tell them that they don't already know?

Jul 8, 2017

In most cases I'll look over their plans/team's analysis - an extra pair of eyes. Most of the business unit leaders at my particular startup are product guys with engineering + MBA backgrounds and ask our team to help consider the bigger picture (i.e. try to map out how our competitors or others in the industry ecosystem may respond to certain initiatives). I also spend a fair amount of this time analyzing financials and deal structure for major partnerships or sales.

Jul 10, 2017

How did you find your job? I'm in a corp strat role at a F500 but want to make the jump to a start up.

Jul 8, 2017

I just applied directly on the company's website. I did this with dozens of companies and heard back from ~10-15% of them.

Jul 10, 2017

Thank you for doing this. I'm currently in vanilla FP&A and have had trouble leveraging my IB and internal consulting background into a Strategy/Corp. Dev. role.

What did you find were your "big breaks" in making a change between significantly different industries, and what did eventually getting in front of your current employer and pitching the value add ultimately look like?

I'm thinking of going back to get my MBA out of a top 15 program. Do you think this is enough to pivot into a Sr. Analyst/Manager role, or would I need to slog through 3 years as an IB Associate to get a serious look?

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Jul 8, 2017

While I didn't have a 'best in class' MBB or IBD background, I pitched myself as an 'one of a kind' candidate given that I 1) still had both consulting and 'front office' BB finance experience (i.e. dual set of skills), 2) could provide a lot of value setting up the company narrative during the IPO/roadshow process, and 3) am able to evaluate strategic initiatives as public market investors would (given my ER perspective).

I'm fairly certain that you would be able to transition into corporate strategy from a M7 school. Not as sure about top 15 but would guess that shouldn't be a problem.

Jul 10, 2017

Did you cover tech in ER? If not, then how did you get caught up to speed on your space and more specifically your company's products/strategy?

Jul 8, 2017

I didn't cover tech. I did a lot of research (i.e. read our tech analyst's notes) on general tech trends/major drivers and also focused on the specific markets that the companies I was interviewing with operate in. It took a lot of reading and synthesizing - but I'm used to that / enjoy it given my ER background.

Once I joined my current company I spent a lot of time in the first 1-2 months getting up to speed - it was less work than going through a sector initiation process in ER (because I didn't have to write reports/create models but just take notes for myself).

Jul 10, 2017

Obviously, IB/MBB experience is ideal for getting into corporate strategy. Are there other backgrounds you've seen for getting in as well or what would you/a manager see as favorable experience for someone interested in the job?

Jul 8, 2017

Our team also looks at folks at tier 2 consulting companies, equity research, and people with top MBAs + relevant industry background (usually in partnerships/business dev roles)

Jul 11, 2017

This has been very informative and inspiring. I contemplated recently making a similar transition and instead moved to another bank in ER, though I share the same concerns as you as to the viability of sellside ER/investment management long-term.

My questions are as follows:

1) I now make enough money on the sellside that the only logical slot in for me would be at the manager level. I already cover a specific technology vertical on the sellside. Should I make this move going forward, would direct industry experience within that specific technology vertical be imperative for the move? For example if I write research on software, to make a manager level move, do you think that naturally limits you to companies that produce software? I'm thinking that management viewed you as more fungible given your associate-level slot in. I am orried I wrote off a future similar move for my career options by staying in sellside ER.

2) Who do you think your competition was when you were interviewing? Bankers? Would you say the company you went to was a Tier 0 (Uber, AirBnb, etc) pre-IPO company? If so, was there more competition as a result? Or did you land somewhere with less competition, and maybe wasn't as well applied?

3) did the level of your bank matter (bulge bracket vs. not)?

4) You've talked about this more a bit up there, but how did you "sell" the best parts of your equity research experience? Or do you think it was more your consulting experience that landed you the job? I'm very surprised you landed a gig in tech without actual sellside tech experience.

Thanks hope that wasn't too much from a questioning perspective!

Jul 8, 2017

1) I would agree with your statements. I also interviewed in corp dev/strat type positions within my ER industry vertical and found it much easier to position myself at the manager level.

While considering industry vs buy side I also figured that if my end goal was to be in industry (given my bearish outlook on Asset Management in general) I should move sooner rather than later as the analytical skills I'd develop in research only go so far in industry since I'd also need to demonstrate management/'cross functional leadership' skills. If you aren't able to join a company as a manager you could probably come in at the senior associate level with a soft guarantee of a quick promotion in 6-12 months.

2) This is a great question. At the time I joined my company was valued around $1bn (i.e. not a mega pre-IPO startup). I was up against 1) corporate strategy & BizOps folks at large, mature, non-FANG tech companies, 2) tier 2 management consultants, and 3) IBD associates (both BB and MM) that were direct promotes from the analyst level (i.e. no post MBA associates). Looking back on my interview process I actually did well with start ups valued ~$1bn but did not get any offers from the mega pre-IPO startups or FANG-type companies....so...perhaps the competition was a lot higher at that level.

3) Having the BB name on my resume probably helped with getting the first interview but I don't think it made a major difference afterwards.

4) I actually think it was more the research experience. Without any actual tech background I tried to position myself as a really smart guy who could pick up a new industry and get to know it inside-out fairly quickly. I spoke a lot about being able to evaluate strategic decisions from an objective perspective and think like public market investors - an unique 'voice' compared to the typical banker or consultant.

Jul 11, 2017

Appreciate the response! I'm in a tough spot. No mba, a bit young for manager slots but it's the slot that makes sense given my compensation. If I slotted in at senior associate it would likely be a pay cut short of stock skyrocketing or a tier 0 type co offering a bit more pay. But something to consider given outlook of the industry as you mentioned.

Jul 15, 2017

I'm curious how you transitioned from management consulting to ER at BB? Based on the projects you mentioned, they didn't seem model heavy or PE driven. Did you use a recruiter to get you in the door?

Thanks again for doing this!

Jul 8, 2017

I was lucky. My background (top undergrad, mgmt consulting experience) was enough to get through the initial screening process. I studied finance/accounting questions for technical interviews and basically convinced my analyst that I would more than make up for my lack of finance experience with hustle and work ethic. Most ER analysts passed on me but all it takes is that one guy who is willing to take a chance!

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Jul 15, 2017

Very nice! Thank you SB+!