AMA: Non-target --> 2x SA at BB --> FinTech Corp Dev --> Corp Dev at a large company

LukeWarmBanana's picture
Rank: Baboon | 112

Hello everyone,

A few months ago I came to this board with a really tough dilemma and you guys helped me see it through. I now want to pay it forward as I know that people are getting increasingly interested in corporate development/ corporate finance.

Here is my story:

I studied at a non-target school in Europe and partied throughout most of my undergrad. During the time I spent there, I did 4 internships in completely different industries, with 2 being at American BBs. I got FT offers for both, but was not interested in S&T, so decided to accept a Corp Dev gig.

It was a small team doing lots of tech stuff, and I found myself at the hottest corp dev team in town, getting lots of responsibility and running more deals than any IB/PE shop around. Calls poured in from various headhunters, and they were tempting as I still wanted to try the M&A advisory side of things. Eventually an offer came in from one of the hottest EBs and I decided to accept. Since I never had any formal training in corporate finance, this was my chance to leverage my deal experience and to really strengthen all the training I forewent.

While serving my notice, I got a call from a former boss (one of the 4 internships from undergrad), asking me to join their M&A/ Corp Dev team in a relatively senior position. Now, this company had grown to $200bn+ in market cap, and the overall package was really attractive vs what the EB was offering.

It was such a tough choice as I was so proud of landing the EB gig, and also I did not want to ruin my chances of getting the PE job I knew (thought) I would get at a megafund or leading VC. I was also afraid of the reneging process, what not being in IB would do for my learning/ career, and that I would create an even larger skill gap for myself. With the guidance of this board and my mentors, I chose the Corp Dev gig. Hands down the right choice - I could not be happier in my current role.

Please feel to ask me any questions about the prep process, recruitment, job specifics, reneging, adapting to a role you are not qualified for... I will try to answer to the best of my ability.

LWB

Comments (34)

Apr 16, 2016

congrats :)

what sort of relationship is there between your Corp Dev team and bankers? do they pitch ideas to you and then you guys both come up with valuations to make sure same ball park, or whats the process?

what background do the people more senior in the Corp Dev team have? my Corporate is quite acquisitive and whilst the junior people have quite a bit of M&A background, the more senior ones have qutie a bit of an FP&A one...

have you done any of the BIWS / WallStreetPrep /macabus type training and do you feel its enough? anything youd particularly recommend for those wishing to make jump to CorpDev but without M&A background on the assumptions that deal structures / complexities etc aren't the same as in IBD.

also - yes, how do you best adapt to a role you feel you're not best qualified for? i've recently joined a new role and most people here before me seem to have had much more experience and many flunked out. i'll be going over the "handing over" process next week but apart from taking lots of notes and asking any potential questions, any advice?

thanks!

Best Response
Apr 16, 2016

1) what sort of relationship is there between your Corp Dev team and bankers?

In the tech/fintech job it was very special since we viewed the BBs and EBs as the ones we brought in only on special occasions (they worked a lot with the sell-side), and we tended to hire more specialty boutiques. The head of M&A also gave us the leeway to develop relationships with the bankers, so we each held different conversations to keep a finger on the pulse of what is going on. This was very fun as our junior guys all had senior bankers wanting to be their best friends.

We also did a lot of the work ourselves since we were churning so many deals. The modelling was all in-house (validated externally if a larger deal).

With the larger corporate I feel that the relationship is completely different. We now do very little of the modelling and mostly sit in front of dozens of banks who pitch different ideas. Because of the valuations we spend a lot of our time validating business cases and making sure that we can execute on the integration plan. The stakes are also a lot higher here for banks and they value our relationship massively.

2) what background do the people more senior in the Corp Dev team have?

I would say that a lot of our senior guys come from a finance background (FP&A). This is because they are well positioned to learn about what drives the business and they make killer M&A guys when they get good at it.
We do have some former bankers who come in at post-MBA level, but these guys usually enter on the same level as someone who did built themselves up for a few years at the firm. There is no "banking premium" awarded, but these guys are extremely good at picking up new information so they often get promoted quickly.

We also have lots of MBBs and lawyers. They are invaluable in the legal negotiation and DD phases!

A key lesson I have learned here so far is that there is a massive reward for tenure in this organisation (holds true for all of our previous acquisitions and competitors). Most senior guys who are in any strategically important function will have 15-20 years of time. I am not saying that you can't be hired externally at a very senior level... but we will always look internally for talent to bring to the top since these guys know the industry inside out.

3) have you done any of the BIWS / WallStreetPrep /macabus type training and do you feel its enough? anything youd particularly recommend for those wishing to make jump to CorpDev but without M&A background on the assumptions that deal structures / complexities etc aren't the same as in IBD.

Corp Dev is extremely adhoc and like PE or VC, a lot of the things you end up working on are unprecedented. All of the resources you have listed will give you a good technical base but this function is much more about being able to do run M&A from a strategic point of view and to manage the process internally. My former boss always used to tell me "no matter how good your models are, you won't get any deal to fly if you can't get the buy-in of each workstream lead". For example, we will get the bottom up figures from the sales guys, build a model around that, then feed that back to the different units for review, adjust the model...

It will all depend on the nature of your team as well. I have colleagues who are not extremely technically inclined but they are superstars in our team. They can build a few models if they really want to, but they won't make you a flashy LBO each time you are running a transaction. The only advice I can give here is: become more plugged into your industry/ adjacent industries than anyone else around and you will kill it in your job.

4) how do you best adapt to a role you feel you're not best qualified for?

Not being best qualified is different from be under-qualified. You can always rise up to the challenge, and I am a firm believer that you should always be vouching to deliver what is slightly beyond your current capability level. If you were hired into a role, specially at a junior level, it is because they see potential and not necessarily immediate result. Therefore, don't worry about being perfect on day one - really focus on asking the right questions during the handover. I would try to absorb as much knowledge as possible but more importantly, try to get the person to teach me how I can go about learning the rest on my own (resources, training, other people to speak to...)

It is ok to be under-qualified so long as you remain humble and dogged.

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Apr 17, 2016

What's been the most rewarding part of your job so far? In the long run, are you're goals to still try to make it into VC/PE or try and climb the corporate ladder to the top?

Apr 17, 2016

I am assuming you are still working in Europe since you studied there. What's the background of the people in FP&A? Mainly Big 4 or did they start as lowly financial analysts and moved their way up. I know it's not entirely related to your story here but I am still not sure if corp dev or corp finance(i mean FP&A) is the way to go for me personally.

Thanks and congrats!

Apr 17, 2016

5) What's been the most rewarding part of your job so far? In the long run, are you're goals to still try to make it into VC/PE or try and climb the corporate ladder to the top?

The most rewarding part of it is the variety of the work you do. A lot of guys get pushed out of corp dev into other parts of the business so that they can gain expertise and/ or run a whole business unit. It is also a phenomenal feeling to be part of a closely-knit team of people making buy/sell decisions for a company that essentially is a leader within its industry.

My favourite part of it is the purchasing process and adding to our portfolio. It is a great feeling when you make an addition to your balance sheet and you know that it is a long-term play. We recently made a small acquisition of which I will be taking responsibility over seeing through its integration and then steering it strategically to deliver on the business case. I will work alongside a former CEO and founder who is ecstatic about having gotten an exit, but who is also dead set on continuing to grow his "baby".

I want to see where this place takes me. I think that we are not done growing so many opportunities will open in the short/mid term. I don't plan on making my way to VC/PE anytime soon but it is a possibility and find comfort in knowing that the more time I spend here, the more valuable I will be to those firms should I want to make a change in the future.

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Apr 17, 2016

6) What's the background of the people in FP&A?

This is very varied. Some of them came in as finance analysts and others made their way from M&A, Treasury, Big4...

As I said, the team is extremely varied and it really isn't for everyone. At a low level you are unlikely to receive the same level of training as you would in a bank (technicals), but you will get a much broader base (some technicals, legal, negotiation, DD, capital markets...).

On progression - people rarely move up linearly within the team. The guys who come at senior levels were often analysts/ managers, then get given their own project to run with and return at director/VP level to lead corporate development for a country or region.

Apr 17, 2016

Thanks for doing this LWB! Could you talk about your daily responsibilities (day in the life) and those of each level? (i.e. Analysts vs those with 5 years etc

Apr 17, 2016

Thanks for doing this - really have enjoyed hearing about your experiences. A few questions coming from the perspective of someone about to start an MBA program and is interested in ultimately landing in Corp. Dev.

1) I don't have any pre-mba finance experience (did Big 4 consulting then F500 Corp. Strategy), so am I correct in assuming that I have little chance of landing an attractive Corp. Dev. gig without first paying my dues in banking (or potentially MBB)? If Corp. Dev is my ultimate goal, how would you think about the decision to pursue banking vs. consulting?

2) For those transitioning in from consulting or banking, how important is industry alignment? Does your group only recruit bankers or consultants with extensive deal/project experience in the industry you are in? Do you have any particular insight into the types of opportunities available to Consumer/Retail coverage bankers?

3) How does compensation look for those transitioning into Corp. Dev? If I came over as a 3rd year banking associate, would it mean an immediate step back in total compensation, or just a slower trajectory going forward? What seems to you to be the ideal point to make the transition?

Apr 20, 2016

Hey @wanna b MBB" - the OP is crushing it and I definitely want to let him keep passing on info, but wanted to chip in on your question 1.

I'm a 1Y at business school in the U.S. (M7), and was not in IB prior to business school. I was able to get corp dev offers at large (think Fortune 25) companies straight out of business school, so it's definitely possible without extensive finance experience. I worked in a "finance" light consulting role prior to business school and completed CPA / part of the CFA program so interviews weren't terrible, but I definitely don't think you need extensive finance experience for most corp dev programs - your corp strat role will be as / more applicable on the other side.

Apr 20, 2016

I agree with this. We have several post-MBA hires who come in from a wide variety of backgrounds.

Finance usually helps but the skill-set a consultant can bring is also valuable. As you said, you often get light exposure to finance anyway so it is easy to bring people up to speed. Strategy experience is highly prized amongst my colleagues.

Apr 17, 2016

7) Could you talk about your daily responsibilities (day in the life) and those of each level? (i.e. Analysts vs those with 5 years etc

The strategy and corp dev teams have a lot of overlap so a lot of our senior guys act as internal consultants and leaders during large strategic projects. The analysts tend to get their hands on a lot of the material produced by banks, checking for errors and reaching out to the relevant work-stream leaders to validate the entire proposal. The process is often twofold when looking at a potential acquisition - we will either get tipped off my banks or C-level execs who hold the relationships, or it will be a proactive process where we need to spot an opportunity and build a case around it for approval from the people who hold the company's purse.

Though analysts won't do as much grunt work as a banking analyst would, you are still there to do some of the heavy lifting and refine your knowledge of the industry. The more senior guys tend to float a layer above that, though they are not afraid (at my company at least) to roll up their sleeves and get cracking on work with us, lower/mid management.

Apr 17, 2016

8) I don't have any pre-mba finance experience (did Big 4 consulting then F500 Corp. Strategy), so am I correct in assuming that I have little chance of landing an attractive Corp. Dev. gig without first paying my dues in banking (or potentially MBB)? If Corp. Dev is my ultimate goal, how would you think about the decision to pursue banking vs. consulting?

I came straight out of undergrad and was able to make it - albeit with some degree of luck. I think that it is possible to lateral into corp dev if you are in strategy, finance... it all depends on how you build your internal network. Different companies will have different views on recruitment. We will take talent from within, but we have competitors who are keen on pulling talent straight out of one specific BB and a very well known MBB in this sector.

I think corp dev often happens to you as a product of your enjoyment for corporate finance and strategy. Whilst banking is often attractive because of the money, prestige, opportunities... corp dev is all about the process and really enjoying this line of work. Banking will give you a good overview of the M&A process (if you end up there) and will make switching to a corp dev role a breath of fresh air since you will feel like you are actually actively involved with the decision making process. Consulting is also a viable option though we are less inclined to view the associated skill-set as what we look for in a new hire. The perfect corp dev guy is a banker/consultant/accountant/lawyer. Instead of looking into separate disciplines, I would look at studying the highlights of each part of the process so that you really get it. I.e. if you work at a bank, don't be afraid to read the Sale & Purchase Agreements from back to back and ask where the M&A lawyers are really driving value from the legal negotiations.

9) For those transitioning in from consulting or banking, how important is industry alignment? Does your group only recruit bankers or consultants with extensive deal/project experience in the industry you are in? Do you have any particular insight into the types of opportunities available to Consumer/Retail coverage bankers?

Industry alignment is very important as it is this expertise that will draw you to a position. Having said that, it is less important at junior levels and you can go to a different industry if you prove that you can adapt. My suggestion would be to speak to recruiters that focus on Corp Dev (an increasingly important niche for the big recruitment and specialist recruitment firms). Lots of opportunities for consumer/retail focused bankers... there is a lot of consolidation going on and companies are expanding their corp dev and strategy departments. It is all about getting in the front of the right person. If you want to end up in corp dev though, I would say that it is better to make the move as soon as possible after you feel like you have peaked on the banking learning curve. A 2nd year analyst can join us as a senior analyst/ manager, but an associate can also join on the same level. The earlier you start to build yourself up, the better the title/comp progression.

10) How does compensation look for those transitioning into Corp. Dev? If I came over as a 3rd year banking associate, would it mean an immediate step back in total compensation, or just a slower trajectory going forward? What seems to you to be the ideal point to make the transition?

A senior analyst/manager (3-5 years experience) will get the same level of comp as a 2nd/3rd year analyst (all in) and more cash less bonus. I think corp dev falls behind in comp when you hit associate level at the bank, but in terms of market worth, our value sky rockets. 6-7 years experience at a corp dev role will get you calls for VP/AD roles at banks growing their industry coverages, and at this stage corporates tend to hike up your pay with options and all kinds of LTIPs to lock you in.

If you are an associate and pay is important to you, you will feel a pinch when making the initial transition. But then again, if you are killing it at your job, the corporate will often match/ surpass your current comp and give you tonnes of perks. My view of total comp changed drastically when I decided to take the corp dev gig over the EB.

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Apr 17, 2016

Btw - you won't be making MD level dough until you reach VP level (VP is like when you become a partner to the business - in corporates this is the highest level you achieve before getting to C-level positions and there are various levels of VP. You can be a regional VP, department VP, global VP...)

Apr 17, 2016

Congrats on the success thus far, seems like you made the right choice. How were you able to find these opportunities - was it mostly through headhunters? I ask because I'm in a post-MBA Corporate Strategy/Development role at a large public fintech firm and have had very few headhunters reaching out to me - most don't even respond back to my emails! I'm not in a major city like New York or San Francisco so that may be a big part of it.

2nd question:

Did the banks give you any grief for trying to move back into IBD from Corp Dev? I've talked to a few bankers who were questioning my intentions of not having taken a full-time banking offer after MBA and going into corp dev instead.

Apr 18, 2016

Thanks and congratulations. really have enjoyed hearing about your experiences. thanks for sharing it,

Apr 18, 2016

Thanks everyone for the kind words!

11) How were you able to find these opportunities - was it mostly through headhunters?

I entered the FinTech space when London was starting to get a lot of activity in this area, and it became specifically relevant for the business I was in. At that time, our corp dev team was moving quickly and ripping through deals, so several PE houses had eyes on the analysts. It was more of a product of luck and timing than anything else. Also it does help that headhunters in London are super vicious.

I stumbled onto this opportunity by luck. Since I declined the S&T job and the bank refused to put me in the IB analyst programme, I decided to join a highly acquisitive corporate instead. There is immense value in keeping up with the networking efforts (as during the pre-FT offer phase) 2-3 years after you start. It also helps you to keep on top of what is happening in the job market, and eventually you find something interesting/ suitable. For me this was all done through referrals or direct hiring from people in my network. A lot of Corp Dev jobs tend to be filled on this basis.

12) Did the banks give you any grief for trying to move back into IBD from Corp Dev?

The people who know me well tell me that this company is perfect for me, and that there was no other choice of a career that would have made sense. I did get few chuckles and comments when I first announced it to my network/ friends. Some were very much on the IB bandwagon (I was too), and they thought I was insane for going to Corp Dev. When they found out more about my role, the comp, the progression... almost all of them added it as a potential exit from IB if the grind continued (it did).

The EB was ecstatic to have me on board as I was bringing in expertise that was quite rare amongst their analysts given the types of deals I had been on (at least they thought - I still feel pretty ignorant :) ). The MDs were very keen to have me as well, but they were also supportive when I decided to renege as they knew that I was going to be working with a large client.

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Apr 18, 2016

Thank you very much for your AMA!

As an incoming SFA in CF at a BB in the states, would you recommend that I stay in CF for 2 years if my goal is to transition into corp dev? Or would going into IB make me a more attractive candidate?

Apr 18, 2016

13) As an incoming SFA in CF at a BB in the states, would you recommend that I stay in CF for 2 years if my goal is to transition into corp dev? Or would going into IB make me a more attractive candidate?

CF work (depending on the function) will usually come with a broader skill-set that is more relevant for corp dev. We are talking here about really getting dirty with all the financial statements and doing things like dividend analysis, WACC models... Having said that, being in IB will likely raise your profile more in the short-term given your exposure to headhunters and to corporations/ other banks/ buyside etc...

I come from a CF background and I definitely have an edge on the IB guys who join (though they are better in some other respects like pitching ideas and getting their own projects to fly). The guys that really get a lot of attention here within the organisation are those with solid CF/M&A background and who are very good on both the legal and accounting side of things. Most have accounting certifications.

In summary, it is more about the type of work you are doing.

Apr 20, 2016

Great thread.

How do you go about sourcing ideas?

How useful do you find bankers in this respect? In general do you approach bankers yourself or is this left to the senior guys?

Would you generally have an intro or would you ever cold call a banker? Seems a bit counterintuitive but bankers can be very useful in sourcing ideas (especially if corp dev team runs lean) so interested how this works in practice.

Apr 20, 2016

14) How do you go about sourcing ideas?

It really depends on the size of the deal. In tech we had extensive databases keeping track of which firms we could add to our portfolio to stay competitive. We often liaised with strategy to validate some ideas, and if it was plausible we would request a meeting with the other side or with a bank.

A lot of ideas also came in from our department heads (actually the majority of ideas did). They have had long-term relationships with the the CEOs of other firms and, therefore, these are often the most successful deals. It starts with a conversation they have at the gym/bar/office... and it reaches us in corp dev if they decide to formalise the process and put it up for appraisal.

The bankers and big 4 come to us all the time with ideas, but these very rarely materialise. This is because at this stage the potential target is already up for auction and the multiples are way beyond what we are looking to pay (not a bad idea, just not the right price). The exception here is where the bank has had a strong relationship with us in the past and they identify that we are a prime strategic buyer. In this case we are given the opportunity to negotiate exclusivity early on.

15) How useful do you find bankers in this respect? In general do you approach bankers yourself or is this left to the senior guys?

I would say that the larger shops are not nearly as useful as the more specialised advisors since they churn so many deals. Hence, it is hard for them to hit the nail on the head. Having said that, they are extremely useful to my firm as we are leaders in our market and they do a lot of free work for us like free analyses, industry reports... We absolutely need the larger banks for larger deals due to the resources they can bring to the table.

The senior guys in the team who did M&A before have their own relationships with senior bankers and they carry this for life. These are the really high level deals that are highly sensitive and really stay under the radar. Though I don't approach the bankers (it is in their interest to approach us - especially in a big financial centre), I am the relationship "guy" for several MDs and VPs. My colleagues each have their own relationships and we tend to divide this.

The exception to what I mentioned above is when we are running an acquisition in a new geography. In this case we either ask for an intro by HQ to the local advisory team, or we set up a string of meetings to get to know all the advisors around. This is the best way to understand the local market conditions and confirm some of the assumptions behind the initial idea.

16) Would you generally have an intro or would you ever cold call a banker

As I said they often call us as they know we are always running deals. Plus, the better the relationship we develop, the more likely it is that we will use them should a blockbuster deal happen.

Indeed, the bankers are our friends. We try to do as much as possible in-house since we have the analytical capability and weight to do it, but we absolutely need advisors when the deal gets complex or reaches a certain threshold.

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Apr 21, 2016

Not to be crass, but what does a corp dev salary look like?

I'd rather die than be average and chances are I might

Apr 21, 2016

17) what does a corp dev salary look like?

Short term it will depend on what you negotiate going in as they will often match your total comp coming from banking/consulting and give you several other benefits. If you build yourself up from within the firm, then I expect you to be earning 20-30% less than bankers at junior levels (perhaps even less at associate level).

There is a great equaliser when people reach director/ VP. This is when you get paid in equity and you easily make $300-600k to start of with. People rarely stay in these positions very long as they are often placed to lead a region, department, or to take on a role close to the c-suite.

The following is purely based on anecdotal evidence and what I have gathered so far:

(1 year experience) Junior Analyst: $60,000 - $90,000. This is slightly above the salary of graduates who also did direct entry into other functions
(2 - 3 years experience) Analyst: $90,000 to $130,000 depending on personal performance and company performance
(3 - 6 years) Manager: $120,000 - $200,000
(6 - 10 years) Associate Director: $180,000 - $300,000+. This is a weird position since you can come into AD as an associate (bank), from post-MBA, as well as 10+ years of experience in other areas of the business
(10 +) Director: $300,000 - $600,000. These guys also vary wildly in age. Some guys will stay here and not gun for VP. With tenure they can rake in a lot of money.
(10+) VP: $400k+ No one makes VP with less than 10 years experience, but you can get fast tracked here if you are very good and have a bit of luck. I know VPs in their early 30s (don't confuse the corporate VP with a bank's VP). The VP is on par with an MD/partner that has held his post for a while.

As you climb the ladder, 1-2 levels below C-suit comp can jump to >$1m easily.

What is beautiful about the place I work in is that it is growing very quickly and I don't need to abide by the rules of this hierarchy. I have seen people go from 8 months as a manager straight to AD, then Director within 3 years.

Apr 27, 2016

Thank you for all the valuable insight and congrats on your progression so far! Definitely one of the best AMA's in relation to Corp Dev.

Apr 28, 2016
kenneth635:

Thank you for all the valuable insight and congrats on your progression so far! Definitely one of the best AMA's in relation to Corp Dev.

No problem! It is a huge pleasure to be doing this. One day I want to mentor/ coach someone junior to me so getting my rhetoric right actually does help!

General comments not related to any of the questions you posed:

Being in Corp Dev means that you will adhere to corporate performance systems, processes, hierarchies... it is true that we are technically the "buy side" but you should know that at the end of the day - you are a numbered resource, following a framework of targets set by the c-suite, adapting to a unique culture, and having to put up with the bureaucracy that comes with it. Yes banking will be bureaucratic in its own ways... but so is every other shop in town. Corporate or not (even start-ups...).

I have spoken very well of Corp Dev but knowing the negatives is important:
- Training will not just land on your lap. You need to negotiate and fight for it
- You need to fend for your own position as a strategic pillar in the firm. Everyone wants to do big things in their own departments, but you need to make it clear that you are the floodgate to inorganic growth. Relationships get very heated sometimes when this needs to be openly stated.
- Hours can be a lot worse than banking. If a deal is on - you are on. Hours can also be super chill... if there is nothing urgent, wear your jeans to the office and catch a 5pm happy hour somewhere in town... this seems to be a rare scenario but it does happen.
- Recruitment becomes sector focused and it is harder to sell yourself as a generalist.
- MBAs will need your story to be airtight if you want to have a shot of getting in. Your storyline needs to make sense and you need to have a grand vision (a GS guy may not need to do this - it can be looser).
- Pay... oh pay... you won't become a billionaire.

I would like to ask those who are interested to also explore the downside of things as much as the upside. There is no right or wrong career. Everything is a trade off.

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Apr 22, 2016

Hi Luke, thank you so much for doing this!

I'm a raising junior and very interested in getting in to a tech company. Since I'm not interested in the traditional IB/Consulting paths, I want to go into tech industry after graduation. I have some questions:

1, What are the major differences between going into CD and into FP&A analyst type of rule right after graduation? Is going into CD much harder than FP&A?

2, If my goal is to get into CD after graduation. Should I spend my junior summer in IB, or should I do a corporate finance internship at a tech company?

3, What is the path from CD to product manager like in your company? Do people from finance role often go to product management?

My ultimate goal right now is to become a product manager, because I really believed that a good tech product can fundamentally change our lives. Thank you so much in advance!

Apr 27, 2016

Hey, sorry I have been absent - crazy week(+end) at work. Yes the hours are better than banking, but if a deal has to get done, it has to get done.

  1. What are the major differences between going into CD and into FP&A analyst type of rule right after graduation? Is going into CD much harder than FP&A?

The roles will have some overlap as the FP&A guys will need to be acutely aware of the M&A agenda when running budgets and internal processes. We work very closely together, and are actually part of the "Finance" department. Some companies will have them separate (Corp Dev closer to strategy or as another corporate function), but the work is aligned.

Going into FP&A there is a very specific set of skills that they can train which will allow you to run both BU and adhoc processes smoothly. Corp Dev taps into many more capabilities, and is therefore more demanding in terms of qualifications. If you did make your way to Corp Dev straight away, you would likely be doing very low level work as these teams run lean and training resources will either be external or left to you (self-study). With this logic, and from my personal experience, yes - CD is harder to get into than FP&A straight away.

  1. If my goal is to get into CD after graduation. Should I spend my junior summer in IB, or should I do a corporate finance internship at a tech company?

Having IB experience prior to joining CD is a big plus. corporate finance would add just as much if not more value since it will be more relevant to your role. No one expects you to be an expert from day 1 but if you have a record that proves you have what it takes, then you will stand out from the other guys.

Having a CD goal prior to graduation is a little tricky as you really need to feel passionate about a sector and company. As a student, most aren't able to define this quite yet. IB/Consulting does give you a broader foundation to jump to all kinds of industries.

20, What is the path from CD to product manager like in your company? Do people from finance role often go to product management?

We rarely have guys going to run products. We might have some revolving door with innovation and some product groups, but it is rarely from/to highly technical product roles. There are exceptions (i.e. some engineers who joined the deal team to help buy a fintech firm but who were so good that we decided to train them as M&A guys).

Think about it this way - product development and finance are almost antagonistic. We want to cut resources and make everything run lean, they want to use up resources and go to innovation town. You have a sweet spot in the middle where the finance guy has a technical background and can keep the other guys grounded, but otherwise some firms even resort to separating offices/ isolating each altogether.

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May 1, 2016

@LukeWarmBanana - i assume your CD /CS team works closely with your FP&A team just as our one does too and you guys have requests etc going each way and some collaboration. In your opinion how do you think the CD team would react if an FP&A analyst would begin offering his services as help? Not like all day, but often i find that the team all goes home around 6-7 and i think the CD /CS guys stay later, if at those "after work" hours they were approached and help was offered, do you think it would be "kosher"? their team is quite small (although bigger than ours) and it wouldnt be a "cold" approach really as we have close interaction. im also thinking that perhaps the best approach would perhaps be to initiate contact via networking at company events with the more senior people and mention financial modelling training that i have undertaken and perhaps ask them for advice if they haev any suggestions on how can improve skillset in this area / hint that i have created some models of my own for potential acquisitions and for them to have a sense check of what they think some time (and hopefully this might lead t them throwing some work my way). thanks for advice.

May 4, 2016
  1. In your opinion how do you think the CD team would react if an FP&A analyst would begin offering his services as help?

We do work very closely with the FP&A guys as we are a large business so we rely on them for a lot of things. The interaction tends to happen in the mid-seniority level as the younger guys would not be able to collaborate to the level required without supervision, and the senior guys are more interested in the final product. Having said that, my team is extremely popular with the 1st/2nd years of the FP&A team as they perceive us as being the "sexy" M&A guys doing the stuff behind a wall of secrecy. When they approach us offering help, we are always more than happy to do some basic coaching and get them looking at some of our work. This is because there is a natural corridor between their team and ours, and they can really help with some of the grunt work.

You need to consider many things when deciding whether this is a good move. Firstly - is there a strict firewall around the CD guys? If so, this becomes more difficult due to "insider lists" and all that stuff. We are very open at my company so this does not cause issues unless we are doing something major.

I think it is always safe to make it clear to your boss that you want to develop a skill-set in that area and that you are willing to put hours on top of your current workload. This will actually help your boss. Having said that, you need to be careful not to let the CD involvement ever get in the way of your duties. If you do that, then you can burn yourself pretty badly with both sides.

Clean breaks and moving laterally also work without all of this schmoozing. If the CD team is understaffed and you know there is a position open, they will almost always try to fill that internally to save on recruitment costs. Jump on that opportunity.

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May 4, 2016

Hi Luke,

Thanks a lot for your answer! I really learn a lot from your response and I have some more for you.

I was wondering in a tech company, what other finance roles are revenue generating besides corporate development/M&A? I get the impression that finance is often considered as the "back office" in tech firm and does not get much respect. Do you find it true?

Could you also share some insight about the long term career path for people in CD? Do they mostly stay within CD or do they usually move to other departments such as sales, marketing etc?

Thanks a lot! I'm a raising junior student at a TOP 20 and really want to start my finance career in a tech firm, but I can not find that many information about this path. Much appreciated!

May 6, 2016

22) I was wondering in a tech company, what other finance roles are revenue generating besides corporate development/M&A?

It really depends on the company but as I mentioned earlier, sometimes you have special project teams that are ring-fenced from the rest of the organisation and bank on people with technical backgrounds who can do M&A/ Business Dev. These teams have their own finance and M&A guys as we do not want their "creativity" to be polluted by the bureaucracy of the organisation.

Finance tends to be back-office indeed but you should not neglect the importance of having a stint in an area of the business that controls costs and runs the financial plan. Here you learn what the firm is really made out of and you become very useful in the integration and strategic planning process.

23) Could you also share some insight about the long term career path for people in CD? Do they mostly stay within CD or do they usually move to other departments such as sales, marketing etc?

My company will push guys from CD onto other functions quite often. This is because these guys become very good at leading projects and understanding what needs to happen when converting the synergy promises made to the market. CD is also multi-skilled so you are more than welcome to lateral anywhere in the firm, especially at mid levels.

Externally CD, in my humble opinion, preps you better than consulting/ IB/ Law, etc for industry specific PE/VC and sometimes even start up. We lose so many guys every year who go on to become founders. The extremely good people get so much attention that they will often move elsewhere, only to return to a very senior CD position. Unlike the tried and tested waters of IB, CD is less convention-based and it isn't like you can't come back once you went to the buy-side. As I said, however, don't forget the power of tenure. I plan on staying at this firm for decades if the job remains interesting. I will move geographies often, have new challenges, and might even have a shot at being CEO. Also, I am likely to earn anywhere from $2-10m if I get to C-level and we continue growing at the rate we are.

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May 4, 2016

Thanks for doing this. Could you please touch on the corp dev interview process?

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May 6, 2016
  1. Could you please touch on the corp dev interview process?

For full disclosure, I never went through the official process. I went through a series of conversations (informal), and was hired based on recommendations. I did however speak to the head of M&A, several VPs and some of the more senior guys too. They were all framed as "AMA" sessions but I am sure they evaluated me on this basis.

I think a lot of the recruitment in CD is done in this way because we often require a specific set of skills or someone with a specific personality type. Personal recommendations have a lot of weight for this.

Let me give a few scenarios of how the recruitment/ interview process can play out (from what I have seen).

A) Headhunter/ recruiter:

This tends to be the last resort unless we are hiring for a very senior position.
The HH will vet a series of people who have attractive profiles and give us a list. We will then shortlist 10-20 we are really interested in, and the details of the job/ potential benefits will be released to these candidates.
The HH will maybe interview/ chat with the candidates and pick 5-10 we will continue interviewing internally. At senior levels, we often have the CFO and other executives perform the interviews. At mid-manager levels we will have 1/2 senior managers and at least 2 VPs. The interviews don't tend to be technical and are heavily focused on past experience and fit for the company/ situation at hand.

Once we get down to 2-3 candidates, it is usually up to the most senior person involved in the process. My boss was hired directly by the CFO, for instance.

B) Direct application:

This follows a similar process as above but the level of people involved is usually more junior (also because of the nature of the people it attracts). I have been involved in telephone/ first rounds several times, and usually screen people based on recent deal experience, performance/ recommendations (is an MD backing the application? etc), and other intangibles. I am not going to lie - if I see a guy/ girl I know will have fun in the team and work hard in tandem with us, that is a huge plus. Also, though I am ashamed of this, education/ institution bias is a real thing.

Anyway, after the initial interview, the process above is followed. For junior ranks one VP interview will usually suffice (4-5 interviews total from experience).

C) Recommendation/ networking

This is wildly varied. I didn't formally interview, but have buddies who did have to undergo a formal process.

Here is a tip for people:

CD teams are often like a club of guys/ girls who are very close, work very well together, hangout outside the office, and are very aligned on pretty much everything. People frown when I say this, but I see it everywhere. We play jokes on one another. The VPs take us out drinking all the time. When my boss' tie is dirty, I will ask him if he ran out of toilet paper after his morning coffee...
This is all to say that these teams often have a "personality", and the more you fit in to that profile, the more likely you are to be selected - be this as an analyst or as a senior manager.

Feel free to ask any questions about the negotiation stage, adjustment, daily-routine. I am happy to keep this thread going so long as people are interested.

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May 9, 2016
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May 10, 2016