Q&A: Valuation -> IB -> FP&A -> Strategy/BD

Hey everyone,

Have a bit of free time the next couple days and wanted to give back a bit after settling into my new role a bit.

Career progression was as follows:

  • Valuations at mid-tier accounting firm for two years (think top 6-8)
  • Middle market boutique investment banking for four years
  • FP&A for two years at a consumer startup
  • Currently: One year in as a Strategy and BD manager at a leading medtech company

Happy to answer some thoughtful and relevant questions you may have about progression (education and career), what I did in each of the roles, pros/cons of each role, etc. No questions on comp... those can be easily answered via a google search.

May take me some time to respond, since I will likely dedicate 30 minutes a day for the next week to this.

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Comments (20)

Mar 31, 2021 - 9:35am

Hi there, thanks for doing this. Currently doing audit at Big 4 and thinking of moving to valuations. I think beyond my 2-3 years in audit, I do not want to work in a job that makes me work more than 50 hours a week. 

Based off of this, what fields do you think I should be aiming for with solid comp but that do not go above those hours. FP&A? Are the hours in FDD/valuations less than 50 hours a week?

Thanks

  • Manager in CorpStrat
Mar 31, 2021 - 9:20pm

A jar

Hi there, thanks for doing this. Currently doing audit at Big 4 and thinking of moving to valuations. I think beyond my 2-3 years in audit, I do not want to work in a job that makes me work more than 50 hours a week. 

Based off of this, what fields do you think I should be aiming for with solid comp but that do not go above those hours. FP&A? Are the hours in FDD/valuations less than 50 hours a week?

Thanks

Based on my experience, I actually worked more in FP&A than I did in Valuations. However, I think the narrative out in the market is that FP&A should be working less than Valuations. This comes back to something I learned towards the later end of the career. What really defines workload and your true work-life balance is the company culture. A lot of companies push and market "work-life balance" but a lot do not practice it. You have to really probe during interviews and talk to ex-employees to get a better sense of the company. The difficult part of FP&A is the monthly close process. This is essentially closing the books for the month/quarter over a 5-8 day period. If you have a short-staffed team, that places a lot of pressure on the team to work later than usual to close on time. Ultimately, on average, workload is about 40-60 hours per week depending on culture.

Since I was in valuations >8 years ago, I am not fully apprised on current comp structures. However, I would think Big 4 valuation manager salaries would likely be $10-$15K higher than FP&A. I do believe a Direct/Sr. Director in valuations would ultimately make a lot more in Valuations than FP&A. If you work at a start-up in a FP&A role, you would likely get some form of equity options that would help bridge that gap in the long-term.

There are other things to consider when making this decision. For example, as you progress through the ranks in valuations, you are expected to have a book of business to sell services which will help you with compensation. This isn't expected of you in FP&A.

Other things that I would note:

(1) Valuations is extremely technical in nature and the work can sometimes get repetitive especially if you are only doing one aspect (i.e., ASC 805s, ASC 718s, etc.). It can also get annoying when you get comments/feedback because there never really is a right answer in valuations. The term I always heard when I was in valuations is that "valuations is more art than science"

(2) I was technically in a "Strategic Finance" role but about 60% of my work was FP&A. I personally found the FP&A and Strategic finance work a lot more fulfilling and engaging than the valuations work. 

I probably did not answer your question because, in my opinion, workload is ultimately driven by the company's culture at the top.

Best of luck.

  • Manager in CorpStrat
Mar 31, 2021 - 10:23pm

One more thing to add here... I always felt like valuation work can ultimately be automated to a certain extent. I would not be surprised to see some software solutions replacing advisors in the future. For FP&A, the close process can likely become more automated, providing you with more time to focus on analytical and strategic finance projects.

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  • Manager in CorpStrat
Mar 31, 2021 - 10:34pm

I got the role through Linkedin. I do not have a MBA and believe I went against MBAs during the interview process... so I was a bit shocked that I ended up getting the role. 

On a day to day basis, I spend 30% of my time crafting the strategic narrative for leadership, 30% of my time learning about the industry, 20% meeting with product managers and 20% on BD (includes strategic analysis and modeling). I do expect some of my BD responsibilities to pick-up as travel re-opens and as I get more familiar with the business.

Without getting into the nuance of it all, I feel like my diverse professional background has set me up for success. I feel like I am able to approach problems from multiple perspectives as well as dig into the details without losing sight of the broader goal. As a result of switching industries every 2-3 years, I feel like I was able to continuously learn versus get accustomed to a certain way of doing things. Sometimes the hardest thing to do is unlearn a way of thinking. I feel like this has allowed me to excel in situations that are either ambiguous or lack clear guidance. Out of all the roles, I do attribute a lot of my professional success to my experience in banking and FP&A.

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Mar 31, 2021 - 1:40pm

Thanks for doing the AMA. I have similar path where I did Big 4 audit > boutique firm valuations > Corp Dev Senior Analyst > FP&A Manager (internal move in same company as Corp Dev). 

What was the reasoning for moving from FP&A to Strategy/BD? More interesting work? Compensation bump? It seems that there's more seats in corp. finance/FP&A as compared to strat/BD and would be easier (and assuming less competitive) to advance later in your career hence curious of the motivating factor. 

You have a good breadth of experiences (val, IB, FP&A, BD) - what's the game plan now? 

  • Manager in CorpStrat
Mar 31, 2021 - 10:52pm

Good questions! 

I made the switch to strategy/BD for multiple reasons which I am going to list below by significance:

(1) Healthcare exposure: This may sound cheesy but I did want to work in an industry where I could see the positive impact our products were having on people. Literally saving lives. I always feel all warm and fuzzy whenever I watch our patient videos. 

(2) Exposure to Strategy and BD: I was getting a bit exhausted with the required attention to detail in finance roles. Every time you prepared something, you always had to make sure everything ticked and tied and would get the stink eye or be criticized if something was off by a few dollars. I found it to be mentally exhausting sometimes. I wanted to take a break from that and take a shot at something that required more problem solving and high-level thinking. I am now focused on crafting our strategic narrative, influencing our strategic priorities, analyzing short/mid/long-term risks to our company and how to address them and reviewing/analyzing both organic and in-organic growth opportunities. I feel a lot less stressed and bogged down in small details in this role and it is refreshing.

(3) Work-life balance: Roles such as Strategy and BD tend to have better work-life balance with some exceptions

(4) Compensation: Got a meaningful bump compared to my prior role

For next steps... I am still working and refining what I'd like in the long-term. For now, my ultimate goal is to launch my own business or work my way to a GM or executive leadership position in a consumer, medtech or technology company.

Apr 1, 2021 - 10:22am

Thanks for posting!

How was getting into IB from a mid accounting firm in Val?

What were you doing at the bank? I know some banks have specialized roles strictly for valuation- were you doing that?

How was adapting to workload and learning curve (from mid size accounting firm to IB)?

Key take aways from your time in Val & IB?

  • Manager in CorpStrat
Apr 1, 2021 - 11:51am

On a scale of 1-10, I would rate the difficulty of transitioning from Valuations to IB about a 6.5-7. Working in valuations, you certainly develop the financial modeling skills required in banking. However, the primary concern IBers have about valuation personnel is their analytical and problem solving skills given the technical nature of valuations. You just have to be well prepared to answer case study questions and really put a nice spin to your valuations experience.

While I was in IB, I was an industry and transaction generalist. I probably spent 40% of my time on distressed M&A/financings, 30% on restructuring, 20% on healthy company M&A/financings and 10% in restructuring consulting. I was lucky to have such a wide breadth of experience while in banking. I always saw myself as a hard worker so I was not too concerned with the workload. I come from a family of immigrant entrepreneurs and was helping my parents in their retail businesses at the age of 12... and I think that resonated with the bank I was interviewing with.

If I was to summarize my experience into two key takeaways:

(1) Valuations: Very technically oriented work. If you enjoy geeking out over valuation methodologies and formulas, this is the right job for you. This job really taught me to push through some of the menial work and try to make things as templated as you can, especially for more process oriented projects. This was my first job out of college so it was a learning experience.

(2) Banking: There is a lot I can say about banking. It is an absolute amazing learning experience and I wish I spent more time learning as much as I can early on versus complaining about the amount of idiotic edits I had to make (i.e., font sizing, periods, formatting, etc.). IB does a great job preparing you for all the challenges that arise in any future career moves you make (e.g., understanding business, drivers of business, importance of industry landscape, etc.).

I never found IB to be a mentally healthy career choice for people. Eventually, the high you get from the prestige and money wears off and that is when depression settles in (usually 2+ years out). Learn as much as you can and get the fuck out when you find the appropriate career transition.

Hope these answered your questions. Will be back on tonight to answer any other questions.

Apr 1, 2021 - 2:09pm

Wow! Seems like you've had a variety of experiences.

Can you elaborate on the change of lifestyle that happened at each step? Trade-offs? What position allowed you to feel most fulfilled both career and lifestyle wise? What position facilitated the most learning and provided the most room for growth?

  • Manager in CorpStrat
Apr 1, 2021 - 11:26pm

Credit Swish

Wow! Seems like you've had a variety of experiences.

Can you elaborate on the change of lifestyle that happened at each step? Trade-offs? 

Good questions. I am going to answer this in two parts.

Lifestyle and Trade-offs

I can go on quite a bit about this, so I am going to try to keep it short.

Valuations to IB: Significant shift in work life balance for the worse. I went from working 50ish hours per week to 70-80 hours per week. At this stage in my life, I was not concerned with work life balance and was just hungry to learn and get IB on my resume. It wasn't until year 3 or so that I started really dealing with some of the mental downsides of working so much.

IB to FP&A: I went from working 70-80 hr/week to working about 50ish hr/week. In addition, I did take a 50ish% paycut when you think about total comp. In hindsight, I wish I held off for an opportunity that paid more. Needless to say, I really did enjoy this role. No more pitches and no more demanding clients. Working on the company is very different and you get a very different perspective on things.

FP&A to Strategy: I went from working 55ish hr/week to working about 40hrs/week here and got a meaningful paybump (40%-ish percent). As I mentioned in one of my earlier posts, I went from a role that was very numbers oriented and required a lot of detail to one that required a lot of creative and high level thinking. This was a breath of fresh air for me.

What position facilitated the most learning and provided the most room for growth?

This is a very tough question... I felt most fulfilled both career and lifestyle wise is my current strategy and BD role. I feel like this role is a good role to develop your leadership skills since you do have some influence and sway with leadership. 

My FP&A role can also check both boxes as well since the primary reason why is because the company I worked for was

What position facilitated the most learning and provided the most room for growth?

For career growth, I would have to say my time at IB. I feel like promotions are slower on the corporate side than services. 

For personal growth, my time in strategic finance. I learned a lot and formed great friendships. Startup culture can be tough sometimes but it is pretty fun and the people in those environments are friendly for the most part.

Apr 1, 2021 - 5:05pm

I'm currently in the Valuations role at an accounting firm that matches your description. I work out of our Chicago office. I agree valuations is quite in-depth. I'm getting bored by ASC 820s, 805s, 350s, and FMVs. How did you make the jump to a MM IBD shop? What are things you wish you knew in advance that would make yourself more appealing to potential new employers? 

I think I did this right

  • Manager in CorpStrat
Apr 1, 2021 - 11:29pm

I just started applying on Linkedin. I felt like I did all that I could to optimize my chances of getting an IBD role since I received some feedback from people with experience. The one thing I wish I did was be a bit more thoughtful about the bank I went to. Looking back at it, I wish I worked at a BB or MM with a good brand name. My location is exactly a finance hub, therefore, I did not have many options. I did have two phone interviews with banks in NYC but, ironically, both never called and flaked on my interviews. I just jumped on the first offer I got.

  • Prospect in IB-M&A
Apr 5, 2021 - 1:47pm

Appreciate you doing this. A few questions I had:

- Did you go to a "target" school? If no, how were you able to land a valuation role right out of undergrad? From my conversations, it seems like the path to get to valuations is to do audit for a few years and then transfer in (which is something I don't think I'm willing to do for 2/3 years).

- Did you know the path you wanted to take out of college (i.e. valuation -> IB -> FP&A -> Strat & BD) or did you go into each role and then figure it out from there on more of a step by step basis?

- Any advice about what is the best place to start for someone who comes from a non-target school with interests in IB, valuations, PE, and I think my long-term goal is to end in corp dev? FWIW I plan to get my MBA at some point if that makes any difference in your advice.

Thank you in advance!

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