Corp Dev/Strategy at Early-Stage to Late-Stage Startups
Looking to move on from a VC (~2 years as an analyst) into Corp Dev/Strategy. Based on what I've read, the easiest move for me to make is into one of the portfolio companies' teams. Have some questions on what skillsets are needed/valued most on a Corp Dev team depending on the growth stage of the company.
Questions for the forum:
- From some LinkedIn searches, most of the teams are made up of ex-MBB types. Do I have a shot as a VC analyst?
- How does Corp Dev/Strategy at an Early-Stage startup differ from a Late-Stage startup? (And differ from a public co?)
- With your answer to #2 in mind, what skillsets are more valued/necessary for each stage? E.g. a Late-Stage Corp Dev team is looking for ECM bankers as they prepare the company to go public...
Quick bump. If anyone can share some insight here, I would greatly appreciate it.
Bump, also interested in how much time one typically spends on acquisitions v. planning an exit strategy (be that M&A or IPO).
PS: I have a little insight on #2 as a growth investor (think $5-20M ARR companies) -- they almost never have an in-house corp dev / strategy "team." If they need to make an acquisition, they're overwhelmingly small $5M deals and our firm will do most of the legwork. Occasionally there is 1 mid to senior level guy who will wear a strategy-like hat, but they're often spending time on biz dev / finance as well. So either joining one of those functions or optimizing more for late-stage is likelier
Thanks. This was my hunch as well. This "startup" I am targeting has about 8-10 folks on their Corp Dev/Strategy team, does about $100M in revenue annually. Appears to be gearing up for an IPO, but first step is getting close to profitability.
At my old company it was about 50/50. We spent a significant amount of time around raising money.
At my new company, pre-IPO my allocation was around 25% each acquisitions, strategy, finance, exit. It was hard to do a deal while we ourselves were in a process, because that would have resulted in a material change to the business - imagine selling your house, and then telling the buyers you'd just added a pool, changes the deal significantly, and also really screws things up from a SEC filing standpoint. Our advisers did a lot of heavy lifting on the exit stuff, and frankly I was new to the business.
Post deal, my time is about 50% acquisitions, 30% strategy/ finance, 20% IR/public company stuff. Varies a lot period to period based on what's going on - earnings season, live deal, etc. We run a lean team at the corporate level, so lot of hats. But, hoping as we grow we hire dedicated resources with background in areas especially IR and finance, because frankly although I do my best I'm a noob at some of that stuff and also don't have a huge desire to be doing it longterm.
Thanks, understanding the shift in responsible pre-IPO vs. post-IPO is very helpful.
If you don't mind me asking:
Thanks in advance.
Why are you trying to leave VC to go corporate?
My firm is small and mostly unheard of even within the city I live/work in. Additionally, comp is low, and deal flow is not that high quality, although we have gotten in some strong deals for our geographic area. Also, staying as an analyst at a VC firm longer than 2 years is what some call "spinning your wheels," and I'd tend to agree there.
I've worked corpdev at series B startup, and a PE backed firm -> public company. I interned at the first job and chose to return over consulting/ IB jobs.
At my first company, corpdev was largely about finding cool technologies, and secondly, development talent to build out our platform. Acquisition consideration was typically heavily in company stock.
At my current one, it's a lot of small/ medium sized tuck ins to expand our markets (same core product), but financial profile (revenue/ EBITDA) are a lot more important. We pay in cash and debt (equity being considered too expensive).
A late stage would be hiring advisers to take them public. While nice to have someone who knows the process inhouse, its not really necessary or value add. Ultimately you need the bank as an institution for their connections, etc., no matter how good the former MD of GS you hired is.
I think both situations require wearing a lot of hats - early likely more hats than later stage. While acquisitions is my main job, I also assist with strategy, IR, and FP&A.The type of diligence conducted tends to be quite different between the two as well. Early stage is more about validating technology/ strategy; later stage does that but a lot of other things as well and is generally just way more complicated
On a different note 8-10 on a corpdev team is very large for a company of that size.
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