Hi WSO,
For some background, I'm currently in a junior CorpDev role at a M&A-friendly publicly traded tech company. I studied finance at a semi-target US News top 50 school with no IB experience but interned in PE.
I have been trying to make a mental map for how I should approach the next 5-7 years to put myself in a competitive position for getting a role in PE (growth or buyout, not VC) with a longer-term goal of being in a co-invest position (VP/Principal and up?).
At my current role, the team is constantly interacting with reputable bankers, running valuation models, understanding industry trends to fine-tune where our M&A efforts should be, spreading comps, etc. However, the financial modeling and valuation side of things typically falls on the laps of a separate valuation team. This leads my team to be closer day-to-day with working with business units to identify synergies and laying down what the opportunity means on a strategy-basis with our management committee.
Anyways, I am looking for your help on generally which positions would be interesting to pursue given my end goals:
1) Strategy Consulting (PE DD role?)
2) PE value creation group (Vista Consulting Group, Capstone, Insight, others?)
3) Take a role on our internal CD valuation team (Pre-LOI to Close)
4) Move to IB
5) Take a strategic finance role at a PortCo --> Network into PE
6) Stick it out in CD for 3-5 years --> MBA --> PE
7) Other
I am positioned well to end up in IB, but I really do not want to. Is a MBA going to be necessary? Are there aspects of my company's deals that I should focus on more to gain skills attractive to a PE firm? Should I take more valuation responsibility?
Considering I am early in my career, I am focused more on building the right skills over the next 3-5 years without pigeonholing myself in any one place. I read a decent amount, maintain a solid social life, have hobbies, but I do not mind sacrificing it all in the short-term if need be. I only have a problem with the sacrifice of time (IB) if it simply is not necessary given that I am already on the buyside. Any and all thoughts are welcome
Cheers,
BBB_
In CD myself and considering PE as well. I usually try to read bios on various fund websites and seek those with less than cookie-cutter backgrounds. They are more likely to be open to a CD analyst moving to PE Associate.
That’s a good idea, thanks! Talking to alumni from my school hasn’t been too fruitful for me yet.
also on CD with aim of moving to PE. sadly industry is small where I’m from, seems like smaller funds are more open to non IB backgrounds
Keep your head up! Crazier things have happened
I had five + years of Corporate Development experience, the last three I was the sole CD person leading deals for a publicly traded mid-cap company. My personal opinion, the path of least resistance would be immediately trying to lateral to a reputable IBD platform then transitioning to PE.
I also thought that a lot of my CD experience (building valuation models, putting business cases together, running diligence processes, leading meetings with execs, etc.) would translate well to PE. Unfortunately, without any banking or prior PE experience - it will be hard to move to the principal investing side. I started a thread a while back on this and some of the feedback I received was, even though you might be doing identical analysis/work it's unlikely it will be viewed int he same light as to what is done at a PE. Fair or unfair, that's the perception IMO.
I'm not saying it's impossible and I do think it helps that you are early in your career. I would say the longer you stay in the CD role the harder it will be to transition.
I'm in a corporate development role in a leading financial services company where I work on all aspects of transactions (building models, putting togther documents, DD process etc.) and strategy projects. Given the stature of my firm in the industry I'm regularly exposed to FIG coverage teams at BBs and EBs. I would be keen to lateral to IB at some point - any advice on how I can best position myself for this?
I think if you have a really good relationship with these banks, it might be good to reach out to them but it's not something I would put a lot of stock into as part of my transition plan. Interaction / contacts at banks are something I thought I could leverage but they have a resume book of target candidates beating down their door looking for a role, who won't compromise a relationship on their buyer's list.
I think as analyst, you still have a good shot to lateral to a 1st year or 2nd year analyst at a bank but as I mentioned in my last post, it would be good to lateral sooner than later. Timing isn't great but I still do see LI headhunters that are still looking to fill junior level banking roles.
Good luck!
Thanks for the response and kudos to you for getting through those 3 years of running things alone! I've seen firsthand how tough that is from a previous internship.
I read through your old posts which were helpful, and I think moving to IB is the best option all around. Throughout college and recruiting, I figured going into CD would differentiate me and finetune my skills for PE, but it's sadly backfired on me. Although, I could have pushed harder for IB in the first place.
Would be interested to know if your current IB position is at a firm that you regularly received inbounds from or had a professional relationship with? I agree that approaching my team's contacts could cause issues or most likely not lead anywhere.
I wouldn't say it backfired, it's just a small detour - so no need to beat yourself up over it. A career in CD isn't bad at all, I think sometimes reading this forum can be a bit toxic and lead to a warped view of what success is (I maybe biased since I am not the standard BB IB to MF PE guy).
I'm also not saying you should give up on trying to move directly to PE from CD but what I am saying is that IB would present the least path of resistance along with opening up a lot more doors in PE (especially if you are able to land at a reputable platform). You should continue to network and apply for both IB and PE roles.
When applying for IB roles, you do bring a unique perspective of being on the buyside at a corporation - I think that's something you should definitely highlight in your experience when interviewing (that's a differentiator).
At my current firm, I did receive maybe one or two opportunities but they were well before I reached out about transitioning to IB (I used a referral I had through my network).
Good luck!
Do you know why that is the case? I am in C&D and trying to make a switch to PE, but I have seen that most of the PE firms prefer more of an IB background.
Hey BBB, would you mind explaining how you got the CD role? Interested in when you recruited for that, and what the typical title is for a position like yours?
Honestly, it was one of the 2 companies that have ever interviewed me from an online resume drop. I previously had school-year internships in CD and then PE through OCR. The CD one turned out to be minimal M&A and more Corp Strategy which was very unstructured and immensely rewarding. Managers were smart, and I learned a lot of nuanced analysis methods. Market sizing, target company profiling, statistical modeling projects, credit analysis, bizdev work, etc. The PE internship wasn't formally on the investment team but had overlapping sourcing, due diligence, and portfolio management functions. I was interested in returning to CD based on my prior intern experience and the fit was there throughout the interview for my current role. The CD roles all interviewed similar to medium-intensity IB interviews with the same technicals. My title is analyst.
I've written about this before, but BankerC hit the nail on the head. The problem with Corp Dev is that the skillset is similar, but not the same as what is required in PE. Yes you are "leading diligence" and "analyzing companies", but it's just not the same as what is done in PE/Banking.
Having been on the hiring side of things in PE, given how few seats we have and how much we need Associates to have an immediate impact, it's unlikely I'd pick a Corp Dev analyst with limited deal experience over any banking candidate. Plus, I'd have to worry about your capacity to be ok with the hours, travel, etc not to mention the general technical aptitude to do the job.
If you're looking to chart a path to PE, I'd lateral to banking sometime in the first 2 years on the job. Analyst to analyst lateral isn't a big deal at all, from there you can go the traditional route.
I believe you might have been the one I was quoting, thanks for chiming in.
Generally, folks will go from PE to corp. dev. at a portco or public, not the other way around. There are people out there who have been able to skip IB and break into PE with backgrounds similar to yours but it's pretty rare. Generally they'll have some sort of personal connection to a partner or founder and have someone call-in a favor on their behalf, at least in my experience.
You say you have no interest in IB, why? Aversion to the hours and or work they do? Just so you are aware, PE isn't a completely different animal from banking. A lot of the same BS you have to endure in banking still applies in PE; actually it can be much worse. The hours can be viscous, just as bad as banking, especially if you're more junior. And the work isn't terribly different either, instead of pitching clients you're pitching deals to your investment committee and you're doing a ton of decks on deals that'll never go anywhere, formatting changes and all. On top of all that, the internal politics are brutal. The teams are smaller and upward mobility is significantly more restricted; it's very dog eat dog.
In your case, will give the same advice I give to anyone looking to land a competitive seat (such as PE) with a non-traditional background. If you're truly dead set on breaking in, then you've got to be relentless about networking and looking under every rock for opportunities. It's a numbers game and you have take a lot of shots on net. Comb LinkedIn for deal team members at PE shops with backgrounds similar to yours, and ask if they'll connect with you over a call and get their take. They'll be better positioned to asses how competitive you are for landing a role.
Thanks for the response, great to hear your perspective!
My personal inclination against going the IB route historically hasn't had much to do with the rigor nor the technical aspects of the work. I understand that there is going to be "low productivity" busy work in every type of career - PE, IB, tech entrepreneur, strip club floor manager, whatever. I spent a solid chunk of college actually wanting to go into IB, but decided to take a path less taken simply so I could be different from most of my classmates. I was convinced that if I could make it from a non-traditional path than it meant I truly belonged without having to succumb to the norm while still gaining a relevant skillset.
The merits for why banking is a logical step is undeniable - refining my modeling skills/speed from the sheer number of hours put in, going deeper into specific verticals or expand knowledge to other sectors, recruiting, building rapport with a diverse range of industry/finance folks are all easily worthwhile reasons.
At least presently, I know I want to move forward within my current industry niche so I figured it would be interesting to ask about alternate paths. All the responses here are helping me tailor the way I approach my networking reach-outs, so many thanks again!
look for Basil
MBA intern in Corp dev here looking to make a similar move. I work in a niche tech field, would this make it easier to lateral to PE shops that specialize in this field?
Honestly it’s such an uphill battle. In my experience it has been basically impossible to land a PE job at a decent shop from CD, even investing in my niche sector. They will have you in to interview and try to glean knowledge about the businesses you look at. They may even give you a modeling test. You may crush it and also crush technicals and behavioral. But the unfortunate fact is that they have 100+ other resumes with guys that have IB backgrounds/ Ivy League resumes like themselves that also crush technicals and modeling tests and they know what they’re getting with those people.
I’d say switch over to IB for a little bit (network with banks you work with and others that do deals in your space) and see if you can get in from there and if not you can always go back to CD at a higher level.
Good luck. I hope you can break in. If you can’t though, that’s fine too. Also reach out and talk to people who have left PE for CD or other roles. These folks may have a good perspective that may help you think things through. Grass is always greener.
Another thing I might add (this is just my experience) is that a Corporate Development role is mostly viewed as an internal project manager. At the end of the day, yes you are building valuations, business cases etc. but the real decision maker is the business itself that will house the acquisition on their P&L. As a CD person, no one is going to hold your feet to the fire if the P&L under performs (opposite mindset from an investor), your objective to put a robust process/workflow in place and get the deal over the finish line.
So similar work to what a buy-side advisor might be doing with big difference being the banker is doing 10-15 of these a year versus a CD person who does 3-4 a year.
Yeah I tend to agree with you as to how the role might be viewed contrary to how some groups may function or how many deals the company does ( they could be going 10+ roll up deals a year or they do 1 deal every 10 years).
Also, for example, some groups I know don’t do any modeling and they don’t really build the business case and basically their job is to write talking points for their boss to negotiate a PA and project manage DD (which sounds pretty boring to me). They are a huge conglomerate and do a number of big deals annually. The bankers working with them probably hold this opinion.
Another CD group I know creates the business cases, does all of the modeling, negotiation etc thru to close and helps with integration and has good deal flow.
The work just varies considerably but it doesn’t take a rocket scientist to see why it’s much easier to just pick from a pool of IB analysts instead of gambling on a non traditional candidate.
Having done both IB and CorpDev before, I would suggest that you do CorpDev for a few more years and get a promotion or two, get a solid top tier H/S/W MBA and then try for a post-MBA role at a growth shop which is focused on your industry. Unlike some analyst/associate chimp in IB, you're
a ) actually developing an understanding of how your industry works and is evolving and will have deeper insights b) you are seeing at close quarters what happens inside a company and how executive decisions are made c) develop relationship with folks in your company who may become the movers and shakers within the industry tomorrow.
While your modelling skills may not be as good as an IB analyst, at a post-MBA role is much more than number crunching. You have to think about whether it's a good investment or not. You become a better thinker if you know the industry inside out and what you say will carry weight within your firm.
Secondly, as a CorpDev, you will look at pretty much all the available companies in your industry therefore you will likely develop a view on the key companies in the industry and some sort of relationship with them, if not at-least a Linkedin connect. When you are at a growth shop and you evaluate these companies - guess who in your firm will likely have a first hand view of these companies and potentially a relationship? Your sourcing will also become much easier.
Thirdly, as a post MBA associate at a fund you will be responsible for portfolio management which includes helping companies recruiting talent. If you build good relationships with the key folks in software/tech/marketing etc at your current firm, you can help your portfolio companies with hiring by potentially getting in touch with these folks who may themselves join or refer you to good candidates.
Don't think of CorpDev as a narrow deals focused role, think of it as an opportunity to get deep actual industry expertise that no banker will ever have. And in my mind, having actual industry expertise is invaluable for a growth shop.
c)
Very interesting post. Is this also feasible at the post MBA IB associate (without pre-finance experience)?
Have seen some IB --> Corp Dev at a pre-IPO/pre-SPAC company --> MBA --> public/unicorn corp dev (companies with higher trajectory/likely higher pay).
Saw one go into AM/HF but haven't seen any post MBA go to growth equity.
As many others have touched on, I think a stint in IB will be your best bet from what I've seen.
Ex: Good friend from college did corp dev at a F50 firm known for making a lot of acquisitions for a few years before joining an industry coverage group (same industry) at a top BB as an associate, then hopped to a MM PE shop specializing in that industry.
Probably won't like the answer, but bite the bullet and do ~2 years in IB. This plus your corp dev background will make you very attractive in an extremely competitive space. The MBA question depends on the firm you end up at and should be something you ask when recruiting. To skip it, you need a place that will promote you from associate to VP without an MBA.
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