10/31/06

I want to see if anyone can share some real life information on corporate development opportunities post-IB. Real information defined as career progression timeline, salary, responsibilities, etc. First hand knowledge would be most appreciated. Thanks!

Comments (56)

Best Response
10/31/06

i assume you're asking from an analyst perspective--associates generally have poor luck making this type of move until they reach vp or higher.

the following is from my experience as a corporate development professional.

career progression:

  • most ex-analysts enter at the senior analyst level. this position is typically the position right under the manager/director level at fortune 500 corporations. some ex-analysts may be able to swing a manager level corporate development position at smaller to mid-size corporations or out of pure luck at larger places (right place, right time).
  • promotional opportunities are there, but generally far slower than in banking unless you're willing to hop around from company to company or job to job. most corporate development groups (not counting corporations which are organized like ge or sony where every single division and product line has its own corporate development team) tend to be relatively small. this, coupled with relatively low turnover (corporate development guys generally have little day-to-day pressure in the sense that they don't have sales quotas or p&l responsibilities) results in a situation where you most likely won't be receiving a promotion every 3 years.

salary:

  • the average (based on real-life corroboration from friends/colleagues with similar positions) comp is about $75,000 to $90,000. the average company pays a bonus of around 10-25%, with some being higher and some being lower.
  • manager level pay can vary tremendously depending on how many manager levels there are, but in general, you could probably count on comp of at least $250,000 to $300,000 (in total) as a slightly-below c-level fortune 500 corporate development manager.

responsibilities:

  • in general, you'll have more responsibilities than a banker of your comparative level. you'll do everything from deal screening/identification to model running to selling acquisition ideas to executives to negotiating LOIs, MOUs, and purchase agreements. in addition, you'll also gain exposure to the diligence process and actually coordinate financial, legal, environmental, tax, and operational due diligence.

considerations:

  • obviously, the pay in corporate development is nowhere near comparable to banking. a 1st year out-of-college analyst will easily make more than a corporate development analyst with 2 years of banking experience and 1-2 years of corporate m&a experience. in addition, the higher up you move in corporate development, the worse the pay disparity becomes. most good senior associates will make more in a given year than senior fortune 500 corporate development managers.
  • however, the pay issue is well counterbalanced by the significant decrease in weekly work hours. while bankers across all levels will average at least 60 hours/week, corporate development is about as close to a traditional 9-5 job as you can get. in addition, you also have a lot more freedom and flexibility in the sense that you can offload any work that you really don't want to do to a banker in a pinch (those are the guys who are getting paid to work weekends, not you). in addition, you'll also have MDs who'll grovel at your feet and literally beg you for work to throw at them. you can definitely use this to your advantage (especially during the pitching phase where banks are competing for the "lead left advisory position") to get things done with minimal effort on your part.
  • additionally, corporate development in general is lower stress than comparable professional services positions. while some executives can be hard to work for, they do understand that most companies aren't organized to do 10 deals in a year. as a result, where there is pressure to identify deals and get them done, the pressure isn't as intense as bankers and salespeople who have to meet revenue quotas or operations guys who have to manage a p&l.
  • a lot of ex-bankers get bored with corporate development. although most bankers don't get off on the hours, they do get off on the transactional/deal experience. in the world outside banking, deals are done at a rate of maybe 1-2 a year on average. thus, if you get your kicks from doing deals, you'll likely bored pretty quickly. thus, for ex-bankers, corporate development is best balanced by some type of outside work interest (family, hobby, etc.) which makes having the free time worth it. if you're one of those guys (or girls) who gets off on being i) a master of the universe and ii) the richest person on the block with lots of fancy toys, corporate development probably isn't for you.
  • as a corporate development guy, you'll actually develop real industry knowledge. in other words, you'll really know how a business/industry works instead of pretending to know how a business/industry works like most bankers.

Investment Banking Interview Course

4/3/11

Great post, lots of helpful information. SB'd.

4/3/11

-MBP

4/3/11

I mean if you could land a SA sophomore BB I'm assuming yyou mean IBD, does it really make sense to pull yourself out of the industry for a summer where you could probably get the offer leveraged to another IB bank, another gorup in your same bank, or in some RARE cases just a job offer?

10/31/06

wow that was extremely informative thanks!

4/3/11

Thanks a bunch! Your career trajectory is insane, within 6 years of graduating you are already a director. This information will be very helpful for my upcoming CorpDev interview.

4/3/11

Thanks...I tried some searches, but didn't find that

4/3/11

To clarify, assume that the prospect of getting FT IBD offer is not of concern.

Given that you are sure that you can get FT IBD regardless of summer choices, what are your thoughts?

4/3/11

datphukinnewb:

Thanks a bunch! Your career trajectory is insane, within 6 years of graduating you are already a director. This information will be very helpful for my upcoming CorpDev interview.

More like 7 years. I was out of work for a while after the layoff...

"Once bread becomes toast, it can never go back."

4/3/11
AnacotSteel:

Thanks...I tried some searches, but didn't find that

interesting, BC when I search that is the first thing that comes up

"Jesus, he's like a gremlin; comes with instructions and shit"

4/3/11
JimmyDormandy:
AnacotSteel:

Thanks...I tried some searches, but didn't find that

interesting, BC when I search that is the first thing that comes up

What were your search words? I tried 'Corporate Development', 'Corporate Development Compensation', 'Corporate Development Salary', and harvardgrad's thread wasn't even on the front page...

-MBP

10/31/06

Good entry.

4/3/11

Great content, thanks

Investment Banking Interview Course

4/3/11

In defense of OP as well, I just searched it and it doesn't come up on mine either.

'Before you enter... be willing to pay the price'

4/3/11

Business Development, I hear it's called would be a good line of work. If you have that and not IBD BB, then go ahead. I've seen alot of students not finding any work these days.

I was going to pursue internal m&a at a BB, and still think about it to this day. For the summer, I'll be doing BB IBD. Just keep in touch with the recruiters wherever you go.

What interests you? I am from San Francisco and have a couple friends doing BB TMT and google finance.

10/31/06

Thanks a lot!

4/3/11

What about undergraduate entry - from your write up I understand all your co-workers are experienced professionals, so does your firm not recruit straight from universities?

4/3/11

google finance is not google corp dev...

4/3/11

curiosity killed the cat:

What about undergraduate entry - from your write up I understand all your co-workers are experienced professionals, so does your firm not recruit straight from universities?

No, we do not hire straight from undergrad. We're not very large and don't have the ability to guide the inexperienced, and most employees hit the ground running pretty quickly. We've had our last two FP&A hires come on board and immediately get underway with the annual budget. I think this is probably consistent with a lot of smaller companies with less resources.

"Once bread becomes toast, it can never go back."

10/31/06

Monkey Island,

Do you think corp. dev. is a good entry point for advancement in a company (towards senior management at some point).

Of course the progression isn't as fast as banking but do you think it's a good place to start for someone who wants out of banking and into industry as compared to other more obvious areas to start out in e.g. sales / line position

4/3/11

What do you know about MBA entry - what does your firm look for? Are the people that join at the MBA level primarily ex-bankers, or is it a variety?

Great write up! +SB

4/3/11

The biggest difference between IBD and CD/BD is deal flow and deal size. If you only work for one company, you end up doing a lot more before and after each deal rather than just doing deal after deal. That being said, you certainly can gain valuable experience in a single industry. Generally tech and pharma CD/BD have a more steady stream of deals (all of those tech license deals usually flow through a CD/BD department). However, these are usually very small deals, puncuated by a big one once in a while.

Bottom line (as someone who interned for two years in pharma CD/BD before deciding to work in banking), I think it's rewarding to take a deal from start to finish including formulating the initial strategy, identifying targets, making a bid, due diligence, closing, and integration. However, when you only work for one company, you get a narrow view of things and don't see as many deals. Therefore, at this stage in your career, I think IBD is better since it gives you much more exposure to more deals, companies, and people.

4/3/11

hamm0:

What do you know about MBA entry - what does your firm look for? Are the people that join at the MBA level primarily ex-bankers, or is it a variety?

Great write up! +SB

Pretty much everybody we've hired with an MBA or PhD and was previously a banker is currently in a senior position. Both our CFO and SVP of Finance & Accounting have graduate degrees and banking backgrounds. Our entire junior staff is undergrad only (some with CFA) and mostly ex-bankers.

"Once bread becomes toast, it can never go back."

10/31/06

on the culture of the company... at a place that values analytics (i.e. the ceo is an ex mckinsey guy, etc.), sure--it'd be a great starting point.

however, at an "operations" company where the culture is focused on operations above all else (analytics is an afterthought) and all the big guys are operations guys, maybe not.

4/3/11

+1 - great write up. Curious about undergraduate possibilities in the field as well.

4/3/11

Perhaps the pay isn't as good, but would corporate development be a natural exit op for someone from IB who didn't want to go into PE/HF for example? Or are you working the same hours doing the same stuff for less pay than IB?

10/31/06

I agree w/ Monkey_Island.

From what I've seen different companies place substantially different values on their corporate development departments. One BOD might greatly appreciate the insite of corp. development while another will just play with their blackberries until the next presentation (by somebody else.) Also, your degree of self-motivation will substantially impact your upward mobility. (And if you jump out of banking because of the hours you already know how self-motivated you are in regards to your career.)

4/3/11

Great post, thanks for sharing. Its interesting because at my company (large F50) all these roles are split up within corporate finance (between Corp M&A, Treasury, FP&A, Investor Relations) so it's pretty cool that you have a hand in almost all of them.

4/3/11

Be careful when considering a job that is either Corp Dev or Bus Dev. Sometimes the jobs can have wildly different tasks/descriptions. Make sure you get a very detailed description of what the job involves.

4/3/11
capitan del banco:

I agree w/ Monkey_Island.

From what I've seen different companies place substantially different values on their corporate development departments. One BOD might greatly appreciate the insite of corp. development while another will just play with their blackberries until the next presentation (by somebody else.) Also, your degree of self-motivation will substantially impact your upward mobility. (And if you jump out of banking because of the hours you already know how self-motivated you are in regards to your career.)

not sure where you are coming from monkey

4/3/11

Quaneaser:

Great post, thanks for sharing. Its interesting because at my company (large F50) all these roles are split up within corporate finance (between Corp M&A, Treasury, FP&A, Investor Relations) so it's pretty cool that you have a hand in almost all of them.

Originally Corp M&A, Treasury, and FP&A were all a part of our Corp Dev function. IR has always been its own thing, but there's a fair amount of interaction between the two as deals get close to closing. Since I've been here, the FP&A function has split off and grown into its own thing while Corp M&A and Treasury are still part of Corp Dev.

It is definitely interesting getting all of the different experiences, and I can see where they help me now and will help me in the future. However, it can be a drag focusing on FP&A when you're trying to close a deal. It's also tough managing forecasts for too long after an acquisition because as you acquire more assets/operating units, more ongoing responsibility falls on you and makes it harder to focus on the next growth opportunities.

"Once bread becomes toast, it can never go back."

3/22/11

In case anyone would still read this, I work in Corp Dev (searching for Manager salary info on this board), and Monkey_Island essentially wrote my work biography in his post. Excellent, informative, and accurate.

However I'm beginning to think that Corp Dev Manager salary # he threw around is a little aggressive in today's market. Managers are really making 2x what Sr. Analysts are making? Huh?

4/3/11

Great username. Quick question... how would you go about breaking into a Corp Dev role from Corporate Strategy?

In my current role I'm mainly touching market analysis and ad-hoc projects stemming from senior leadership requests as well as dipping my toe into M&A and competitor analysis support.

What would your recommendations be on breaking into Corporate Development for F500 companies or possibly smaller given I don't have a banking background?

Thank you!

4/3/11

I agree with being careful in accepting a CD/BD job. Some companies call their sales departments "Business Development." This is incredibly misleading and obviously has nothing to do with M&A. As a result, you must make 100% sure you know exactly what your job will entail. A good rule of thumb would be that if the department sounds large (greater than 10-15 people), you need to be very skeptical. Even big pharma CD departments are small, so watch out. Also, responsibilities vary widely from company to company. Some have their CD departments planning the overarching strategy of the business while others relegate them to evaluating and flagging potential small acquisitions. If you're going to get into CD, you need to be a growth stage company that is rapidly acquiring other companies.

I also can say that the pay definitely is not as good as banking (salary is probably slightly more, but bonus is a lot less). However, generally the hours are much better, so it's the classic tradeoff. That being said, if you move up pretty far in CD, you can get compensated pretty well. It also is a way to transition to senior management on the industry side. The VP of CD typically reports directly to the CEO.

Anyway, since I am at the beginning of my career, I left CD for banking for wider exposure. But, if you're a bit further in your career or know that you love tech/pharma then I'd say CD is definitely worth a look, assuming you can find a good opportunity.

4/3/11

MrReagan8:

Great username. Quick question... how would you go about breaking into a Corp Dev role from Corporate Strategy?

In my current role I'm mainly touching market analysis and ad-hoc projects stemming from senior leadership requests as well as dipping my toe into M&A and competitor analysis support.

What would your recommendations be on breaking into Corporate Development for F500 companies or possibly smaller given I don't have a banking background?

Thank you!

Your situation is really similar to that of the FP&A guy who joined our team. He was trying to break into Corp Dev at his previous company (F500), and he basically had interviewed and been offered the position when they decided they were no longer offering it. That's when he started looking externally to make the move.

I would focus your resume (and your training, if you need it) on financial modeling and presentation skills. You have to make it clear that you have some significant experience with modeling. Otherwise, it's likely that your attempts are going to be futile. It's expected that new hires, even at the lowest levels, can navigate Excel and financial statements with relative ease. The rest of your experience with strategy and market analysis should be very applicable to the Corp Dev role.

I would recommend you try to get in with a smaller company first. That was my experience.I see a ton of postings on LinkedIn for "Sr. Financial Analyst" positions at various companies. That would be the role with which you would break into Corp Dev.

"Once bread becomes toast, it can never go back."

3/27/11

haha well this is true and dandy corp dev guys are typically the first ones thrown out on the street if the company even goes a little down(cuz they don't deal with the day to day operations in the company). So it is pretty risky.

4/3/11

Would you mind sharing some more thoughts on exit opps? Specifically where do you see yourself in next 5 years?

I work at a Fortune 500 company previously in corp dev role (international acquisitions) now moved over to being a finance manager for two separate business units. I'm looking at two paths: leverage my corp dev and operating experience and try to break into PE now OR move over to another large company in same industry to gain more industry experience and then move over to PE, Thoughts?

4/3/11

CORPORATE DEVELOPMENT SOUNDS LIKE A SHITTY JOB

FARTMAN

4/3/11

Long but great post. Thanks a lot!

4/3/11

do have any specific suggestions on places to practice modeling? I would like to think I am fairly good with excel but dont have any modeling expierence directly

4/3/11

RealMittRomney:

do have any specific suggestions on places to practice modeling? I would like to think I am fairly good with excel but dont have any modeling expierence directly

Being good at Excel and good at modeling are almost two different things entirely. I actually purchased some materials from Wall Street Prep through WSO about a year ago when I needed to learn Oil & Gas modeling for some transactions we were doing (expensed it, of course). They were very good materials for walking you through the process. There are also some great free materials at the website Macabacus, along with some very good valuation and transaction info.

"Once bread becomes toast, it can never go back."

4/3/11

Great post!

4/3/11

You talked about exit opportunities, but I was wondering if you could elaborate on internal advancement opportunities. In other words, what is the path/connection from a senior level in corporate development to a c-suite type of role in a F500 company. Thanks.

4/3/11

johnwayne7:

You talked about exit opportunities, but I was wondering if you could elaborate on internal advancement opportunities. In other words, what is the path/connection from a senior level in corporate development to a c-suite type of role in a F500 company. Thanks.

This is somewhat tough for me to speak to since I've never seen it happen. We've had the same C-Suite team the entire time I've been with my company. There's a huge gap from my current level (or even my boss' current level) to the CEO/CFO positions. Corp Dev can be tough to break into C-Suite because it doesn't have the accounting background most (good) CFOs have. CEO is generally your best bet, and that is accomplished best by cultivating good relationships with the investment banks and commercial banks you do deals with. For instance, one of our CEO's greatest strengths is his set of relationships with VERY senior bankers at BB companies. This allows us to get funds or pricing on debt that most wouldn't have access to. Many of the deals we do are much more attractive than the market, and it allows us to push syndication groups with large commitments from our relationship banks.

Not sure if this is a great answer to your question, but this what I've noticed during my Corp Dev experience.

"Once bread becomes toast, it can never go back."

4/3/11

Nah that's a great answer. Thanks a lot. I would give SBs and all that stuff but not sure if I have them any more and not sure what the underlying significance of them actually is.

4/3/11

Couple additional questions for you:

How do you run your interviews these days? Do you push for things like the below, and if not, what should the focus be?
- Walkthrough a recent deal: Any preference for buy or sell-side focus? Strategics (most likely?) vs. financials?
- Back of the envelope tests vs. 30min-1hr model + presentation tests?

Since there are years where deals just aren't interesting enough, what if you're the champion of the 1-2 that come in and it closes but becomes absolute shit? How do you "save face" without getting yourself kicked out? And on the other hand, what're the takeaways from those situations where you thought a company was shit but got acquired by a competitor at a discount/premium and it actually flourished?

When you're sourcing / reviewing private companies in particular, obviously companies and individuals like to look for certain things. What's your go-to question that not many people would be interested in finding out at the onset?

4/3/11

BanditPandit:

Couple additional questions for you:

How do you run your interviews these days? Do you push for things like the below, and if not, what should the focus be?

- Walkthrough a recent deal: Any preference for buy or sell-side focus? Strategics (most likely?) vs. financials?

- Back of the envelope tests vs. 30min-1hr model + presentation tests?

Since there are years where deals just aren't interesting enough, what if you're the champion of the 1-2 that come in and it closes but becomes absolute shit? How do you "save face" without getting yourself kicked out? And on the other hand, what're the takeaways from those situations where you thought a company was shit but got acquired by a competitor at a discount/premium and it actually flourished?

When you're sourcing / reviewing private companies in particular, obviously companies and individuals like to look for certain things. What's your go-to question that not many people would be interested in finding out at the onset?

Aside from Excel and Powerpoint, what are 2-3 other tools the average Corp Dev guy is competent at and would stand out from the pack? You mentioned "Sr Financial Analyst" as a stepping stone but oftentimes I see and have been described in interviews about experiences in productivity tools that are absolutely useless and never contemplated banking.

I like to focus less on deals found on a resume because often times you get a rehearsed set of multiples and metrics which bores me and doesn't tell me anything. I might ask what the main drivers of value were in a deal and look for a comprehensive response there because often times you're quickly putting together investment memos on new targets and need to be able to communicate the value drivers well. When it comes to valuation, I prefer questions that walk me through their thought process on a theoretical basis. For instance, "I would like to open a hot dog stand. How would I value this stand and make the decision to invest in it or not?" I also like the version where you ask an interviewee to pretend that you're a sell-side client with no education and you need them to explain to you how another company would value their company. Process questions like those seem to get me much better answers that I can use when describing a candidate to my superiors.

I don't normally give back of the envelope tests. If I feel that somebody might be weak in a certain area, then I'll shoot them some assumptions and tell them to put together a valuation for me with explanations as to what they did. I've only done that once.

I've definitely been in the spot where a deal I've done has gone to complete crap, however, my face save came in the form of a presentation I'd put together two months before the deal closed that showed the market turning and where it could go. I recommended a significantly reduced valuation to management, but they chose to move forward with minimal reductions to value. We got some reductions (about $20 MM), but it was only 1/4 of what I was looking for. There's a ton of finger pointing and additional analysis required when a deal goes bad, so if you want to save yourself some time and lots of frustration, avoid doing bad deals just for the sake of doing deals or hitting earnings targets (Enron style). I've also had great deals structured and ready to go that didn't get approved for various reasons (different allocation of capital, liquidity concerns, etc.). Those don't hurt quite as bad as the bad deals, but it still stings the ego.

For private companies, I really like to focus on questions that dig into a seller's willingness to sell. At public companies, management generally has many good incentives to sell the company. At a private company, those are dollars right into the owners' pockets. A big red flag for me is if target's management pushes for some seemingly arbitrary date to get the deal done by. That usually indicates to me that they believe the market will turn or some sort of event will take place which negatively affects their business. If you can get access to low ranking employees, you can generally get much better information than when talking to management. I also recommend focusing hard on revenue recognition practices and cost accounting. I've seen some pretty shady non-GAAP things in the financials of private companies that have significant impact to value (mainly methods that inflate revenue early on only to be corrected at a later date)

As for tools outside of MS Office, we don't use much here. I've had to learn Oracle for pulling actual data and digging into the GL. Some companies use Hyperion, but that's mostly for FP&A. I use Bloomberg quite a bit since I deal with multiple commodities, but that's less useful to somebody who isn't constantly looking at pricing curves and relationships.

"Once bread becomes toast, it can never go back."

4/3/11

Great post, quick question for you. Would it be possible to transition to a Corp Dev role from Big Four Public Accounting with a Top 20 B-School MBA?

4/3/11

DTFSI:

Great post, quick question for you. Would it be possible to transition to a Corp Dev role from Big Four Public Accounting with a Top 20 B-School MBA?

It's probably not too hard to get into a F500 from that route. Smaller companies will be difficult because they will want people who already have transaction experience and need minimal training and managerial resources.

"Once bread becomes toast, it can never go back."

4/3/11

Thanks for this great thread.

What are your thoughts on corporate treasury as a career vs corp development? I'd be interested in hearing any thoughts you have on the lifestyle, how enjoyable/rewarding the work is, ideal candidates, etc... I'm asking since my background is in money management (an investment focused semi-PWM role) with a CFA and it seems like if I were to ever potentially attempt to break into a corp finance role treasury would be the logical place.

4/3/11

"Once bread becomes toast, it can never go back."

4/3/11
4/3/11

Gotta be damn good at it - Go Corp Dev.

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