Is Corporate Development Underrated?

Everything outside of IB or PE is underrated on this site (Even BO). Someone could get a ER gig at Wellington and this site will say how it doesn't have exit ops.

I love corp dev. I work 40-45 hours per week, have very interesting work, and make six figures. I'm happy to talk about it more. The only downside is the lack of prestige (if that's something you care about) and the pay. I took a ~40% pay cut when I left IB.

silverbuck898 Corporate Development (and Business Development/M&A at certain firms) is very underrated and commonly overlooked on WSO. It all boils down to what you want to do. Do you see yourself becoming a CEO or Executive in charge of a division? What about working at a PE fund down the road in a specialized area?

If so, Corporate Development can definitely help you get there. Not only do you learn the business from a technical standpoint (i.e. Shale plays and understanding the E&P process if you're at a company like Oasis) but you gain the skill set that IBs have.

Also I have seen people go into Corporate Development, take on VP roles in Finance or over a division, and then transition to a private equity firm (no direct path but I do know its possible).

The previous posts--Sil especially--gave good color.

To play the other side, it depends on the firm you go to. Some firms have electric/dynamic corp dev teams that are flush with cash and encouraged to identify Accretive/inorganic growth targets and execute. Other firms have corp dev teams that are little more than window dressing. Meaning, no matter how good the deal, the firm doesn't give them balance sheet/ability to transact.

But if you find a good firm that's active and has solid relationships with debt financiers, that's a very strong job to get.

I do Corp Dev at a latam telco and honestly the work is very interesting most of the time. I worked at a PE firm that did LBOs, growth equity and even invested in early stage opportunities, so I've been able to learn a little bit about the different investment plays. Having said that I believe the transactional part of M&A is a must have and is interesting but to a certain extent; and this is why Corp Dev is awesome, you not only focus on the transactional side, you need to understand how all parts of a business are interconnected, not only the financials. Understanding value not only as a pure private equity play but for example understanding the value of its product portfolio, its strong culture, even its structured overhead and good processes or systems(makes it a good platform), is what makes corp dev unique.

I believe a strong preparation for corp dev, aside from investment banking/pe experience is doing a rotational program in a medium sized Company; learning about operations, R&D, HR, Marketing, Sales, Treasury, how each group thinks and how everything is interconnected.

You won't be a millionaire in corpdev.

Corp Dev is definitely underrated at both the Director/VP level and analyst/associate level. The Directors in my group have been at the company for a while and know it inside and out. They honestly bring much more value to the deal process than bankers do. They don't work soul crushing hours and make pretty good money.

The experience is great at the analyst/associate level if you're company is active in M&A. My deal flow is better than friends I know at banks. I'm also involved on every step of the transaction , which is something junior bankers just don't get exposed to. Also, no pitch books and other useless grunt work that never goes anywhere.. I can't tell you how many pitch books come across my desk that my VP maybe spent 10 minutes looking through it. It hurts to think how long an analyst worked to put it together. Exit opportunities are surprisingly strong as well. PE is definitely doable, but it is usually limited to PE shops focused on the same industry as the Corp you work at.

I did corp dev at a F500 Tech company for a short stint(part of a rotation program) and overall it was a decent experience, but I'll post some of my negatives with the experience as a counterbalance to what has already been posted.

I think a lot of what Sil and the other experienced Corp Dev'ers have posted is true and it's definitely a steady high paying career that can have the opportunity for interesting work if you're in an acquisitive space. Here are my cons though:

1. At many companies, the strategy is not to be acquisitive or too focused on growing the business inorganically. What that meant for us was a lot of time thinking of ideas that were ultimately worthless. In many groups you're not closing multiple deals each year, maybe 1-2 if you're lucky. Post acquisition you have no operational responsibilities so it's not like PE in the sense that you get to watch the business grow or get credit for running it effectively.

2. There is an opportunity for interaction with C-suite individuals, but in my experience, the opinion of Corp Dev/Strat doesn't go too far. You're essentially just in house bankers and consultants so people will listen to you, but even if you pound the table for a deal, you will always need buy-in from the GM of a division and the Product/Marketing teams within the division who are actually the ones who can make something happen.

3. When it comes down to it, and for better or for worse depending on what you want, there isn't a ton of accountability when it comes to making investments. If you make a great investment, people don't praise Corp Dev for being a bunch of geniuses that are vital to the business. With that being said, if you make a terrible investment that the company has to write off, well it wasn't truly your decision to acquire the business in the first place, plus at big companies, it's not like they're super tight with money so it's usually not a huge deal. As opposed to PE/VC where I'm actively testing my investing prowess with each deal we do and am also focused on running a business and executing on strategies that will make that company grow. If I do a shitty job, I'm out, if I do a good job, I make money and get the satisfaction of knowing that I'm picked up some skills and knowledge on how to run a business.

4. At the end of the day Corp Dev/Corp Strat are middle office if not back office functions at big companies. They're the guys that grind away on strategy / M&A activity so that execs can look at it and toss it aside. Sure the hours are decent and the pay is good, but unless you're at the Director/VP level where you're making big money with stock, just being a corp dev associate, manager, senior manager, principal, in my opinion is kind of a place where you go to spend the rest of your life. In fact, the exit opp for almost everyone in the group was to try and get staffed on work with a specific Business Unit and then hop off into a Product or Marketing role as soon as possible. I have seen very few people go from Corp Dev --> PE especially at the junior level. Only guys I've seen have done PE --> Corp Dev --> back out to PE and they were usually more senior. That's anecdotal for sure, but don't think there's an easy path from Corp Dev to PE.

Anyways I'm sure Corp Dev isn't equal at all places so it's probably better at some companies, but at the end of the day, there's still a reason people want to do banking/PE etc.

WSO underrates all jobs that aren't IB/PE/HF, but corporate development can vary wildly depending on the company you're working for.

Corporate development for Walgreens involves doing mindless due diligence for years around one massive deal. Corporate development at a small, acquisitive company could mean doing the boring stuff your investment bankers don't want to do during a deal and then finding odd jobs in between deals. Corporate development at a company with a highly-developed corp dev team could be fun as long as your pay is less than what bankers are putting in their engagement letters.

I would definitely rather be in corp dev than accounting, but a lot of the reasons people are interested in IB/PE/HF are directly conflicting with the value propositions of corp dev.

I think this thread is pretty indicative of what Corp Development is like (all over the place). You can't quite box in Corp Dev like you can banking or PE where it's much more structured. I think the nature and culture of Corp Dev is vastly different depending on the company.

I guess you really need to find out what you value to understand if its "under-rated". If you value good work life balance and interesting work then I'd say Corp Dev is where it's at. If you value models and bottles money and exit opportunities then Corp Dev really isn't the best place.

I've personally done Corp Dev for almost three years with no work in banking (previously) but I've always thought about trying to get into banking just to check that box - but as some have alluded the exits aren't quite there (I thought with a few years of Corp Dev I could transition into banking easily and I think the MBA train has sailed for me). I know within a few years, I will have an interesting crossroad in my career to try to figure out.

I worked in corp dev for a Fortune 50 company for a few years before exiting to a more strategic role leading a business unit (which a lot of colleagues do, either through work on a high profile deal or because of the hours). Again, like many of the responses, it's really difficult to tell. Some places have great work life balance, others don't.

mrharveyspecter said it pretty well. Completely agree about time wasted analyzing potential deals that we knew are going to get killed. Modeling, deck building, diligencing, etc. All of that going to waste because some hot headed BU lead wanted to make a sexy M&A deal happen for his org. This happens all the time and it can get frustrating. It's really no different from making a pitchbook that you know isn't going anywhere.

In my group, it was led by a couple wannabe bankers who boasted about working 24/7. Not a ton of the analysts/associates were thrilled about that mentality since they were certainly not paid the same (base was a definite hit, and bonus is a joke because it had to adhere to the HR company wide ranking standard). If you weren't working at least 60 hours per week, it was a ding on you. Again, it depends on where you are. I know an ex-colleague who is heading corp dev in a smaller firm and his hours are quite normal (like 40).

I have found it difficult to explain my role and function to recruiters at the time. Unless you're looking to do IB (which I've had a couple colleagues go to), most mainstream recruiters and corporate HR teams aren't going to know exactly what "corporate development" does since the term sounds really vague. I had my elevator pitch down to concisely explain the role in two sentences because I don't want any confusion on what I did.

I would say that overall, it was a valuable experience that exposed me to some great deals and leaders in the company. However, because in my particular situation, the politics and culture of the group was set from the top, and I didn't feel it was a good fit for me on a work/life perspective to continue my career in that team, even though I had spent a few years there.