Q&A - Corporate Development & Strategy

autism_is_good:

If you don't mind, what order did you go through these roles and what kind of factors influenced each of these transitions?

I'd rather not say the order as I don't know anyone else with my experience. I started out wanting to invest and was lucky to land a relevant job. I moved to my current role because while I like investing, I wanted to try something different and gain product experience and exposure to entrepreneurship while maintaining a finance scope. In addition to M&A and executive and board level business cases, I work on commercializing products and service offerings. The entrepreneurship aspect of my job refers to the fact that my team supports partnerships and joint ventures with startups.

td12:

what's your long term goal?

Entrepreneurship through a startup, acquisition, or other means.

Not OP, but worked in Corp Dev for a couple of years.

Never put together a 3-statement model. Not much value in a standalone balance sheet. Closest would be forecasting NWC for unlevered DCF. If the deal was material enough, we'd show proforma impacts: EPS, CFPS, ROCE accretion / dilution analysis, capital schedule changes, etc.

Metrics varied widely depending on the type of deal, but the ones mentioned above were certainly used for larger deals. Smaller tuck ins were often evaluated in a similar way to large capex requests (minimum internal IRR hurdle) with an added emphasis on strategic rationale and long term business plan.

We did show NPV. I can't say it was ever a make or break metric, though. Discount rate came from the Treasury department.

NoJobProspectsInSight:

Compitty comp comp / title?

Associate and $140 - $170k depending on a minimum bonus and above.

corpfinguy:

Could you elaborate a bit on the type of company / industry you are in? Also thoughts on perspective exit ops and career paths?

I'd rather not say but you most would categorize us loosely in financial services.

jobless123:

1. Why did you decide to go into corp dev/strat instead of staying in PE?
2. Was it challenging to move from LMM PE to corp dev (vs. being at a large well known fund)?
3. Given banking and PE experience, what kind of title (manager, director) were you most recruited for and what does comp look like?

1) LMM PE can be a great job. However, my firm's politics were such that it became a toxic place to work. We also could not close many great deals because of this dynamic. I ended up securing a more lucrative and interesting opportunity where I could have jumped back to PE if I wanted to. Lower middle market PE didn't necessarily support my long term goals either. See my my first couple replies for more details.

2) My experience was always looked upon favorably. Now if you are only targeting the hottest tech companies or something like Disney, then it would pose more of a problem if that's the only experience you possess. And I actually don't know if my background would have hindered me from those roles either as I had experience at a name brand bank as well.

3) See a previous comment about title and comp. However, I have to mention that I didn't do traditional investment banking.

You can probably get a corporate Development gig at a F500 in a less desirable location.

Think non-Chicago Midwest. Maybe ATL.

Also depends on your current location a bit. Some Corp HR considers ties or proximity to their company when pulling blind resume apps.

what's FDD?

IB experience is not necessarily a prereq. i've seen CD folks who've come from FP&A, capital markets, Big 4 backgrounds etc. Key here is to focus on companies outside of F500, likely doing deals in mid to lower mid market. Not as sexy but can still be a great experience.

You can absolutely make the leap from FDD to F500 Corp Dev, as I have done so myself. While it may not be the path most traveled, I know several others who have done it as well.

Maybe he went to work every day the past few days and will hop back on to answer when he has time?

The Stranger:

How do you perceive the major differences between your role and a role with an in-house VC at a large tech company (e.g. GV/G-Capital, M12)?

Well I would say we don't have a major VC manadate and we prefer to partner with firms and assess their capabilities before acquiring them rather than do minority investments. I can't comment on in-house teams at tech firms.

Abhizzy:

What kinds of skills would someone need acquire to get into CD/CS for 1-3 years of experience?
-Vertical/Horizontal M&A?
-CAPEX & IRR type reports on projects/deals?
-Capital buybacks/SEO (Could fall under Treasury, but have also seen CD responsible for this)

Thanks OP or doing this!

Personally, I would hire a smart person who is passionate about my industry. That's not how it works, though. The most important attributes we look for are fit, intelligence/critical thinking abilities, general business knowledge, executive presence, and technical skills. All of these attributes can be found within many backgrounds but banking and consulting have been successful fields to hire from in the past, so that's what we focus on.

Any M&A experience would be helpful. Business case and commercialization experience would be beneficial as well.