Q&A: Strategic Finance / Corp Dev at late-state technology company (series C+ / $2bn+ valuation)

Hi all - thought I'd give back to the community that helped me a lot when I was in your shoes by doing a Q&A. 

Some background on me:

  • BS in Business from top 25 university
  • Worked as an analyst in the M&A group of an EB / advisory shop
  • Currently on the strategic finance team at a late-stage, pre-IPO tech company (Series C+ / $2bn+ valuation)
  • ~4 years of experience across both banking and my current role

Open to answering any questions you may have - feel free to ask away.

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Comments (49)

Nov 25, 2020 - 10:27am

Thanks for doing this! A few questions from me if that's alright:

  1. What motivated your switch from banking to Corp strat/dev? From what I see here the primary reasoning is hours, but have you really seen that much of an improvement in your WLB?

  2. Did you take a pay cut? If so, put bluntly, how badly did it hurt? How did you rationalize a drop down in pay without it affecting your ego in what seems like such an ego-driven field?

  3. How did you make the transition to the new role and when? I know corp strat roles are more filled as-needed, but did you start looking as a first year analyst, or did your new position only recruit for second year analysts+?

Thanks so much for doing this! May have some more questions later if that's okay :)

Most Helpful
Nov 25, 2020 - 12:40pm
  1. Mainly the hours, but I also realized that going to a solid tech company doesn't necessarily close as many doors as conventional wisdom typically believes (e.g. a guy from my team just left for an investor role at a pretty solid VC fund, top bschools accepting a higher % of tech applicants, etc.). WLB has significantly improved over banking - I typically don't work past 7/8pm and no more random staffings and fire drills on Friday afternoons. I became somewhat disillusioned with the thought of doing PE as many of my friends made the switch and get crushed just as badly as they did in banking. I also have a lot more autonomy in my actual job since there's no more VP or associate breathing down my neck the entire time. 
  2.  My base salary is higher than my analyst salary, but these roles obviously don't have the lucrative banking bonuses. That being said, I have equity in my company and we're actively working towards a liquidity event which could potentially be worth  more than my analyst bonuses. It didn't hurt too badly for me, but I also don't consider myself to be a huge victim of lifestyle inflation/golden handcuffs. In regards to rationalizing the pay cut, I made sure to diligence the teams I would be joining to make sure they came from solid backgrounds as I figured I would be able to learn the most from these people and the short-term paycut would pay off in the long-run. I've also come to realize that no one really cares about this type of thing - I don't think any of my friends envy our other friends working 80+ hours/week at $10bn+ PE funds. 
  3. I mainly started recruiting during the latter half of my second year and made the transition shortly after my second year in banking. I think the baseline is generally having one year of experience, but the main thing would be optimizing your resume. Once you hit that one YoE threshold and have a polished resume, you should be able to get a decent number of looks.
Dec 7, 2020 - 10:56pm

Hey man thanks for doing this. So would you say 9-7 / 9-8 or something like that is your norm each day w/ little weekend work, so 50-60 hours per week on average probably? Also do you think this is representative of most strategic finance roles at the stage / size of tech company you're at ? Just asking as I'm in the final stages for a very similar role, and am trying to get a better sense of the actual work / life balance offered.

Nov 25, 2020 - 10:31am

Hi thanks for doing this, interested in potentially making a similar transition as well. I had a couple questions:

1. Were you in a tmt group? And do you find being in a tmt group is generally necessary when trying to move to such roles?

2. How much of your job is split between Corp dec and strategic finance? 50/50? And are these combined roles hard to find?

Thanks!

Nov 25, 2020 - 12:50pm
  1. I was in the technology M&A group at my old firm. I don't think it's a hard requirement, but it's definitely advantageous as you already have exposure to/an understanding of things you'd need to know in tech (e.g. unit economics, cohort analysis, SaaS metrics, etc.). You should still get interviews if you come from a conventional M&A or coverage group. The only time your group would be more of an uphill battle, from what I've seen, would be when you're coming from a more niche industry focus (e.g. FIG, RX, etc.).
  2. My team is good about letting people decide on which projects we want to work on. I probably split my time 70/30 between strategic finance and corp dev, but that's mostly because I told my team that I'm most interested in that area. Combined roles are probably more common at pre-IPO companies, but in general most companies seem to split their corp dev and strategic finance functions.
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  • Associate 1 in IB - Gen
Apr 3, 2021 - 11:37pm

Perhaps dumb question - what is the distinction between strategic finance and corp dev? I always thought they had a lot of crossovers, with the former doing more FP&A related work and latter focused purely on M&A

  • Analyst 2 in IB-M&A
Nov 25, 2020 - 10:53am

As another analyst at an EB looking to jump into tech corp dev/strat/finance roles really appreciate you doing this. Have a few questions - 

1. What would you say is the minimum amount of experience you need before making the jump? 

2. Do you have to be part of a tech group to make the jump? Or if you have related experience in consumer/media will that work? 

3. What is the typical pay range for these roles?

4. How do you go about recruiting for these roles? I assume no headhunter help. 

Nov 25, 2020 - 1:44pm
  1. 1 year is generally the baseline and after that it's mostly about optimizing your resume. I think PE and strategic finance resumes have a fair amount of overlap, but you want to include points about how you collaborate across multiple stakeholders / parties and take on a lot of responsibility versus building LBO models and calculating returns.
  2. Being in a tech group is advantageous, but not a requirement. The main advantage comes from learning about the common SaaS metrics and KPIs that companies and investors look at. That being said, coming from a traditional coverage group (e.g. C&R, media, etc.) won't hold you back as long as you show you know the important tech metrics that people typically look at - there's a lot of resources online about this, so it shouldn't be too hard to find.
  3. Pay range can vary by company, but tech salaries should be strong enough to where you shouldn't have to take a pay cut after going to your next role, at least for base salary. It's also pretty common for companies to include equity in your comp package so also keep that in mind.
  4. I found most of my roles and current role through LinkedIn. I set-up alerts for job titles in geographies that I would be open to working in and checked those daily. These roles have some headhunter coverage (e.g. Amity/Dropbox, Oxbridge/Roblox), but you're right that there probably aren't enough opportunities to be able to solely rely on headhunters for help.
Nov 25, 2020 - 3:56pm

how much of the job is ad-hoc admin-related stuff and what specifically does that entail? i.e. in pe, the admin stuff is portco stuff like doing valuations, employment agreements (IMO), managing trackers

also, what's the furthest you've gotten on a deal, and how much worse is it than banking / deeper does your diligence go?

is working with other departments (i.e. marketing, engineering) a huge part of your job, and what are the nuances of that?

how often do you feel like you're constantly on call?

Nov 25, 2020 - 9:10pm

Not a huge amount. Most of the admin work that I do involves sending reports on business updates to the CFO. However, that being said, my team also has to manage the preparation of the quarterly board materials and board KPI updates which tends to be a lot more time consuming/annoying.

I've closed one deal since I joined. We work cross functionally on processes, with my team managing the process, so there's a pretty good division of labor according to each department's functional area (e.g. legal, engineering, etc.). My personal responsibilities would be building the model and any other financial analysis that needs to be done, which is similar to banking, but with less BS work, such as having to create decks for everything, pull logos, etc. My entire team is also ex-IB or PE so that also helps things move more quickly.

It's a pretty big part. The best way for me to describe it would be as an banking analyst you're able to utilize various departments based on what you need (e.g. presentation center, research center, India-based outsourcing services, etc.) and that's kind of the same concept when you work with other departments. Instead of having to find something you have no expertise in, you reach out to other teams for that information, whether it be legal, engineering, etc., to move a project forward.

Not very often. The only instances where I felt like I was constantly on call would be the days leading up to a board meeting, but even that is way better than what I experienced in banking and I never felt like there wasn't a light at the end of the tunnel. 

Nov 25, 2020 - 9:44pm

thanks man, i appreciate the answers!

do you think you would hate your job if you weren't 100% interested in the tech subvertical that your company is in (do you mind sharing)?

do most folks in your company proactively stay on top of the sector news, or do company specific events take priority/

also, how do you feel at the end of a workday - do you still have enough energy to research stuff you're into / the sector or are you pretty much ready to relax at 6pm?

Nov 25, 2020 - 4:37pm

Are you in the bay? And do you feel like there is a good path to management roles at these high growth companies from strategic finance/corp dev roles?

Also how much of your strategic finance work would you say is typical routine fp&a stuff vs how much is actually 'strategic'?

Nov 25, 2020 - 9:39pm

I don't want to say too much about my location, but I'm in a tier 1 city (SF/LA/NY). I'm not sure about at my current company as the management team is pretty built out and many of them have strong backgrounds even by WSO standards. That being said, I think there is a good path as long as your team has a lot of exposure to departments across the organization and that you personally are able to take on as much responsibility as possible. I think I'd be well positioned further down the line to move up the corporate ladder (probably at other earlier / growth stage companies) because of the broad experience I've had here so far and because I feel like I've been able to take on a ton of responsibility (my team is very lean).

Almost none. We have a separate FP&A team, but a lot of companies do refer to their FP&A teams as "strategic finance" so it's important to diligence that when looking at an opportunity.

Nov 25, 2020 - 9:43pm

You just want to show that you've done things as close to what they have in the job description as much as possible. I've noticed that a lot of tech companies expect people to have worked "cross functionally" which isn't necessarily possible if you're a banking analyst, so it's important to explain how you have experience managing the expectations of multiple parties in your resume. This can be anything, including having to coordinate senior bankers, legal advisors, capital markets team, etc. I personally found that once you do this, interview conversion rate goes up by a lot even without networking.

Nov 25, 2020 - 7:57pm

What does the work entail for strategic finance and corp dev? What's the difference between strategic finance and FP&A, if any?

Array
Nov 25, 2020 - 9:51pm

The work itself is pretty similar to banking with the biggest difference being less unnecessary work. In banking it felt like a deck had to be created and turned for everything, but people here tend to be much more efficient and don't expect new decks/perfectly formatted slides for everything. Aside from that it's a lot of building models to analyze scenarios (e.g. product launches, partnerships, expansions opportunities, M&A, fundraising, etc.) and synthesizing that information whether it be through excel outputs or on slides. It's also a lot less processing work and you actually have to think a bit more.

The main difference is strategic finance tends to be more special projects for the CEO/CFO while FP&A is more along the lines of forecasting and preparing the budget. 

Nov 25, 2020 - 10:02pm

Not personally at my company, but I think it's pretty common across the board.

As mentioned above, I'd imagine it would be harder if you're coming from a less conventional group (FIG/RX) but I think most M&A and coverage groups would probably be fine as long as you have good deal experience and show that you know how to evaluate technology companies. 

  • Analyst 3+ in IB - Ind
Nov 26, 2020 - 6:24am

How hard is the job compared to banking? The main things I've found difficult about banking are the fast-paced nature of things (people expecting another turn ASAP) and the lack of guidance (many times, I'm given a piece of financial analysis and don't know where to even begin or progress until an Associate helps me out throughout the process). I noticed you said you have to think a bit more and that you are taking on more responsibility than when you were an analyst. Do you feel comfortable asking questions to get help and how often do you get stuck and can't progress in your analyses / the work you do? For someone who struggles with these two aspects of banking, but is interested in strategic finance / corp dev, do you think I would do well in these fields? I guess what I'm trying to imply is that do you know if these fields are a good and easier option for someone who struggled a lot as an investment banking analyst? Or is this just banking with less hours?

Also, what do you think are the best parts of your job as a whole? I know you mentioned being able to learn from seniors while also keeping exit opps rather open, but what else do you enjoy about the job like the culture, tech company perks, etc.? 

Nov 27, 2020 - 11:02pm

I think the nature of the work is the same (e.g. you're still doing analysis in excel and finding ways to present that information, whether it be on slides or excel outputs), but the types of analysis are more based on internal company data instead of trying to find information to show clients what they want to see. Due to that, the work tends to be much more intuitive in my opinion. For me personally, there's a much bigger sense of camaraderie/everyone being on the same team vs. banking where it felt like people would try to push off as much work as possible to whomever they could. That said, I am expected to operate with a bit more autonomy, but on the flip side the turnaround times aren't nearly as unreasonable as those of banking (e.g. I almost never had a project assigned to me late afternoon that had to be sent out the same night).

I think the biggest thing for me would be more autonomy. If someone on my team tells me they need something the next day or by the end of the week, I'm able to budget my time however I want as long as I finish it on time without being micromanaged. I also appreciate how it feels like my company is able to get things done pretty quickly instead of having to jump through a bunch of internal hoops each time we went to do something (basically it feels like things are just as productive as they were in banking but with more reasonable deadlines and better hours). Aside from that catered lunch/dinners, fully stocked kitchens, generous gym stipends, etc. are also really nice. 

  • Analyst 3+ in IB - Ind
Nov 28, 2020 - 1:14am

Pretty different environment than IB. So would you say it's a more dialed down version of IB? Are the expectations just as high as in IB? Looks like based on your prior responses, that people care a little less about the formatting of slides and things like that, but given they're all former IBers / consultants, they still have pretty high expectations. 

Nov 27, 2020 - 11:10pm

Base salary is currently ~$110k, but I should be up for promotion in a couple of months (the move for me was pretty lateral in terms of title) so that should go up. In addition to that, I got ~$50k of equity when I joined (with ~60/40 split between options/RSU) and you generally get more each year, however the options have a vesting schedule.

In terms of cost-benefit, comp wasn't too important to me when I was wondering offers. My main consideration was to at least not take a pay cut on base salary. I mainly prioritized joining a team that had people with strong backgrounds (e.g. IB/PE backgrounds, graduated from top bschools, etc.).

  • Analyst 1 in IB - Ind
Nov 26, 2020 - 9:28pm

Thanks for this, several questions from me:

1) Would you consider biotech/pharma one of the "niche" coverages that disadvantages you? 

2) Thoughts on marginal benefits of staying past 2 years -- if you know you want to end up on the corporate side eventually, is there significant value add (learning, add'l pay/title bump) staying 3-4 years instead of leaving right after your analyst stint?

3) Related to the second question -- any concerns about pay/slower advancement coming in at a junior level vs. a more senior role?

4) What did the interview process look like?

Nov 27, 2020 - 11:32pm
  1. Not too familiar with the types of analysis you do in biotech/pharma so I can't really say for sure. A lot of it depends on how the modeling work differs from those in more "standard" industries. I think there's also an element of showing you'd be interested in making the pivot from healthcare to tech.
  2. I don't see a huge advantage of staying past your analyst program as you can learn almost all of what banking has to offer within two years. The main benefits I see would be higher pay, more client exposure, and some managerial experience. If you're fine with the hours/lifestyle, it won't hurt, but it doesn't necessarily set you apart either.
  3. Not too much, things are much more unstructured on the corporate side in terms of comp, title, etc., so you can actually increase you salary much more quickly by changing jobs every 2-3 years or so. So while the pay bumps may be less lucrative compared to banking pay bumps, you can still materially increase your salary by changing jobs as frequently as possible (ideally negotiating title bumps as well).
  4. The interview process is pretty intense (less so than PE, but it's still pretty competitive and a ton of work). For my current company it was 2-3 rounds of interviews with a super day at the end, and I also had one week to do a case study which involved building a model and presenting it. Interview questions mainly centered around business case-type questions and not a lot of banking-esque technicals.
Nov 27, 2020 - 6:40am

In terms of actual role description, what would you say is the difference between a "Strategic Finance" guy and a "Corp Dev" guy? I know you bucketed them together so assuming it's all kind of the same but just curious if there's a real differentiator 

Nov 27, 2020 - 11:35pm

Strategic finance is more ad hoc projects for the senior leadership team (e.g. evaluating geographic expansion opportunities, new product launches, fundraising, IR, etc.) while Corp Dev is more internal M&A from what I see. That said, the two can have some overlap and the definitions can vary between companies - Corp Dev could be the same as strategic finance, etc.

  • Prospect in Consulting
Nov 28, 2020 - 12:29am

If you stay in banking/consulting/PE for a few extra years which translates into fast compensation growth, when one makes the transition to tech will that higher salary from a previous job help to make your salary higher when you join a startup?

Nov 28, 2020 - 3:00pm

Thanks for doing this and appreciate the time - just a couple here:

1. In the interview process - what kind of questions did they ask you outside of the case study (were they primarily industry and company specific? tech trends etc)

2. What kind of resources do you lean on to get a foothold and understanding of your industry / tech / megatrends (i.e. podcasts, books, news subscriptions etc)

3. Just a broader question in general - what are you trying to achieve out of the strategic finance / corp dev role? Do you have plans to climb the ladder or go into ops..

Dec 1, 2020 - 8:53pm
  1. It's a lot of analytical questions to see how you think about business problems and scenarios (e.g. how would you think about new product launch, how would you model a revenue build for x company, what would the P&L look like for x company, what KPIs you would use to evaluate a company, etc.). Unless you're coming from a group / firm that covers the same industry as the company you're interviewing for they probably won't expect you to know industry specific stats. That said, you should have a good answer to why you're interested in that company. 
  2. I came from a tech M&A group when I worked in banking so I got a lot of my understanding of SaaS and tech companies from there. But the best resource I've found would be this and this. Another helpful thing would probably be to read S-1s for SaaS companies when they come out as they talk a lot about common KPIs, etc. in there.
  3. As of now, probably try to climb the corporate ladder and try to become the Head of Finance or something similar at an earlier stage company. But my main criteria when I was deciding post-banking offers was that I want to go to a group with broad exposure and responsibilities and work with smart people to try to preserve as much optionality as possible.  People who left my team have gone to other corporate jobs and investing roles so I don't necessarily think I'm pigeonholed.
Dec 1, 2020 - 9:12pm
  1. My team's pretty small, but a few worked in PE and all of us came from banking. The leadership team more broadly has a lot of MBB and HBS/GSB, which is why I don't really see a clear path up.
  2. More so adult in the room. While engineering/product does get the most investment, we do have a fair amount of say in regards to the strategic direction of the company. If I had to categorize it, it would probably be more of a collaborative relationship than us having to follow their lead and vice versa.
Dec 1, 2020 - 11:47pm
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