Run Corp Dev at PE Portco, or Mid-Level Corp Dev at F500?

Hey guys,

I'm a VP in growth equity currently in process for a couple different corp dev opportunities (in tech)

Option A: Your classic corp dev org at a giant public company, would be Director-level in an 8-10 person group in a business that has historically done a good cadence / frequency of M&A

Option B: Would be running the corp dev function for a PE portco. Report to CEO, but not really any full-time junior resources (probably can tap in FP&A, etc. when needed). The company is ~$500M TEV today and just recapped with a new sponsor who wants to be acquisitive

My inclination is that Option B is more appealing from a career perspective (given level of profile / responsibility) but my big concern would be the lack of mentorship. In theory you get guidance from the PE sponsor, but I know my career development isn't high on their priority list. You probably learn a lot from the CEO but that would be more general mentorship since they've never done the M&A job.

Anyone have thoughts about how appealing each is? These seem to represent the two main thrusts of corp dev jobs open to someone at my level, so a general framework on how to evaluate each is interesting. 

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Comments (18)

Oct 18, 2021 - 1:46pm

Have been contemplating something similar and am leaning towards Option B. My 2 cents based on personal experience.

Have pitched a lot of ideas to Director level corp dev people at large cap tech. I've found them to generally be gatekeepers and idea filters for the product groups. Very hands on with execution, not very involved in strategy. Also very VERY siloed in terms of product coverage and limited in their ability to be opportunistic. Recently cold pitched an idea to one of the cloud services, and was basically lost trying to connect to the right Director covering that particular product. Was very surprised that at least the ones I spoke with didn't talk to each other. Granted I've only ever pitched MM and product tuck-in type ideas and not transformative or mega deals.

For me, the small team dynamic at a PE portco just means having more control over my personal development and more opportunity to grow. I love that kind of independence and would like to supplement execution work with a seat at the table when it comes to strategy, particularly with an acquisitive sponsor. The room to find opportunistic acquisitions, build consensus among management, board and sponsor just really appeals to me. I view it as a path to supercharge my career track and take me to the next level.

Great opportunities regardless, good problem to have. Congratulations and all the best.

  • Analyst 3+ in IB-M&A
Oct 18, 2021 - 2:04pm

In Corp Dev at a tech company and this comment is spot on. We truly are the gate keepers. You come to the corp dev team with a deal we speak to you about it and figure out who sees it/if they see it. We also have in house strategy but you would be shocked at the lack of communication there. Things we think are good fits are "not in the strategy" more often than not. 

Oct 18, 2021 - 2:48pm

We also have in house strategy but you would be shocked at the lack of communication there. 

This part was a real shock. I mean I know large orgs can be siloed and unwieldy but you'd think at least in a sector like tech, there is some flexibility. Big driver of my hot take hypothesis, that organic innovation at mega cap tech is basically dying and is all about acquisitions.

Oct 18, 2021 - 2:28pm

OP - are both opportunities in HCOL cities (sf/nyc)? Wondering about the comp differential + equity packages between the two, which I imagine is probably an important input into your decision making process.

My two cents: If you like the independent, scrappy aspects of your current role, I think option B obviously makes more sense; whereas option A is more if you want climb the corporate ladder.

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Oct 18, 2021 - 6:00pm

Somewhat related....but I run a large portco biz unit for a top CPG corp VC and I would advise you that my life as a director level employee (similar to B) vs. a comparably senior guy in our main organization are hugely different (option A). Going to a silo-ed environment sucks & I would turn down an promotion if it led me back to a role in our parent co.

Just getting people in a massive public co to 1) take a risk 2) innovate is really tricky. Once people are comfortably making 200-300k in a 40-50 hr corp seat, nothing that could raise their risk profile will happen 

Long story short, option A could lead to a lot of frustration trying to get shit done & be a dynamic contributor. 

Oct 18, 2021 - 10:54pm

If you're looking for continued mentorship and development regarding executing deals & M&A, remain in private capital investing. The opportunity exists in the large public company space, though you're looking for the unique situation where you'll learn from the exceptional CEO/CFO/C-Suite deal advocate. Portfolio company M&A lead will likely offer higher monetary trajectory + greater responsibility, ability to shape the company, develop reputation in market as a decision maker, among many other traits. Portfolio company route will almost certainly include limited bandwidth support from the organization or the sponsor (associate/VP say they will lean in, but they'll really just take shots at the diligence packs and say "have you thought about? would be nice to see...") and less perks that may come with being at a larger company (willingness to spend $ during early stages of diligence).

Oct 18, 2021 - 11:20pm

Did you feel you got similar amount of looks between firms that look like option A and firms that look like option B? My inclination was that, at the VP / Director level, IB guys would get way more traction with option A type companies and PE guys would get more traction with option B type companies.

It seems you have some solid responses here on the pros and cons. As one other data point, I have a few friends who left PE around the senior associate level and went route B. The biggest complaint from a couple of them is the lack of support beneath you. Going "backwards" to spending time pulling financials out of tiny companies' shitty financial systems / quickbooks and laboring to just get data into a workable format after 5-6+ years of deal work can be frustrating. One friend went to a company where he has analysts below him (and one guy above him) and he seems pretty happy. I'd try to get concrete feedback on what resources you will / won't have supporting you. Unfortunately I don't have any option A data points so I can't compare and contrast.

Oct 20, 2021 - 6:45pm

This is good point and I would recommend to OP that if he's considering Option B he gets confirmation that he can leverage the sponsor's junior team for time-sucking tasks like converting financials into a workable model. Your time should be spent on more valuable tasks.

Oct 19, 2021 - 12:56am

Had opportunities for both Options A and B when I left banking, took Option B and haven't looked back. As others mentioned, too many Corp Dev groups are 9-5 looking for reasons to say no to deals. Option B can be intense, but any acquisitive sponsor will give you a mandate to do deals. Build a reputation in the sponsor portco world, and you'll have a job for a long time. 

"I don't know how to explain to you that you should care about other people."

  • 2
Most Helpful
Oct 19, 2021 - 2:44am

These are just night and day different jobs. It all depends on what you're optimizing for.  

Option A - first of all, depends a lot on how acquisitive the company is. At the right company, you can get a lot of valuable deal reps very quickly, but at a different company, you may end up being hamstrung. It's a good thing that the company has been acquisitive historically, but things can always change. And the respect Corp Dev gets varies a lot. At some companies, Corp Dev is just an execution team. At others, they're driving the strategy. So your mileage just varies a lot.

I would say in general, the better the company is at developing new products in-house, the less respect Corp Dev gets. For example, even though Facebook and Google are very acquisitive, the Corp Dev team isn't really driving a lot of the decisions, the product leaders do and the Corp Dev teams are there to execute. Still, you do get a lot of deal reps. Meanwhile at places like Adobe and Cisco that haven't been able to hire top tier tech talent for years, Corp Dev has a lot of internal power. Those teams in particular are great places to be. Not sure what things look like in other industries.

But in all cases, you'll inevitably deal with much more hierarchy and politics vs. PE. On the other hand, the scale of the impact for your largest deals will be orders of magnitude greater than what you work on at the PE Portco.

Option B - you'll have a lot more autonomy here and you'll feel like you're tangibly making more of an impact on the company. You will probably have a lot more financial upside, but on the other hand, there's also a lot more risk. A bad acquisition or two can absolutely wreck an LBO, and guess whose feet will be held to the fire. Whereas at a big F500 company, all but the very largest deals won't make a dent in the company's P&L. If a small acquihire or tuck-in goes sideways, nobody's going to give a shit. If a deal that is large enough to matter goes sideways, enough senior execs will have their signatures on it that it won't just be corp dev's fault, and the buck's definitely not going to stop at the director level unless it was clearly an execution issue that was overlooked.

You're also going to have a much more lean team - you'll probably be responsible for a lot of the post-merger integration work whereas the F500 co probably has a separate team for that.  

Also, once you go Option B, you're kind of closing your door to ever working at a F500 Corp Dev team. You might be able to jump to incrementally larger PE-backed companies over time, but you're unlikely to ever get looked at if you decide you want to go into a F500 type of role. Your skillset won't translate because the amount of process/hoops you have to jump through for a F500 deal is way more complex than a PE deal and you just won't have that type of experience. You will have more experience directly negotiating deals, sourcing etc. but F500 companies won't care about that since the senior folks are doing all that anyways. The deal experience is just so different. 

On the other hand, if you go Option A, there are so many PE-backed companies out there looking for Corp Dev help, that it should always be doable to move in that direction later.  

Anyways, both are good options. Think hard about what types of deals you want to do over the course of your career. For me, I would be drawn to getting the chance to work on deals that show up on the front page of the WSJ. I would have a hard time looking back on my life thinking yeah, I executed a bunch of roll-ups for widget companies that nobody ever heard of. But to each their own.

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  • Associate 3 in PE - Growth
Oct 19, 2021 - 10:26am

I lived through option B and think it's a better pick.

Portco is great to work in imo

Oct 19, 2021 - 4:44pm

Am wrapping up my first year as a VP at a mid-sized growth fund (think Level, Five Elms, Frontier); previously did 2.5 years as an Associate (skipped Senior Associate title) and 3 years of consulting

Oct 20, 2021 - 6:37pm

I think it just comes down to whether or not you believe you're ready to run the show and all of that entails - sourcing leads, closing deals, managing external and internal relationships, mentoring eventual junior members of your team - go with Option B. But if you think you're not quite ready - and there's no harm in that - then go with Option A to try and refine your weak points to get ready for the next Option B-type role.

However, I'll caveat all of this to say be careful putting people on pedestals. I can promise you most Corp Dev heads aren't excellent at every phase of the process either and they still do just fine. 

Oct 29, 2021 - 8:03pm

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