9/21/17

Hello,

Just trying to pick up your brain because I'm going to interview with another small cap private equity firm for a business development role. I was wondering what internal/exit opportunities are to be expected. Is there room for qualitative strategy work in that role or its the Associate/VP that perform all the quantitative and qualitative work by themselves?

Would you have any insight on the job itself (travel to conferences or to prospective companies' sites)?

Highly appreciate it!

Comments (23)

9/19/17

I asked the same question at a $100M AUM PE shop a few years ago. The GP said that if I was good at BD he'd want me to do more BD, rather than eventually getting exposure to investment analysis. It'll probably vary by shop, but his logic holds water.

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9/19/17

Thanks for the info. It indeed makes sense.

When you say investment analysis you solely refer to quantitative work (financial modeling) or also the more qualitative strategy work?

9/19/17

Definitely both. Effectively the job would have been to front load the deal funnel with companies that passed a basic screen, and let the investment team do the real thinking.

9/19/17

Thanks for all the info that's very helpful. I will ask questions tomorrow and circle back with you here

9/20/17

The other replies are correct. When you're a BD guy, you're a BD guy. The good news is that BD is becoming a more important and respected role as the industry gets more competitive.

Being able to deliver new (and potentially less competitive) deals is very valuable.

9/20/17

If you do BD, you'll get pigeon-holed there.

9/21/17

Yeah, my MD is pigeon holed bringing in deals - I feel bad for the guy

9/21/17

Any ideas on how much should I been asking for a entry level role (I have two years of experience but on the client side, market research related)?

9/21/17

BD analysts / associates make anywhere from $55-80k. You have to have a sales mindset and will likely be pigeonholed in that role. As you get promoted, of course depending on your performance (and the fund's performance), being a BD guy can potentially be a very lucrative career, with similar compensation investment professionals and carry allocation.

9/21/17

hmmm you can get carry from BD? Really?

9/21/17

Yeah - depending on how good you are... if you're bringing in off market deals that hit the firm's criteria, that's more valuable than an investment professional.

9/21/17

lol

"Well, you know, I was a human being before I became a businessman." -- George Soros

9/22/17

Yes, I mean if you're at a MF, its likely de minimis. But at a LMM or MM shop who's sourcing strategy relies heavily on a MD of BD, yes. I know one BD MD at a MM shop who has 20%+ pts of carry.

9/21/17

Yeah, it's a terrible position.

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9/21/17

its a sales job.

Im guessing you are the person who is vetting transactions. And as the person said, if you are good at it, they will keep you there.

Best Response
9/21/17

People are terribly single minded. I personally think BD is awesome. I mean your job is contacting and meeting entrepreneurs all day. I also consider it to be one of the most important roles in a team. No deals = no analysis to be done = no closing deals = no carry.

The industry is insanely competitive now and for funds to outperform their peers they need to bring in proprietary deal flow, hence why I believe these types of roles will be more and more common and respected. LPs jerk off to proprietary deal flow.

9/21/17

At the PE firm I was with and pretty much every other PE firm I know, the BD team is considerably lower than the Investment team in the hierarchy. No sh*t, it's important to bring in deals. You know what else is important? Knowing how to evaluate deals, how to close deals, and then how to manage portfolio companies into an eventual exit for the firm.

Don't be fooled into thinking that investment partners don't have their own networks and contacts and deals that they bring in as well.

9/21/17

Lol that moment when you suggest that getting paid 50% of whatever the investment team gets paid -- and staying there -- is "awesome."

"Well, you know, I was a human being before I became a businessman." -- George Soros

9/21/17
Futures Trader Man:

Lol that moment when you suggest that getting paid 50% of whatever the investment team gets paid -- and staying there -- is "awesome."

Thats if you're terrible. You do know that some funds pay very hefty finders fee for deals. If you are bringing in deals, they will pay you accordingly.

Also, note that there is a difference between an actual Associate/VP of BD role vs some shops hiring kids of out undergrads to just send out cold emails all day (e.g. Summit Partners). The latter does indeed suck.

9/22/17

Agreed, good points here. But even in this case, you have to want to do this in the long run. You can't and shouldn't enter these roles hoping to hop over to the investment team at some point. It's unlikely, and will constitute a huge waste of both your own time and the firm that hired you.

"Well, you know, I was a human being before I became a businessman." -- George Soros

9/22/17
Futures Trader Man:

Agreed, good points here. But even in this case, you have to want to do this in the long run. You can't and shouldn't enter these roles hoping to hop over to the investment team at some point. It's unlikely, and will constitute a huge waste of both your own time and the firm that hired you.

Very fair point indeed. If they want an investment professional, they will hire an investment professional.

9/21/17
9/22/17
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