Business Development Versus IB

With this COVID environment has anyone thought switching from IB to a sales / business development role? I would think that someone in IB can make a successful transition and do relatively well and make close if not more than what they do in IB after a year or so. What are your thoughts? Can you make an argument that you can outsmart others in sales from IB?

 

did a stint previously in fintech biz dev, the BD/Sales folk were mostly ex S&T or PWM, have not seen any ex-IB people during my time there - but I'd imagine it wouldn't be difficult to make the jump

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First off, I'll preface this by stating this is from my experience as well as through friends who have similar experiences.

A lot of sales/BD is contingent on which firm you are working for, vertical you are servicing & solution/product you are selling.

My experience has been within a PE backed tech firm selling IT/cybersecurity solutions to primarily financial services firms (PE, large family offices, AIM, etc). I will break out into a few sections & can further elaborate on any areas that would be beneficial.

Culture - Culture in most tech firms tends to be fairly laid back, collaborative but hard working. Depending on how your firm is setup & what your focus is on can vary a lot as well. From my experience of sales, your manager/director/etc. does not care much about what you are doing as long as you are constantly hitting your number. If you are falling short of your number, that is a whole other story. You can be prepared to be micromanaged, metrics on all your activities being tracked, etc. One important piece to note is that most companies are quick to fire under performing sales people. If you miss your quota two consecutive times without a legitimate reason, you are 99% fired. For example, I have been in my role 3 &1/2 years and during this time myself & one other person are the only two to have remained here. We roughly went through 10 other sales people in the past 3 years & my firm is under 200 people total headcount. That being said, most manager/directors are all for helping you achieve your number but they need to see you are committed & trying to achieve it, reaching out for advice, etc. In regards to hours, it is nothing like IB. On average I'd say i work roughly 50 hours a week. With that said, your hours are dictated by your clients. There have been plenty of times where I had to work over the weekend or overnight putting together a proposal for a potential client. However, there has never been a time in my 6 year career when I worked 100 hours a week.

Comp - SDR/BDR - $80-$100K BDM/AE - $150K-$300K+ Sales Manager - $150K - $400K+ Director of Sales - $200K - $500K+ VP - $250K - $750K+

Most comp is based on revenue brought in, the size of your company & the size of your team.

Once you get to the BDM/AE role, your comp is usually 50/50 (base & commission) with the ability for uncapped commission, meaning, you can earn as much as you can bring in & you tend to have a higher % paid out when you are over quota. i.e. your quota is $1M annual reoccurring revenue. up to 70% of the $1M is paid out at 6%, 80% is paid out at 7%, etc. Then when you reach 100% or $1M everything is paid out at 10% with accelerators/bonuses based on the % above quota you bring in. Most of the time this is broken into monthly or quarterly quotas with a monthly or quarterly bonus associated if you achieve/exceed your quota for that time frame. There have been many cases where AE/BDM are making $500K+ a year. Sales can be a very rewarding career if you put in the time & effort & hustle. As you move up in the ranks, you earn less actual commission but a higher base with most of your comp coming from a performance bonus, i.e. a % of revenue your team brings in against quota. In sales, you you can have BDM/AE making more than their managers/directors due to commission. This is why you see senior people with tons of experience working as AEs later in their careers because they know they can make as much money as they put in the work for. The types of sales that I have seen to make the most is SaaS.

If you are at a startup or early-stage company, equity can also be added into your comp which sounds great but depending on your role within the startup, most people don't stay long enough for it to be fully vested so beware of this when you are negotiating your comp package.

Trajectory - As I slightly outline above, sales offers many different types of trajectories. You can do the typical progression as outline in the comp section or you can stem off into areas you prefer, i.e. if you like inside sales, you can move from a SDR to a SDR manager, head of inside sales ,etc. You can also become an expert in startup inside sales where you basically work at a different startup every 2 or so years helping to build out their inside sales team & strategy. This can be the sale for enterprise sales, etc. The good thing about this is you have the ability to determine the trajectory that you are most interested in.

Post Covid - I have seen many companies lay off parts of their sales team due to Covid. When looking at this you have to try & understand if it was due to under performance by the sales person, the company hiring too many people & not properly scaling their sales team, or the company just not being stable enough to handle the environment. There will always be a need for great sales people in any environment. The important thing is to make sure you are working within a company that provides a relevant product/solution.

One thing to know about sales is you live in die by the revenue you bring in. If you are doing great & bringing in a good revenue you are treated like a rockstar. The second you start missing your number, the company does not think twice about letting you go, usually. You always know where you stand & you always know what is needed to be successful.

Hope this was helpful & happy to dive into any additional specifics that you think would be relevant to your situation.

 

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