1. Corporate Development 101  

1.1 What is corporate development?

Corporate development is about the planning and execution of strategies. All for a single purpose – the growth in corporate business.

In particular, the work to be done by a corporate development department may include: building management personnel, launching new products, withdrawing from the market that has reached its full potential, valuing alliance, seeking and planning to buy and sell other companies (M&A), etc. 

In simpler terms, corporate development is about defining the relationship of the opportunities that exist for your company, evaluating them, and ultimately leveraging them.

There will be certain differences in this corporate development job depending on the company you are working for. 

For example, if you are joining a company in Fortune 100, your company will be doing good in business with a solid finance background, so finding profitable deals will be the main job you spend a lot of time for, instead of other small things.

On the contrary, if you are in a small company, you will spend more time on internal activities, like planning, and devising development strategy.

Specifically, we will talk more clearly in the career part.

1.2 Structures of The Corporate Development Team

Differences in scales and demands lead to the distinctive corporate development team structures within companies.

Centralized Model Hybrid Model Decentralized Model
  • typically a centralized function
  • gives the Corporation Development team a bird eye over the company’s overall activities
  • Easily identify threats and opportunities
  • Allows the team to structure deals with other businesses that fit well into the company’s portfolio
  • Most popular model
  • Lean department with very few professionals
  • Depends on internal or external resources for providing subject matter expertise when evaluating potential partnerships and strategic transactions.
  • No core team
  • Put together on a case-by-case basis
  • Including members from the various internal department,
  • Least popular model

1.3 Why is Corporate Development Important?

When evaluating the essential internal linkages within the company, potential projects, along with the associated risks and responsibilities, we see the importance of business development.

Meanwhile, forming joint ventures and carrying out M&A deals are beneficial for both sides: reducing the risk of being a lone wolf, reducing the burden of investment. And of course, the percentage of failures will also decrease.

To perform such joint ventures, it is necessary to do research and evaluate carefully.

Every successful M&A needs to have the perfect connection from within the company, as well as the consistency and understanding of the joint venture partner.

Therefore, as an inevitable trend, the demand for corporations for corporate development positions is higher than ever. Without them, the company gradually finds it increasingly difficult to consider an M&A deal – a key element in the business’s long-term development plan.

1.4 Why is Corporate Development Important?

When evaluating the essential internal linkages within the company, potential projects, along with the associated risks and responsibilities, we see the importance of business development.

Meanwhile, forming joint ventures and carrying out M&A deals are beneficial for both sides: reducing the risk of being a lone wolf, reducing the burden of investment. And of course, the percentage of failures will also decrease.

To perform such joint ventures, it is necessary to do research and evaluate carefully.

Every successful M&A needs to have the perfect connection from within the company, as well as the consistency and understanding of the joint venture partner.

Therefore, as an inevitable trend, the demand for corporations for corporate development positions is higher than ever. Without them, the company gradually finds it increasingly difficult to consider an M&A deal – a key element in the business’s long-term development plan.

1.5 Corporate Development – Future Outlook

In the process of corporate development, the desire to create new values, ​​and effective management will not be possible if companies continue to conduct only traditional approaches. Companies need to be more responsive, faster, innovative thinking and improve their ability to change according to the environment to try new business areas.

Never before have we seen M&A activities happening so bustling. Corporate development professionals, therefore, need to continually be creative and innovative to create successful deals.

2. Corporate Development Career

2.1 Corporate Development Job Description

The main work scope of a corporate development associate may involve:

Deal Sourcing:

  • Identify new M&A opportunities, screen potential M&A targets
  • Identify potential M&A targets through idea generation, industry research and screening of inbounds
  • Assess potential acquisition/partner targets for strategic and financial fit with a focus on market size, competitive landscape and valuations

Deal Analysis

Every procedure that is in need to perform an M&A with financial modeling and valuation excluded.

  • Perform due diligence 
  • Support all due diligence workstreams, including active management of data requests
  • Prepare documents utilized to deliver regular updates to leadership teams regarding deal progress, key issues/risks, and next steps

Financial Modeling and Valuation:

  • Distill large data sets and key assumptions into dynamic financial models
  • Develop and maintain financial models supporting corporate development initiatives
  • Provide valuation recommendations based on financial returns analysis (e.g., DCF, IRR, ROIC) and/or prevailing market multiples (e.g., EBITDA, ARR)
  • Update and maintain financial models based on new facts or changes in underlying assumptions

Deal Integration

You work with acquired companies to integrate their systems with your company’s

  • Coordinate with cross-functional internal stakeholders, ensuring alignment across the enterprise
  • Develop and socialize key deal summaries and integration/separation considerations
  • Liaise with internal stakeholders with respect to interpreting transaction terms
  • Actively participate in integration planning, ensuring proper knowledge transfer from deal/partnership team to key internal stakeholders
  • Monitor financial performance of acquired assets and new partnerships, including key performance indicators and a qualitative assessment of strategic factors
  • Engage in analyses around whether to buy/build/partner in pursuit of a given strategic objective

Miscellaneous Tasks:

  • Develop C-Suite/Board level presentations highlighting the progress of key corporate development initiatives
  • Prepare documents utilized to provide regular corporate development pipeline updates to vertical leaders, COO/CEO, and Board
  • Prepare documents and recommendations in support of investment committee meetings
  • Doing internal meetings/ calls with other divisions within the company

 

2.2 A Day In The Life 

A normal working day of a corporate development analyst may vary depending a lot on the company he or she is working at, and whether they are having a deal or not, and how close they are to closing, also.

Below, we have a breakdown summary of the time allocation at the work of different types of companies.

 

 

Pre-IPO Tech Startup

300-500-person growing company

The large team in Fortune 100 Company

Multi-Billion-Dollar Company

PE-owned portfolio company

Sourcing

20%

50%

0%

25%

10%

Deal Analysis

25%

20%

50%

25%

30%

Financial Modeling and Valuation

25%

20%

25%

25%

30%

Miscellaneous Tasks

30%

10%

25%

25%

30%

 

2.3 Corporate Development Career Path

At most companies, the career ladder for Corporate Development looks like this: Analyst -> Associate -> Manager -> Director -> VP or Head of Corporate Development. 

At some other firms, you can find variations as Associate Director/ Senior Director, Junior/ Senior Analyst.

At smaller companies, the structure may be cut down into Associate -> Manager -> Director. While at larger corporations, more management levels may be needed with such roles: EVP/ SVP.

Typically, it is the VP or Head of Corporate Development that takes charge of the whole team. The CFO rarely involves in the daily firm activities.

Because within this division, the turnover rate is really low, so you should expect your career progression would not happen very fast; it is very time-consuming, in fact. It normally takes several years to advance from a level to the next one. If you start as an Associate, lucky enough you can reach the Director level after 5-7 years.

If your desire is to reach a higher level, it is recommended that you switch to other functions within the company, for example, the marketing or product function. Moreover, it is very difficult to become a CFO or CEO as a Corporate Development professional as those C-level positions require broader skill sets and leadership. 

2.4 Corporate Development Salary and Bonuses

Depending on your position and the company you are working at, the salaries and bonuses may experience great differences. Here is a compensation summary table for your reference.

 

 

Analyst

Associate

Manager

Director

VP/ Head of Corporate Development

Base salaries

$50K – $80K

$80K – $100K

$120K – $140K

   

Bonuses

10%

20-30%

25%

30%

40%

Total compensation

$60K – $90K

$120K – $160K

$190K – $240K

~$300K – $400K

$500K+ – $1M

 

The figures you see above may seem impressive. But hold on a second, let’s just clarify a bit.

The compensation one receives at the Director level is the same as what an Investment Banking Associate can earn after just 3 – 4 years into the industry. So you see the effort is greater for a Corporate Director to earn the same amount of money. 

Moreover, it should also be noted that if you do not work in big city centers, these numbers will be lower.

And the last disclaimer is that stock-based pennies contribute significantly to those figures. So you should be fully aware of the equity you are getting, and your company’s valuation, as well.

2.5 Corporate Development Cultures

The key factor that makes corporate development attractive is the working lifestyle. Although the work you need to do is similar to investment banking, with corporate development, you only need to spend 50 – 60 hours a week only. There will be people who have to spend more time working, others will need less time. But the average is within the range. In deals weeks, you will probably have to work up to 80 hours a week, but will not go any higher than that.

So when it comes to corporate development, a lot of people ignore the high salary factor, looking for something else instead. In short, it is definitely a lifestyle choice when deciding upon corporate development.

3. Corporate Development Recruitment 

If you are an undergraduate, directly winning a position in Corporate Development is quite out of reach, unfortunately. As there are rarely on-campus recruiting/ networking sessions, you will be met with several challenges when looking for a position.

Some firms do offer on-campus recruitment for some corporate development roles, but they are few and far between. Interns are not common, also; So, it is best if you could find a company that has a corporate development training program, and join it upon your graduation.

 

3.1 Requirements

Accordingly, the normal entry requirements (both in terms of educational background, experiences, skills, and knowledge) for an entry analyst in Corporate Development are:

  • 1-3 years of experience in a top-tier M&A consulting firm, investment bank, private equity or within an equivalent corporate development group
  • Direct experience with executing corporate development initiatives (e.g., acquisitions, divestitures, joint ventures, partnerships)
  • Experience conducting a hands-on analysis of target companies, including developing detailed financial models from scratch
  • Superior quantitative and qualitative analytical skills combined with outstanding project management abilities, ability to apply good judgment and sense as appropriate
  • Strong intuition / first principles thinking around business performance business drivers, and overall competitive landscape
  • Advanced Excel, PowerPoint and secondary research skills required; working knowledge of Capital IQ, PitchBook, and other research platforms preferred

So, you can see that corporate development is a popular exit option for different types of finance veterans: from investment bankers to people from Private Equity, or even Boutique/ Middle Market firms. But going up from a public markets group doing equity research and asset management does not give you much of a chance. Since these roles do not give you enough exposure to deal experiences.

Having said this, keep in mind that there are less corporate development positions than there are Investment Banking/ Private Equity/ Hedge Funds jobs.

3.2 Recruiting Process

There is no specific timeline for the corporate development annual recruits. And more often than not, you will get an initial interview thanks to your network and referrals from them.

Some PE-owned companies may use headhunters’ services to seek corporate development when they are in a rush. However, that is not common.

Corporate development candidates are often recommended or are internally recruited.

If you are currently an investment banker or a consultant and want to switch to corporate development, we would recommend starting looking for a referral from now. They could be your seniors in your current company. Since as usual, people will leave the company after 2-3 years, so you should prepare as soon as possible.

In case you cannot find someone who can recommend you in your network, look for opportunities on job search sites. For example glassdoor, companies’ website, etc.

Go on LinkedIn, connect with people who are working in your desired field. Introduce yourself to them and ask about the opportunities at their companies.

The screening process for candidates for Corporate Development positions is not different from Investment Banking.

Once you have been able to secure an initial interview slot one way or another, the normal recruitment process would go on like this:

  • Stage 1: Meet with the recruitment manager. Usually, at this initial interview, you’ll talk about your resume and be ready to answer some technical questions at a basic level.
  • Stage 2: An hour interview with a higher level of knowledge required. You should prepare to be asked questions from the following categories: accounting, valuation, financial modeling, industry competency, M&A, LBO, etc.
  • Stage 3: Next, you will be challenged to show your problem solving and financial modeling skills through a case study with a time limit. 
  • Stage 4: Now, you are only one step away from your dream job. The final interview will assess how you fit the company and the role: your career objectives, your business aspiration, your motivation to work, etc.

4. Conclusion

So, you have seen that corporate development’s work scopes have so much in common with those of Investment Banking. But if you need a more balanced and relaxing life with decent pay, corporate development would be a better choice for you.  

Luckily, the recruiting processes for corporate development and investment banking are almost the same. You may want to check out our Comprehensive Guide to Investment Banking with many tips in interviews and networking that are applicable to corporate development, too.

 

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