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While large corporations will hire investment bankers to advise on mergers & acquisitions (M&A), these large corporations may also have internal M&A professionals, usually in a role known as corporate development (“corp dev”). Depending on the corporation, the corporate development role may be quite similar to being an M&A advisor at an investment bank.
Corporate development professionals focus on M&A, but they may also become involved in other roles. Additionally, corp dev professionals may have a role in sourcing a transaction and working on integrating a newly acquired company (or carving out a divested business). The corporate development team takes the lead in reviewing pitchbooks from bankers.
Professionals in this job role work alongside investment bankers to identify acquisition targets and negotiate their purchase prices, and they often assist bankers in preparing to raise equity or debt as required. Corp dev professionals will usually manage the due diligence process from the company’s perspective. Depending on the corporation, there may also be a component of FP&A or investor relations mixed in, or even interaction with the treasury department.
Corp dev professionals are one of the main points of contact for investment bankers and are typically more knowledgeable about a particular industry or business (but not always!). Since corporate development professionals obviously work at the corporation and are in a specific industry, the financial models they create may be considerably more detailed than an investment banker’s models.
Typically, only larger companies have a corporate development group. This is because the work can be sporadic, and it takes a large business to justify — and afford — having such professionals as permanent staff. While not as prestigious as investment banking, corporate development professionals get to do interesting work and they generally work less than bankers, unless there is a large deal about to close. Of course, that usually results in lower compensation relative to investment banking. Additionally, exit opportunities are not quite as robust as investment banking.
Key Skills for Succeeding in Corporate Development
Similar to investment bankers, corp dev professionals must have an excellent grasp of financial analysis and valuation, and understand how to conduct due diligence. Strong communication and interpersonal skills are critical, as the corp dev professional will work with external investment bankers, upper management, and other department leaders (sales, marketing, operations) when evaluating a potential transaction.
The personality of someone well suited for working in corp dev is similar to investment banking but in a less competitive environment:
Polished and presentable
Getting into Corporate Development
Professionals may enter corporate development straight from an undergraduate or graduate education, but this isn’t terribly common. Most corp dev professionals have already worked in investment banking, private equity, or management consulting.
However, competition isn’t as fierce as getting into investment banking, and corporations are more willing to hire diverse candidates.
Corporate Development Exit Strategies
Corp dev professionals don’t usually have access to the same exit opportunities as investment bankers. While it’s certainly possible to move to private equity, it is not very common. Corporate development professionals may have the ability to move investment banking, but this is also not very common. Most corp dev professionals remain in corporate development, either with the same corporation or after switching organizations. Some professionals move into other aspects of the business (like operations) in order to move up in the organization.
A Day in the Life of a Corporate Development Professional
A day in the life of a corp dev professional can vary depending on specific responsibilities, the size of the corporation, and whether there is a deal currently in the works. Corp dev professionals will spend a lot of time preparing a detailed financial model for an acquisition and will perform due diligence on the target company. They may also be involved in other corporate analyses like FP&A and calculating IRRs of potential projects.
Interview Prep for Corp Dev
Interview prep is critical for landing a job in corporate development. There are three main categories of questions in corporate development interviews: behavioral, technical, and prior deal experience. For behavioral and technical questions, check out our investment banking interview guide, as technical questions are similar to investment banking. If you have any previous M&A experience, you should discuss it in a way similar to how you have it written on your resume. Start with a summary describing the main deal/overview, and then dive into two or three key issues or pieces of analysis that you played a big role in, and how they impacted the outcome of the deal.
With regard to technical questions, taking investment banking courses can be an invaluable way to learn what’s required on the job before you get hired.
It’s important to start with a solid understanding of accounting fundamentals. Next, you should have a solid Excel crash course under your belt, which will teach you the basics including shortcuts, formulas, and functions. From there you can progress to financial modeling courses, which will be the basis of your day-to-day job in corporate development. By taking a few courses, you’ll learn about various industries and see different types of models.
Preparing for a Career in Corporate Development
A career in corporate development can be highly rewarding and generally allows for a better work-life balance than banking. Additionally, corporate development professionals have the ability to move up to the C-suite with experience and perseverance.
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