How to Break Into Corporate Development and Make Bank Without Selling Your Soul
While other exit opportunities get more attention – it is hard to pass up moving into PE or hedge funds and buying your own country, after all – corporate development presents many attractive benefits, such as having a life and building value for customers rather than destroying the world.
Today we’re going to speak with a reader who works in corporate development at a pre-IPO tech startup (yes, you would know the name) on the West Coast of the US.
Inside, you’ll learn:
- What the recruiting process is like for corporate/business development and related fields.
- What types of people go to work at normal companies, and how to move in from banking/consulting.
- How recruiting might differ at larger companies and non-tech companies.
- How to ask your MD to hook you up with a job without getting fired.
Walk Me Through Your Resume
Q: Can you tell us about your background and how you got into corporate development?
A: Sure. I was from a non-target university and worked at a middle-market investment bank after graduation, focusing on Internet companies there.
I was promoted to stay on for a 3rd year, but around that time I was also getting interested in moving on – I stuck around mostly because the economy was in a nosedive and we were just entering a recession at the time.
A few months after that, a company we had worked with before came to my MD and said they were looking for a corporate development Associate, so the MD referred me, I went through the recruiting process there, and had an offer a few weeks later.
I didn’t want to follow the typical PE or HF path, and at this startup I would have a chance to work directly with the CEO and other senior executives and get a much better work-life balance, so I decided to take the offer.
Q: Right, sounds like a good move – you were actually employed throughout an entire recession, which didn’t happen to too many other bankers.
You mentioned “corporate development” just now – terms like “business development,” “corporate strategy,” “corporate development,” and “corporate finance” are lumped in the same category, but how are they different? What do you focus on?
A: It depends on the company, but here’s how I think about the differences:
- Corporate Development: You focus on M&A and acquiring other companies as well as setting up joint venture deals.
- Business Development: It’s less about M&A and acquiring companies / stakes of companies and more about setting up partnerships.
- Corporate Strategy: This is like management consulting, only internal to the company. You focus on planning their big-picture strategy, solving specific operational problems, and competitive analysis.
- Corporate Finance: This is more like FP&A (Financial Planning & Analysis) – you maintain the company’s finances, plan their budget, and make sure all the right controls are in place.
Of those, corporate development is most similar to banking/PE, and corporate strategy is most similar to consulting; corporate finance is closer to accounting or auditing work and you don’t need to understand deals to do it.
My job is a combination of corporate development, business development, and corporate strategy – since it’s a startup you have to do a bit of everything.
Q: Sounds like a good deal, you get to acquire companies and advise the CEO while avoiding all that boring internal budget stuff. Why did you want to do corporate development rather than PE or HF?
A: A couple reasons:
- I wanted to go to a top business school one day and I could set myself apart by doing something other than the typical “track.”
- Since I was from a non-target school and didn’t work at a bulge bracket bank, I had almost no chance of getting into the top private equity firms and hedge funds.
- Corporate development offered a better lifestyle and more responsibility than what you’d get at a typical PE firm or hedge fund – at a lot of those places you’re still an Excel jockey pulling all-nighters.
Even though it’s a startup, the company itself is very well-known and so I also received the benefit of branding by working there.
The downside is that you don’t get paid as well and bonuses are much lower, so if you’re 100% focused on making as much money as possible, you’re better off following the traditional path.
Q: What’s the recruiting process like for corporate development?
A: As I mentioned, my MD recommended me to the VP of Corporate Development at my company and so I got interviews right away without having to go through a resume screen.
Here’s what I went through:
- After my MD recommended me, the VP of Corporate Development called me to chat and find out more about my background.
- I did 3 phone interviews before I flew in to meet with the company.
- On the interview day itself, I met with 10 people across all divisions at the company, from managers and VPs all the way up to the CEO himself.
- Right after meeting in-person, I heard back fairly quickly and accepted the offer.
They focused on my deal experience in interviews but did not go into extremely technical questions as you would get in some IB/PE interviews – they cared more about what the rationale behind each deal was, how I contributed, and the main issues we confronted.
They also asked more general questions such as what companies I admire, what I like about them, and what I thought about the strategies different companies were using.
There were a lot of questions on why corporate development over the typical PE/HF choices, so you need to have a good answer there (hint: don’t say “lifestyle,” say that you want to build value over the long-term and spend your time contributing to a single company’s growth).
They tried to gauge my maturity and see how well I could think independently, because the perception is that banking analysts follow the herd and do what they’re told – which is a big problem at a startup, or any normal company for that matter.
Q: I guess that’s not too difficult if you follow the news and have your own investment / strategy ideas, though.
Are they mostly looking for former bankers and consultants, or can undergraduates and people from different industries break in as well?
A: It’s very rare for undergraduates or people in other industries to get into corporate development, unless they’re already working in a similar role at a similar company.
When the VP of Corporate Development here began searching for someone to fill this position, he was only interested in investment bankers and management consultants.
I guess theoretically an undergraduate might be able to break in if he had previous internships in the field, but if they weren’t even open to it at a startup I doubt it would be easier at Fortune 500 companies.
Q: What about if you start out at the post-MBA level in banking or consulting? Can you still move into corporate development?
A: Honestly I am not 100% certain since our hiring process is more random than what you see at big companies.
But I have seen post-MBA bankers and consultants move in – it’s certainly more possible than getting into PE or HF, since they’re looking for younger candidates.
It’s still more difficult if you already have an MBA and you’re moving into corporate development because you’ll have higher salary expectations, but it is possible – you just have to be more discreet because you don’t exactly want to go around telling senior bankers that you’re leaving.
Q: Right, that makes sense and confirms some of the other stories from readers who completed MBAs.
Are there any differences in resumes compared to banking/PE, and do you need to talk about your deal experience differently?
A: Not really, just use the investment banker applying to buy-side resume template on this site and that works equally well for corporate development jobs.
Talking about deal experience is the same – focus on how you saved money, earned money, or improved a process – and follow everything in the PE interview guide here.
Making the Ask
Q: Most people would be afraid to approach their MD and ask for a recommendation – how did you do it and how much pull did he have?
A: A lot of it depends on your bank and the group you’re in. At most bulge bracket and middle-market banks, they are used to analysts moving on after 2 or 3 years so it’s not awkward at all to bring up the topic.
I would just shoot a quick email to your MD or whichever senior banker knows, likes, and trusts you the most and ask for 5 minutes to chat about the next steps in your career.
When you work with headhunters, specificity helps and they will be able to help you much more effectively if you can say exactly what you’re looking for (e.g. “$500MM – $1B PE funds that invest in Asian real estate assets”). But with MDs and other senior bankers, you shouldn’t be quite as specific – just say generally what you’re looking for (“corporate development”) and see if he knows of anything.
Headhunters have hundreds of opportunities coming in all the time, whereas bankers hear about far fewer job openings – if you’re too specific they might not be able to help you at all.
A lot of analysts are scared to ask senior bankers for buy-side referrals, but it’s silly because senior bankers benefit by helping out their analysts – if they help the analyst get a job at a normal company or PE/HF, their chances of getting business from that firm are higher in the future.
You could even ask MDs if their friends at other firms know of anything – if they like you, they will help you out.
Q: OK, but let’s say you have an MD who’s more like Patrick Bateman. He doesn’t like you, everyone in your group sucks, and it’s an awful work environment. What do you do then? Go to headhunters?
A: No. Unlike private equity and hedge funds, headhunters are extremely rare in corporate development.
I actually talked to some headhunters when I was getting ready to recruit, and no one had any opportunities in corporate development.
At normal companies, recruiting happens via connections, networking, and even via job board postings.
There are far fewer corporate development jobs than PE/HF jobs – to even have a corporate development division, a company has to be fairly large. You don’t see 10-person small businesses recruiting for corporate development roles.
Whereas an analyst or associate would be critical even at a 5-person startup hedge fund, he would be completely useless at a 5-person Internet startup until the company got big enough to make acquisitions.
If your group is not helpful and there’s an awkward culture there, network yourself and contact alumni, friends at other banks and firms, and even former clients to see what’s out there.
If you don’t know anyone, you can go to LinkedIn, Doostang, and other job boards online and apply there – that’s less effective and you shouldn’t spend all day doing it, but sometimes it does work.
Q: What about the timing for all of this? If you start out as an investment banking analyst or associate, when should you start recruiting for corporate development roles?
A: Unlike private equity and hedge fund recruiting, which follows a specific schedule and can finish more than a year in advance of when you start, corporate development recruiting is much more random.
If you’re set on moving on after your 2nd year, you don’t necessarily need to start 18 months in advance as you would for PE – you can wait until you get your first year bonus and then start recruiting in the fall. You definitely want to start 6 months or so in advance at the minimum, but normal companies hire year-round and job openings don’t follow a set schedule.
So I don’t think there’s an “ideal time” to recruit – just make sure you get your bonus before bouncing, and that you start looking well in-advance of when you’ll be leaving.
The Road Not Taken
Q: We’ve been discussing the recruiting process at a pre-IPO tech startup – how do you think it would be different at a much larger company, or a non-tech company?
A: I have a friend who just started in corporate development at a Fortune 500 company – his team there is more like 7-10 people rather than the 2-person team we have here, and he interviewed with everyone on the team but did not speak with executives in other divisions.
They still ask the same types of questions, but interviews may be more technical and formal and your job description would be narrower – at a company with tens of thousands of employees, they don’t need you to do corporate strategy and business development and corporate development.
So your role would be more focused on one area such as just M&A deals, and you wouldn’t be interviewing with the CEO and all the senior executives as I did.
Q: That CEO interview must have been tough – what did he ask you about?
A: It was actually one of my easier interviews, because it was very high-level – similar to interviewing with Managing Directors in banking.
He spent a lot of time asking about my career vision, why I was interested in corporate development rather than investment banking, and what ties I had to the local area.
They wanted people with connections to the city I’m in, because they want you to commit to living here for an extended period – it’s not like being sent overseas with the expectation of returning home after a few months to a year.
He also asked about the main challenges of corporate development compared to investment banking, because they wanted to assess if I understood how growing a company is different from working with clients, finishing, and moving onto new clients.
Q: On that note, let’s say that you have a change of heart and want to go back to making bank or trying to buy bottles with Starwood points. Can you move back into banking or consulting FROM corporate development?
A: I don’t know anyone who has done that – just like moving from PE into banking, it’s rare because the perception is that the exit opportunity is always “better” than where you started, so you need a good story to justify your move.
If you wanted to do that, you might be able to pull it off if you have lengthier experience in banking, went to corporate development for only a year or two, and are OK moving back into IB but receiving a “demotion” for the time you spent away.
Business school may be a better idea if you want to move back into finance or consulting.
Q: That’s your secret plan, right? What are your next steps after this?
A: Wait, don’t we cover that in part 2 of this interview?
Q: Right, I forgot. Need to give everyone reading something to look forward to.
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The Investment Banking Cover Letter Template You’ve Been Waiting For
A long time ago I said that we would never post a cover letter template here:
“I was tempted to post a Word template, but I don’t want 5,000 daily visitors to copy it and to start using the same exact cover letter.”
Plus, “investment banking cover letter” is one of the top 10 search terms visitors use to find this site – so you must be looking for a template.
The Template & Tutorial
Let’s jump right in:
And here’s the video that explains everything:
(For more free training and financial modeling videos, subscribe to our YouTube channel.)
And if you’d rather read, here’s the text version:
Do Cover Letters Actually Matter?
At bulge bracket banks, people barely read cover letters.
Cover letters matter 10x less than resumes and 100x less than networking.
But there are a few special cases where they’re more important:
- Boutiques and Local Banks – Sometimes they actually read cover letters.
- Unusual Backgrounds – If you’re NOT in university or business school at the moment, you may need to explain yourself in more detail.
- Outside the US – In Europe, for example, some banks pay more attention to cover letters, online applications, and so on.
Similar to grades and test scores, a great cover letter won’t set you apart but a poor one will hurt you – so let’s find out how to avoid that.
Keep your cover letter compact and avoid 0.1″ margins and size 8 font.
With resumes you can get away with shrinking the font sizes and margins if you really need to fit in extra information, but this is questionable with cover letters.
Go for 0.75″ or 1″ margins and at least size 10 font.
With resumes there were a couple different templates depending on your level – but with cover letters that’s not necessary and you can use the same template no matter your background.
1 Page Only
Ok, maybe they do things differently in Australia (just like with resumes) but aside from that there is no reason to write a multi-page cover letter.
If you actually have enough experience to warrant multiple pages, do it on your resume instead and keep the cover letter brief.
List your own information – name, address, phone number, and email address – right-aligned up at the top.
Then, below that you list the date and the name and contact information for the person you’re writing to, left-aligned on the page.
If you don’t have this information you can just list the company name and address and use a “Dear Sir or Madam” greeting.
That’s not ideal – especially if you’re applying to smaller firms where cover letters actually get read – but it’s all you can do if you can’t find a person’s name.
If you’re sending the cover letter via email as the body of the email, you can omit all this information and just include the greeting at the top.
Paragraph 1: Introduction
This is where you explain who you are, where you’re currently working or studying, and how you found the bank that you’re applying to.
Name-drop as much as possible:
- Impressive-sounding university or business school? Mention it. Even if it’s not well-known, you still need to mention it here.
- Your company name, especially if it’s recognizable, and the group you’re working in, especially if it’s something relevant to finance like business development.
- How you found them – specific peoples’ names, specific presentations or information sessions where you met them, and so on.
- The position you’re applying for (Analyst? Associate?) – especially for smaller places that are not well-organized.
This first paragraph is all about grabbing their attention.
Example 1st Paragraph:
“My name is John Smith and I am currently a 3rd year economics major at UCLA. I recently met Fred Jackson from the M&A group at Goldman Stanley during a presentation at our school last week, and was impressed with what I learned of your culture and recent deal flow. I am interested in pursuing an investment banking summer analyst position at your firm, and have enclosed my resume and background information below.”
Paragraph 2: Your Background
You go through your most relevant experience and how the skills you gained will make you a good banker right here.
Do not list all 12 internships or all 5 full-time jobs you’ve had – focus on the most relevant 1-2, once again name-dropping where appropriate (bulge bracket banks / large PE firms / Fortune 500 companies).
Highlight the usual skills that bankers want to see – teamwork, leadership, analytical ability, financial modeling and so on.
If you worked on a high-impact project / deal / client, you can point that out and list the results as well.
This may be your longest paragraph, but you still don’t want to write War and Peace – keep it to 3-4 sentences.
Example 2nd Paragraph:
“I have previously completed internships in accounting at PricewaterhouseCoopers and in wealth management at UBS. Through this experience working directly with clients, analyzing financial statements, and making investment recommendations, I have developed leadership and analytical skills and honed my knowledge of accounting and finance. I also had the opportunity to work with a $20M net-worth client at UBS and completely revamped his portfolio, resulting in a 20% return last year.”
Paragraph 3: Why You’re a Good Fit
Now you turn around and link your experience and skills to the position more directly and explain that leadership + quantitative skills + accounting/finance knowledge = success.
There is not much to this part – just copy the template and fill in the blanks.
Example 3rd Paragraph:
“Given my background in accounting and wealth management and my leadership and analytical skills, I am a particularly good fit for the investment banking summer analyst position at your firm. I am impressed by your track record of clients and transactions at Goldman Stanley and the significant responsibilities given to analysts, and I look forward to joining and contributing to your firm.”
Paragraph 4: Conclusion
This part’s even easier: remind them that your resume is enclosed (or attached if sent via email), thank them for their time, and give your contact information once again so they don’t have to scroll to the top to get it.
Example 4th Paragraph:
“A copy of my resume is enclosed for your reference. I would welcome an opportunity to discuss my qualifications with you and learn more about Goldman Stanley at your earliest convenience. I can be reached at 310-555-1234 or via email at email@example.com. Thank you very much for your time and consideration.”
These examples cover how to apply to a bank if you’re in university, business school, or you’ve been working for several years.
If you have a more unusual background (e.g. you went to med school, graduated, started your residency, but then decided you wanted to be an investment banker), then you might need to add a few sentences to paragraph #2 or #3 explaining yourself.
Resist the urge to write your life story because no one will read it – interviews are a much better venue to prove how committed you are.
Email vs. Attachments
If you’re emailing your cover letter and resume, do you create a separate cover letter attachment?
Or do you make the body of your email the cover letter?
I think it’s redundant to create a separate cover letter and attach it, so don’t bother unless they ask specifically for a separate cover letter.
If you’re making the body of your email the cover letter, make it even shorter (4-5 sentences total) and cut out the address bits at the top.
Optional Cover Letters?
If you’re applying online and it says “Optional Cover Letter” should you still upload one?
You might as well because it takes 2 minutes once you have a good template – it’s not the end of the world if you don’t include one, but you never know what everyone else is doing and it’s not terribly time-consuming.
Cover Letter Mistakes
Remember the role of cover letters: great ones don’t help much, but poor ones get you dinged.
The biggest mistakes with cover letters:
- Making outrageous claims (“I’m a math genius!”) or trying to be “creative” with colors, pictures, fonts, and so on.
- Going on for too long – 10 paragraphs or multiple pages.
- Listing irrelevant information like your favorite ice cream, your favorite quotes from Wall Street or Boiler Room, and so on.
If you think this sounds ridiculous, remember the golden rule: do not overestimate the competition.
For every person reading this site, there are dozens more asking, “What it’s like to be an investment banker?” at information sessions.
Sometimes you hear stories of people who write “impassioned” cover letters, win the attention of a boutique, and get in like that…
…And I’m sure that happens, but you do not want to do that at large banks.
As with resumes, there are hardly any good examples of investment banking cover letters online.
Most of the templates are horribly formatted and are more appropriate for equities in Dallas than real investment banking.
Here’s a slightly different but also good templates you could use:
More questions? Ask away.
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