A career in corporate development can be a great way for people to become involved in M&A without having to take the more traditional investment banking route.
Although there are less roles in corporate development - most corporate development teams are small, even at larger corporations - they can offer a stimulating and fulfilling career in themselves, and can even be a backdoor into investment banking if that’s what interests you.
We, at DealRoom, work a lot with corporate development teams and in this article we will look at some of the specifics of the career, the pros and cons, and what differentiates a career in corporate development from one in investment banking.
What is Corporate Development?
Corporate development is the department of a corporation that develops and implements the strategies for the corporate to achieve its long-term goals. In practical terms, this means that the team is responsible for the corporation’s broader strategy development based on goals laid down by senior management, mergers and acquisitions, raising capital and restructuring the company where necessary.
More resources to understand corporate development role
Here we list some very useful podcast produced by M&A Science episodes from real corporate development professionals to give you an understanding of what they are doing.
How to Build a Successful Corporate Development Function
M&A in a Corporate Development (Harvard's Teacher Advice)
Bridging the Gap Between Corporate Development and Integration
How to Evolve Your Corporate Development Function (Pro Tips)
How to Create Corporate Development Acquisition Strategies
If you have not subscribed to this podcast we highly recommend to do that, this is #1 podcast for anyone who plan a career in corporate development or work there already.
How does corporate development differ from Investment Banking?
Working on mergers and acquisitions is the main component of corporate development, but not the only component.
Corporate development and investment banking roles differ in the following ways:
- Corporate development tends to be broader in scope than investment banking: The term ‘corporate development is often used interchangeably with ‘strategy’, so unlike in investment banking, M&A is just one part of corporate development.
- Corporate development involves working for the company: Investment banking is all intermediary work, but corporate development is working for your own company on dealmaking, capital raising and restructuring - not somebody else’s.
- Greater industry expertise is required in corporate development: The fact that you’re working for one company in corporate development, as opposed to many in investment banking, means that you have to possess far more in-depth knowledge on your company’s specific industry.
How do I land a role in Corporate Development?
One of the great things about a career in corporate development is that there are plenty of routes into good roles.
Understandably, many corporate development officers (or SVPs of strategy) begin at one of the Big 4 accountancy firms, a private equity firm, or an investment bank. This equips them well for the role, particularly the financial aspects. Most industry knowledge can be learned on the job.
However, looking through some of the corporate development officers on LinkedIn, a possible - if less common - route to corporate development is through internal hires.
That is, these people work in different roles within the same company and find their way to corporate development.
This depends on the culture of the company: some much prefer to hire within, seeing the benefit of having someone familiar with the workings of their company and industry.
We highly recommend to listed this M&A Science episode and get real insights from VP of Corp Dev.
How to Get into Corporate Development (Story by VP of Corporate Development)
What kind of salary can I expect in corporate development?
The salaries in corporate development are good, but typically not as attractive as those in investment banking.
However, this may translate into a better work-life balance.
While investment bankers are often dismissive of corporate development roles, they would be the first to admit that there’s usually a better work-life balance in the latter than you would expect working at an investment bank.
Salaries in corporate development vary - remember, there are corporate development roles for every industry, so you would expect a large deviation in salaries - but for what it’s worth, here are guideline salaries:
- Corporate development analyst: $40-50k
- Corporate development associate: $80-100k
- Corporate development manager: $100k-150k
- Corporate development director: $150k+
There are also bonuses to consider on top of these salaries that can add 25-30$ in the case of analysts to 50% and above for managers and directors.
And all four categories are likely to come with some form of stock-based compensation that seeks to incentivize long-term strategy development in the corporate development department.
Education and experience required to land a role in corporate development
The experience required by corporate development officers is broadly in line with that required by investment bankers. They perform many of the same tasks, after all.
The fact that corporate development officers are so focused on one industry means that industry expertise carries far more weight in the corporate development department than it would in investment banking.
In fact, it can even give you an edge over more generalist investment bankers.
Examples of this can be seen in healthcare, where many corporate development officers have science and health-based education rather than the degrees in finance and economics that dominate investment banking.
The trend continues in other areas where technical knowledge is required.
For example, many corporate development officers at tech companies have at least some background in computer science, giving them vital insights into the role.
If you are looking for courses and training in M&A we recommend to read our article on this topic below:
Read:
Best M&A Training Courses and Certifications
Conclusion
Corporate development is a great way to practice M&A in an industry that you have expert knowledge in.
Understanding an industry and where it’s headed is ultimately the biggest value adding factor in dealmaking.
Thus, if you haven’t taken the traditional route into M&A through a finance and economics education, corporate development may offer a side door.
And as investment bankers themselves would attest, the work life balance is typically better in corporate development than investment banking.
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