Why They Leave

Here's a bonus track for today.

Over the last few years, and especially since I started this blog, I have talked to a number of people who used to work in corporate development.  I always ask them why they left.  I think I have finally reached a statistically-sound sample size, and can tell you that the overwhelming majority of people who leave corporate development do so because they completed no deals during their tenure with the company.  It's not that they didn't complete enough deals, it's that they couldn't complete any deals.  Further, all of these people tell me there was plenty of deal flow, and they often signed LOI's and negotiated merger docs.  It's that their company's didn't have the cajones (thank you Guy) to close the deal.

Before you sign that LOI check your potential acquirer's track record, but more important look into the management team's record.  Does the acquirer have a new CEO or CFO (or even CIO) that has never done an acquisition?  What about their board - do the new members have acquisition backgrounds?

M&A is risky.  It takes a certain kind of management team to do deals.  Don't get pregnant and left at the alter.

Comments

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[Mitch Robinson]

I think a lot of people coming into a Corp Dev role have mis-aligned expectations...they haven't internalized the fact that they now work for a business whose core competency is building products and/or service offerings and taking them to market...not doing deals. If their only measure of success and value in the role is deals closed and they don't currently work for Oracle... they aren't going to get a whole lot of job satisfaction. To me, the Corp Dev mandate is much broader, influencing all the levers a company has at their disposal to drive their business, not just M&A. If a person doesn't value that broad perspective in their job, they are going to have a really tough time enduring dry spells in M&A activity.

[Anthony]

I totally agree with that comment. As an investment banker who made the move into a corporate development role, nothing is worst than a board that a) cannot bring itself to pull the trigger or b) pays no respect to transaction timelines and finally decides once the opportunity has been stitched up by your competitors.