#MandAjob #FinanceBackground #CorporateFinance #Startingfromscratch
Hi there! π Have you found yourself in a sticky situation where you’ve stumbled into an M&A job with no finance background? π€― Don’t worry, you’re not alone! Many individuals face similar challenges when transitioning into roles that require financial expertise. But fear not, as I’m here to help guide you through this daunting process and provide you with practical solutions to bridge the knowledge gap. Let’s dive in!
## Understanding the Challenge
As the title suggests, you’ve landed in the world of M&A without a solid foundation in finance. Your job responsibilities now include reviewing CIMs and making recommendations on potential acquisitions, tasks that require a deep understanding of financial concepts. This sudden shift can be overwhelming, especially if you lack prior experience or education in finance. But fret not, there are steps you can take to quickly get up to speed and excel in your new role.
## Practical Solutions
### 1. Start with the Basics
Since you have no background in finance, it’s crucial to begin with the fundamentals. Familiarize yourself with key financial terms and concepts such as EBITDA, cash flow, ROI, and financial ratios. Online resources like Investopedia and Khan Academy offer comprehensive guides on corporate finance for beginners.
### 2. Enroll in Courses
Consider taking online courses or certifications in corporate finance to deepen your understanding. Platforms like Coursera, Udemy, and LinkedIn Learning offer a wide range of finance courses tailored to different skill levels. Investing in your education will pay off in the long run as you gain the knowledge needed to excel in your M&A role.
### 3. Seek Mentorship
Don’t be afraid to reach out to colleagues or mentors in the field of finance for guidance. Your boss, who has a background in PE/IB/Corp. Dev., can provide valuable insights and mentorship to help you navigate the complexities of finance. Networking with professionals in the industry can also open doors to learning opportunities and growth.
### 4. Practice, Practice, Practice
Apply your newfound knowledge by actively engaging in financial analysis and decision-making tasks. Practice reviewing CIMs, conducting financial due diligence, and making recommendations on potential acquisitions. The more hands-on experience you gain, the more confident you’ll become in handling financial tasks.
## Real-Life Example
Take inspiration from individuals like yourself who have successfully transitioned into finance-related roles without prior experience. Just like you, they faced challenges but persevered through self-study, mentorship, and practical experience. Use their stories as motivation to push through any obstacles you encounter on your finance learning journey.
In conclusion, navigating an M&A job without a finance background may seem daunting at first, but with the right mindset and dedication, you can overcome this challenge and thrive in your role. Keep learning, seeking guidance, and applying your knowledge in practical scenarios to build your expertise in corporate finance. Remember, every step you take towards improving your financial acumen brings you closer to success in the M&A world. You’ve got this! πͺπ
If you can’t crack into IB/PE/Corp Dev from a finance angle, try from a project management angle if that interests you. Remember, a significant portion of an acquisition lifecycle involves project management, which you’re already familiar with. Use this as a stepping stone to gain valuable experience and eventually transition into finance-related roles.
Ooof if youβve never looked at financials in your entire life, this is going to be a massive crash course and your brain might start to hurt from learning a crap ton about accounting and corporate finance.
Firstly understand what your boss is asking you to do. By reviewing CIMs and looking at the financials, theyβre asking you to evaluate whether this is a good business, key questions are whatβs the projected revenue growth rate, whatβs the EBITDA margin, how much cash does the business generate, what is its working capital like, what capex needs does it have. Secondly is how the business fits into your own companiesβ strategy. If youβve done an integration before, then you might already have a strong indication of why company A buys B to begin with.
In terms of reading and studying, I will be interested in hearing others perspectives. I found what really hammered into me the accounting basics was doing CFA level 1. By no means Iβm saying you should take the exam, but download the CFA accounting section books (from various and make sure you understand the basics on what is revenue, COGS, SGA, EBITDA, D&A, PBT, capex etc etc.
Be aware your boss can easily rip apart your analysis because theyβve done this for far longer than you have, so donβt have any shame if your first go at understanding it is a complete shambles. But if theyβre a good and understanding boss, theyβll know youβre starting from zero and can help guide you and tell you where youβre going wrong etc.
Well that’s a very unique situation to be in. I assume from managing and presenting output of due diligence streams you have a decent know-how in finance and accounting (in order to guide / challenge the advisors as the case may be) and the place where you don’t feel comfortable is in the financial modelling from scratch / building actionable data directly from financial statements? In that case a course like Breaking into Wallstreet or similar is probably your best shout, and beyond that make sure to check with your boss on a regular basis.
This is not going to be possible. Seriously.
If your boss has a background in this area you’re going to be found out so quickly. Unless you think he wants your unique perspective from an integration perspective, but it doesn’t sound like that’s the case.
Do it while applying for MBA programs and bounce before youβre fired
Can you approach it from more of an integration angle since that’s your specialty? You can provide insights like, “Hey for how much their revenue is projected to grow, those G&A expenses as a % of revenue sure look low with all the integration we’ll need to do in the near-term” or “Those synergies projections aren’t realistic given the integration timeline and TSAs we’ll need…”, etc.
You could try taking a course like this and its listed prerequisites. Ask an accountant to explain the 3 financial statements and how they flow into each other, and basic ratio analysis.
https://corporatefinanceinstitute.com/course/advanced-financial-modeling-mergers-acquisitions/
How TF are people “stumbling into” these jobs? Are you related to someone who works there?
>For background, I was a philosophy major in college and didnβt take a single business class. I went from working for a couple faith based non-profits where I essentially counseled college students for a couple years, and then stumbled into working in an internal M&A department at a 5,000 person company 3 years ago.
A good place to start is reviewing your own companyβs financials because you probably have a sense of how your company works. That will be a faster study than abstract concepts β which you can research as you go along. Otherwise keep your focus and recommendations from in the areas where you can apply your strengths like understanding if there is a cultural fit, or how the businesses could integrate, etc. Ultimately this is actually the more important part of M&A, and the reason why most deals fail. So while many are right that if you want to keep your job you should probably learn basic finance, play to your strengths too.
I was in the same situation a few years ago. Itβs was a huge learning curve but it was totally worth it.
Sounds like a great job, grats