Corporate development (corp dev) is a function within a company that is responsible for identifying and executing strategic initiatives that drive growth and enhance the value of the organization.
Corp dev teams are involved with analyzing and evaluating potential mergers and acquisitions, joint ventures, partnerships, divestitures, and other strategic opportunities that align with the company's long-term objectives.
Corporate development professionals work closely with other departments within their company. They work closely with sales, customer success/service and product teams to identify competitors and collaborators in their space. They work with the finance, legal, and operations teams to conduct due diligence, negotiate deals, and integrate newly acquired businesses or partnerships into the organization.
In addition to M&A, corporate development may also involve corporate strategy, business development, and innovation initiatives. The ultimate goal of corporate development is to help the company grow and evolve in a way that creates long-term value for its shareholders and stakeholders.
Corporate development teams are typically found in larger companies that have a strategic focus on growth and expansion. This can include companies in a wide range of industries, such as:
In general, any company that has a focus on growth and expansion can benefit from having a corporate development team.
Corporate development M&A typically involves a number of different steps, including the following:
Throughout the entire process, the corporate development team works closely with other departments within the company, such as finance, legal, operations, and marketing, to ensure that the strategic objectives are aligned and the transaction is executed in a way that creates value for the company and its stakeholders.
Inorganic growth, the growth achieved through mergers and acquisitions (M&A) or other strategic partnerships, can provide a number of benefits to companies.
Increased market share: By acquiring another company or merging with a competitor, a company can increase its market share and potentially gain a competitive advantage.
Diversification: Inorganic growth can help companies diversify their product offerings, customer base, and revenue streams, reducing their reliance on any one product or market.
Access to new markets: By acquiring a company with a presence in a new geographic or product market, a company can quickly expand its reach and gain access to new customers.
Talent acquisition: Acquiring a company can also provide access to new talent and expertise, which can help drive innovation and growth.
Synergies and cost savings: By merging with another company or acquiring a business, a company may be able to realize cost savings through synergies, such as shared resources or operational efficiencies.
Overall, inorganic growth can be an effective way for companies to quickly expand their business, gain a competitive advantage, and create long-term value for shareholders. But it does come with some risks.
While inorganic growth can provide many benefits to companies, there are also several risks that should be considered.
Integration challenges: Mergers and acquisitions can be complex and challenging to integrate, particularly when it comes to aligning cultures, systems, and processes.
Financial risks: Acquiring a company can be expensive, and there is always the risk that the expected financial benefits, such as cost savings and revenue growth, may not materialize as expected.
Dilution of focus: Pursuing inorganic growth opportunities can be a distraction from a company's core business, leading to a loss of focus and potentially eroding the company's competitive position.
Regulatory and legal risks: Mergers and acquisitions can be subject to regulatory and legal challenges, which can lead to delays, additional costs, or even the cancellation of the deal.
Reputation risks: Acquiring a company with a poor reputation or a history of ethical or legal issues can damage the acquiring company's reputation and brand.
For each M&A target, it’s important to ensure that they align with the company's strategic objectives and risk appetite. How? The due diligence process and careful integration planning can help mitigate many of the risks associated with M&A.
In 2022, Grata interviewed VPs and directors of corp dev teams who’s deal count per year varied from 1-10. We created snapshots of their tech stacks. This list does not include company-wide software like Slack or Microsoft Teams--we've focused specifically on M&A tools that help increase deal flow.
Sourcing Software
Pipeline Management Software
Corporate development teams use a variety of methods to find best targets for their inorganic growth goals. They will collaborate with teams internally and lean on experts outside of their company as well to find the right deals.
To build an effective proprietary deal flow, you need accurate and extensive private company data. Here at Grata, our mission revolves around giving dealmakers a competitive edge. Market-wide visibility is a few short clicks away.
Grata is a deal sourcing platform that helps you find, research, and engage with middle market companies built for innovative corp devs who want a competitive edge in finding previously undiscoverable companies.
Unlike company databases, Grata doesn’t just give you flat information. Grata is an intuitive, dynamic search engine powered by ML and NLP technology that provides the most comprehensive, up-to-date information you need to get deals done.
To learn how Grata can help you close more deals and increase your returns in half the time, request a demo today.
