Biggest Challenges Faced by a Head of Business Development at Compass Diversified
Katharine's biggest challenge as Managing Director/Head of Business Development at Compass Diversified is the inherent uncertainty in private equity; "the companies are not always available for sale," leading to significant effort invested in deals that ultimately fail to materialize, requiring resilience and a robust deal funnel to maintain momentum. This necessitates the ability to "pick your head up and say, okay, let me go out there and get the next one."
Private Equity, Dealmaking, Business Development, Resilience, Investment Strategy
Advizer Information
Name
Job Title
Company
Undergrad
Grad Programs
Majors
Industries
Job Functions
Traits
Katharine (Katie) Melzer
Managing Director/Head of Business Development
Compass Diversified
University of Michigan
UCLA Anderson School of Management - MBA
Business Management & Admin
Finance (Banking, Fintech, Investing)
Business Strategy
None Applicable
Video Highlights
1. The challenge of securing deals in private equity: Katharine highlights the difficulty of finding suitable companies for acquisition, facing competition, and the emotional toll of deals falling through despite significant effort. This speaks to the competitiveness and resilience needed in this field.
2. Building a robust deal pipeline: Katharine emphasizes the importance of consistently sourcing and developing new opportunities. This is a key skill in business development, showing the need for perseverance and the ability to manage multiple prospects simultaneously.
3. Managing setbacks and maintaining momentum: The interview reveals the frequent rejection and need for perseverance in the face of unsuccessful deals. This demonstrates the importance of emotional intelligence, adaptability, and strategic planning in overcoming obstacles and maintaining progress toward goals.
Transcript
What is your biggest challenge in your current role?
One of the tricky things about being in private equity and deploying capital is that companies aren't always available for sale. Sometimes we aren't the highest bidder in an auction, and we don't win the deal. My role involves finding new deals and building relationships, so it always feels good to get a deal over the finish line and put capital to work.
However, that's not always the case. Perhaps the timing is off, the valuation is too high, or we're not the best buyer for a particular asset. You might put a lot of work into chasing the company and its team, doing diligence to ensure it's the right investment, and get really excited about the opportunity. Then, for whatever reason, the deal doesn't go through.
That can be tough. You have to pick your head up and say, "Okay, let me go find the next one." This happens often, so you need the stamina not to let it deter you. You have to get back out there and keep looking for deals, building a funnel so that if one deal doesn't close, you have another ready.
You can't get too attached to any one deal because, for many reasons, both controllable and uncontrollable, a deal isn't always going to work out. That can be disappointing. Being able to continue working, get up, and keep doing your job to find the next deal takes energy.