David Keys has headed healthcare investment banking teams, co-founded a tech-enabled healthcare services company, and served as the chief development officer for a publicly traded behavioral healthcare company. He is passionate about mentorship and development of others. His prior co-workers have described David as intellectually curious, passionate about capital markets, and someone not afraid to bear hug a deal to get the desired result for a client. We sat down with David to learn from his breadth and depth of experience in mergers and acquisitions
(M&A).

Deal Guide: What did you learn in your time in corporate development that you wish you knew or better emphasized when you were an investment banker?

David: As an investment banker, we would often discuss the importance of a “deal champion” when approaching a strategic buyer. I think we often underestimated how much time and energy the “deal champion” needs to sell an opportunity internally. Whether it is simply navigating the internal approval process or convincing different functional operational areas to add another project to their desk, it takes time and may not be a process that aligns well with a traditional “auction” process. 

Deal Guide: When you were a VP in investment banking, you stepped off the investment banking path to co-found a healthcare services business. What skills were most valuable in the entrepreneur’s seat?

David: Investment banking provides a broad set of tools that translate well to entrepreneurship— the functional, such as understanding unit economics and building a financial model to reflect the operations, to specific, such as comfort with deal documentation and contracts. In some ways, those are skills you expect to develop, because you are using them so frequently. However, there is another group of skills that you don’t always realize you are developing as part of process-oriented sell side M&A. These were among the most valuable to me. Some might consider them “softer skills”: time management, organization, follow-through with counterparties, and, critically, communication. With the “follow-through” and “communication”, I would include that it is critical to remember to foster excitement among the team. Whether you are trying to get a team excited for another pitch in banking or another project in a company, fostering team enthusiasm is incredibly important—communicating and following up with updates and feedback just fosters a team mentality.  

Deal Guide: You eventually chose to go back to the transaction world. How did that influence you as a transaction advisor?

David: My decision was highly specific to something I saw while trying to acquire small businesses, which was a lack of lower middle market advisors providing the same preparation and process focus that boutiques in the middle market were offering. It seemed like there was a market demand, and the sellers would benefit from the advice and the buyers felt the probability of closing a transaction increased with an active advisor involved. I think this has changed. There are far more boutiques advising lower middle market companies today, and the overall level of professionalism has increased significantly. 

Deal Guide: Your career has spanned three decades in an industry known for long hours and tight deadlines. What has kept you engaged over time?

David: Other than a lot of coffee? Probably two things: curiosity—I continue to be fascinated with companies and the people who start and operate them. There are so many dynamics at play— personalities, judgment, focus, intelligence. While I have developed frameworks for evaluating opportunities over the years, they aren’t set in stone, and I continue to learn almost daily. Two operators in the same field may have multiple ways of addressing a given challenge. Discussing their approaches and why they choose one way over another continues to fascinate me. The second is a deep drive to completing projects. I don’t know what it says about me, but I love a sense of completion—fixing a problem, achieving a goal, formulating a thesis, and then executing on it. I guess I generally think of life as one big game and project-based work enables you to play many rounds over the course of a career. That doesn’t mean I don’t take each project seriously, it just means I take deep pleasure in successfully completing a project. 

Deal Guide: What did you experience as a VP or director that you felt like you were oblivious to as an associate or analyst? Having that eye-opening experience, how would you have changed how you approached your job as a junior deal professional?

David: I think the VP’s role may be the most stressful, as you seek to advance in banking. You are continuing to mentor the associate and analyst and helping to develop them and supporting their work by providing guidance and oversight, while simultaneously trying to invest in external relationships that enable you to generate future clients. The VP is trying to solidify their domain expertise if they are in an industry vertical, so that they can offer substantive advice to current clients and prospects. I think as an analyst or associate, it may not be obvious that this is occurring on top of the core functions of the role that are necessary for deal execution. It is never too early to start developing domain expertise or build relationships. Analysts and associates can begin to store knowledge and interact with counterparties in much easier ways today. For example, following up with a peer at a PE firm with an article relevant to a deal you looked at with them—build the relationship before you are seeking assignments.

Deal Guide: The folks who get promoted faster, what are the one to three commonalities among them?

David: I suppose it depends on what level you seek. If it is analyst to associate or associate to VP, it is a function of proving competency with the core skills. Once you are a VP seeking director or managing director roles is about generating new clients and revenue. As mentioned previously, that is about (i) domain expertise—are you someone a prospective client will turn to for advice,  (ii) communicating—do you convey advice thoughtfully and in an actionable manner, and (iii) commitment—do you see things through to the end? A pretty face that speaks well to bullet points might be okay for a short burst, but clients remember, respect, and serve as a reference for those situations that were complex and where the advisor saw it through. 

Deal Guide: A common theme talking to senior associates and new VPs is how to gain greater knowledge of the purchase agreement. How did you learn the ins and outs of the purchase agreement in your career?

David: I mentioned I was curious and I found our clients’ legal teams appreciated it when I followed up with questions of them to make sure I understood specific dynamics. I found that holds true for many third-party advisors. For example, many underwriters of reps & warranty insurance are more than happy to have deep conversations on strategies to mitigate risk and how that can be incorporated into the reps & warranties in the contracts. I would say that my approach was always mutual. I have had associate attorneys respond with an “ah ha” moment when I explain why we were seeking specific indemnity on an issue that had the potential to create a future cost to a company, for example, one that might impact future working capital needs, which means it is a concept that carries through multiple parts of a contract—reps, indemnification, working capital definitions, and post-closing adjustments. 

Deal Guide: What did you wish you knew earlier in your career?

David: I wish I had understood that one’s career is a function of the competence you achieve and the relationships you build. I find joy in an “out of the blue” email from a former colleague that thanks me for the time we spent working on a tough concept. I am proud when I see someone who I helped mentor become a member of a C-suite of a company or when I see someone take the plunge into starting a business. I am fortunate to have learned this along the way, but I wish I had understood it earlier.