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Why Private Equity is BAD for Career Goals

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Why Private Equity is BAD for Career Goals [#permalink] New post 11 Jul 2011, 08:28
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Okay folks, we have had some requests that we talk about Private Equity and Venture Capital. But as always, Im gonna try to keep eeeeveryone on their toes.

Lots of clients last year (and a few this year) are VERY excited about Private Equity (PE) and Venture Capital (VC). It is their short term goal, their long term goal…and everything in between. Well I am here to tell you that often times, this is a BAD idea. Lets avoid PE and VC. Why? I’ll tell ya.

Top Three Reasons why PE/VC is a bad idea for your MBA goals

1) It is impossible to get a PE job. There are fewer and fewer of em out there, and if you’re counting on a job in PE after your MBA, schools will worry. Why? Because they are judged (in fact they judge one another) on their JOB statistics. If you say you’re gonna get a job (that they don’t think you can get) they wont let you into their MBA program. You will present a risk, and risks from the adcom’s perspective, are bad.

2) Everyone’s doing it. So many people are making this mistake folks—1 out of every 4 essays I read talks about PE. So…why follow this trend? Not only is it hard to sell (see #1 above) but even if you DO sell it, you are now in a VERY competitive pool! Even among the guys who CAN get a job in PE, now you have to prove…that you’re better than THOSE dudes are? That’s hard man. Instead, what about general management, banking, trading…SOMETHING to make yourself stand out perhaps…

3) Do you have the background for it…really? Most people do not. Sure you have traded stocks and bonds. Perhaps you have even done a start-up, or raised money for some companies on the side. But…those things are NOT PE. And you wont get credit for em, no matter how hard you try, on the PE front. If you don’t have the PE background, you are fighting an uphill battle—perhaps impossibly so.

Hope this helps gang, and good luck!
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Re: Why Private Equity is BAD for Career Goals [#permalink] New post 09 Jun 2014, 01:55
JonAdmissionado wrote:

Lots of clients last year (and a few this year) are VERY excited about Private Equity (PE) and Venture Capital (VC). It is their short term goal, their long term goal…and everything in between. Well I am here to tell you that often times, this is a BAD idea. Lets avoid PE and VC.


Hi Jon, thanks for the above post, I stumbled upon it almost by accident.

I'm an Indian male working as an investment analyst in a boutique private equity fund (AUM <$500 mn) in southern India. I'm a Chartered Accountant and was extremely focused on working in this field since I was studying for CA, and got this job by months and months of grueling networking.

My question is, is the small AUM going to nullify the fact that I'm working in a bonafide PE fund and have good transaction experience?

Target schools: Fuqua, Ross, Darden, Johnson.
Post-MBA goal: Associate in a global PE fund, subsequently set up a fund in India.
Total work-ex: 2 years

Thanks a lot!
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Re: Why Private Equity is BAD for Career Goals [#permalink] New post 10 Jun 2014, 00:22
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usernamed wrote:
JonAdmissionado wrote:

Lots of clients last year (and a few this year) are VERY excited about Private Equity (PE) and Venture Capital (VC). It is their short term goal, their long term goal…and everything in between. Well I am here to tell you that often times, this is a BAD idea. Lets avoid PE and VC.


Hi Jon, thanks for the above post, I stumbled upon it almost by accident.

I'm an Indian male working as an investment analyst in a boutique private equity fund (AUM <$500 mn) in southern India. I'm a Chartered Accountant and was extremely focused on working in this field since I was studying for CA, and got this job by months and months of grueling networking.

My question is, is the small AUM going to nullify the fact that I'm working in a bonafide PE fund and have good transaction experience?

Target schools: Fuqua, Ross, Darden, Johnson.
Post-MBA goal: Associate in a global PE fund, subsequently set up a fund in India.
Total work-ex: 2 years

Thanks a lot!


Good question. And I'm glad you dug up this old post, because as I was reading it, I was like "My god.. that is soooo true."

Now in your case since you DO work in a bonafide PE house, then sure, go for PE goals. I mean you have the experience, the career history. It all makes sense for you. You want to learn more and move to better positions/firms within your industry. It's just when I read the software programmer and biology student's irrelevant goals to go in to PE (read "my goal is to make loads of cash") that I start to roll my eyes.

In your case though, I'd watch out about one thing, your long term goals of setting up a fund in India. I think just about every single PE guy thinks he is gonna set up his own fund and be a billionaire. But it just doesn't happen. Instead "keep it real", like how about just moving up in a big PE firm. It's nice, it's traditional, it's believable, it's a fantastic job. And once you get into Bschool, do whatever you like :).

Oh yeah, and one last thing - don't apply till at least one more year. Then you'll have enough experience.

Good luck on all!
Best,
JF
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Re: Why Private Equity is BAD for Career Goals [#permalink] New post 12 Jun 2014, 07:47
JonAdmissionado wrote:
Good question. And I'm glad you dug up this old post, because as I was reading it, I was like "My god.. that is soooo true."

Now in your case since you DO work in a bonafide PE house, then sure, go for PE goals. I mean you have the experience, the career history. It all makes sense for you. You want to learn more and move to better positions/firms within your industry. It's just when I read the software programmer and biology student's irrelevant goals to go in to PE (read "my goal is to make loads of cash") that I start to roll my eyes.

In your case though, I'd watch out about one thing, your long term goals of setting up a fund in India. I think just about every single PE guy thinks he is gonna set up his own fund and be a billionaire. But it just doesn't happen. Instead "keep it real", like how about just moving up in a big PE firm. It's nice, it's traditional, it's believable, it's a fantastic job. And once you get into Bschool, do whatever you like :).

Oh yeah, and one last thing - don't apply till at least one more year. Then you'll have enough experience.

Good luck on all!
Best,
JF


Thanks a lot for your response! I'll definitely keep your advice in mind.
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Re: Why Private Equity is BAD for Career Goals [#permalink] New post 15 Jun 2014, 22:58
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You got it dude!
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Jon Frank
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