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Re: Switching into PE/VC? [#permalink]
I'm not really too interested in pursuing PE/VC after my MBA, but I was just wondering what kind of salary a first year analyst would make. Is there a big difference between PE and VC? It seems like a lot of people at HSW come from PE/VC backgrounds. What is a pre-MBA comp level for them?
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Re: Switching into PE/VC? [#permalink]
RoyHalladay wrote:
I'm not really too interested in pursuing PE/VC after my MBA, but I was just wondering what kind of salary a first year analyst would make. Is there a big difference between PE and VC? It seems like a lot of people at HSW come from PE/VC backgrounds. What is a pre-MBA comp level for them?


I think the range is probably like 200-400k for PE, depending on how many years they've been working before business school. I want to say that many 1st year pre-mba PE associates (so call it 2 or 3 years experience in IB) were pulling 250k at the megafunds.
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Re: Switching into PE/VC? [#permalink]
In my exploration of the 'breaking into PE/VC' this seems to be the consensus, which is quite unfortunate for someone like me.

2 questions given my background of non-target undergrad & 2 years at Corp Fin Leadership Program.

1. If PE/VC is my goal would you
A) attempt to get into IB/Corp Dev before going to B-school? (serious likelihood that to accomplish this I would take a step down from F500 to small/middle market and in doing so hurt my b-school chances)
B) use my current position to get into a good b-school (M7, prob not HSW) and hope for luck?

2. Given the risky timeline, have you every heard of anyone renegging on an internship/job offer from say Corp Dev to take a PE job they got down the road?


cougarblue wrote:
That was a funny post, Rhyme, I wonder if it was funnier if you have a background in programming languages.

I think there needs to be a distinction made between PE and VC. While in actuality VC is a subset of PE, the term PE nowadays almost always refers to LBO PE firms. PE hiring is becoming a little more institutionalized than VC ever will be, but it still is quite unlike IB/MC or other traditional career paths.

For VC I think the “network” angle is as important as rhyme says it is, I really don’t know. However, for LBO PE it’s a combination of that plus your previous experience and pedigree that will get you interviews, usually via recruiters. To get jobs in LBO PE you are competing with those who have pre-MBA work experience doing (in order of general competitiveness, according to me):

1) BB IB / Top MC + Mid-Large Cap PE
2) Mid-Large Cap PE
3) BB IB / Top MC
4) Small no name PE / MM IB
5) Small no name IB / Non-Top MC / Big 4 Transaction or Due Diligence
6) Industry / Corp Development / Big 4 Other
7) All other career switchers

Keep in mind that almost all of these people will also have good academic pedigree including: a respected undergrad (high GPA), test scores (SAT + GMAT), and a top MBA. It is possible that pedigree, e.g. HBS MBA, could help you jump a level relative to the above ordering, but the problem is that pedigree is already there in almost all of those groups. The good news is that the smaller and less established the PE firm, the less this ordering applies (not because they would rather take someone from #6 and #7 over #1 and #2, but because there aren’t so many of #1 and #2 to go around.)

While there might seem to be a good amount of PE shops, they are staffed very lean and definitely don’t want to train their junior professionals. In my limited experience, I’ve heard a lot of guys that are in #5 or below and not going to a H/S/W say that they want to do PE and I have to refrain from telling them that they are pretty unlikely to get a job in PE, because I don’t want to be “that guy”. But the reality is that it’s very, very tough. However, networking can be the great equalizer. I would encourage all those from #5 and below to give considerable thought to doing IB first before putting their eggs in the PE basket.
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Re: Switching into PE/VC? [#permalink]
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There was a really good section on Enterpreneurship in the May issue of the HBR and included 2 long articles on VC and one interview:
1. 6 Myths about Venture Capitalists
2. How to Negotiate with VC's
3. Interview with Marc Andreessen

Recommended.

Originally posted by bb on 08 Jun 2013, 10:17.
Last edited by bb on 08 Jun 2013, 22:33, edited 1 time in total.
Added HBR reference
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Re: Switching into PE/VC? [#permalink]
Anyone from the users above who had questions & concerns managed to end up in either PE or VC?
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Switching into PE/VC? [#permalink]
lala10 wrote:
RoyHalladay wrote:
I'm not really too interested in pursuing PE/VC after my MBA, but I was just wondering what kind of salary a first year analyst would make. Is there a big difference between PE and VC? It seems like a lot of people at HSW come from PE/VC backgrounds. What is a pre-MBA comp level for them?


I think the range is probably like 200-400k for PE, depending on how many years they've been working before business school. I want to say that many 1st year pre-mba PE associates (so call it 2 or 3 years experience in IB) were pulling 250k at the megafunds.



There's some more data available at https://www.transparentmba.com - it's user reported salary and total comp information (as well as non-monetary statistics like hours worked, satisfaction, travel %) - we have some PE and VC data points.

Good luck!
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Re: Switching into PE/VC? [#permalink]
rhyme wrote:
PE/VC recruiting is basically this:

If "You were in PE/VC before an MBA"=TRUE {
solid=like a rock;
else
solid=like water;
}

If solid=like a rock {
Then
You have a Network = TRUE;
Else {
You have a Network = FALSE;
}

If You have a Network = TRUE {
Then
PE/VC Job Probability Function = .0009;
Else
PE/VC Job Probability Function = 1x10^-42;
}

Recruiting_Begins();

If solid=YOU SUCK {
while (calls<10,000) {
Network_Like_Mad(Every Day, All The Time);
Foreach(Call(EveryoneInTheWorld())="ACTUAL CONVERSATION")) { calls++; }
}
Pray->God(); // Warning call to null pointer? There is no god?
Backup_Job_Plan->Trash(NOW());
Watch_Everyone_Else_GET(IB);
Watch_Everyone_Else_GET(MC);
Watch_Everyone_Else_GET(GM);
if (male = true) {
Make_Of_Steel(Balls);
else {
Dig_In(Heels);
}
Job_Offer=PE/VC Job Probability Function*calls
}


In short, landing a PE/VC gig is 98% who you know. It's ALL networking.

The biggest issue frankly is that you have to be 120% commited. PE/VC recruit in spring - after IB, after MC, after GM, marketing, hedge funds, commercial finance, leadership programs, after basically everything. To do PE you have to roll the dice - and roll with a big bet. Its not for the risk averse.


Haha! Well put Rhyme! :)
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Re: Switching into PE/VC? [#permalink]
Hey all, I wanted to share Garrett's story (Wharton MBA '13) of breaking into VC:

https://touchmba.com/mba-careers-venture-capital/

Networking and offering massive value in each interaction seems the way to go...
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Re: Switching into PE/VC? [#permalink]
For those without pre-MBA PE experience, I have seen many break in to solid PE houses via serendipity - usually impressing key professors, current/former employees (who might be fellow students), specialized industry/academic knowledge, geographic acumen (e.g., Asia), and internships before and during b-school. Can be worth a shot for those really interested!
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Switching into PE/VC? [#permalink]
Early stage VCs look for product/product marketing/prod mgmt backgrounds when they hire associates & principals (not aware of a role in between!). Helpful if your product work is in an focus area for new investment. Plex Kodi Lucky Patcher I do think tech PE is different because you need a pretty strong financial background, lots of financial modeling etc. On the other hand, the finance part of early stage VC is pretty simple.
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Re: Switching into PE/VC? [#permalink]
I worked in PE so I'll chime in on that piece:

PE is an extremely competitive industry and these days if you don't have pre-MBA PE experience (as an associate), it's extremely hard for you to get a post-MBA role.

The reason is simply because most PE firms don't need that many investment professionals. The people who are in the post-MBA roles are considered lifers (meaning they plan on staying in PT long term). The partners at the top have super cushy jobs (no crazy hours like ibankers, and way higher pay), so most of them are not going anywhere. If the people at the top of the pyramid aren't leaving, that means there's fewer and fewer spots the higher up you move.

Since they can be so selective with their hires, they have no reason to hire someone who hasn't done private equity before business school. In fact, the people who did PE before business school noly went back to business school because their PE firm required them to do so before they would even consider promoting them to a post-MBA role.

So long story short, if you want to go into PE, your best bet is to do PE before business school. And to do that, you most likely should start out as an investment banking analyst right out of undergrad. Being a management consultant after undergrad is OK too, especially if you're at Mckinsey/BCG/Bain but it's still harder than going straight from banking. Also if you're making the switch from MC to PE, the easier time to do it is as a pre-MBA PE associate, not post-MBA. Just my 2 cents.
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Re: Switching into PE/VC? [#permalink]
pgs wrote:
I worked in PE so I'll chime in on that piece:

PE is an extremely competitive industry and these days if you don't have pre-MBA PE experience (as an associate), it's extremely hard for you to get a post-MBA role.

The reason is simply because most PE firms don't need that many investment professionals. The people who are in the post-MBA roles are considered lifers (meaning they plan on staying in PT long term). The partners at the top have super cushy jobs (no crazy hours like ibankers, and way higher pay), so most of them are not going anywhere. If the people at the top of the pyramid aren't leaving, that means there's fewer and fewer spots the higher up you move.

Since they can be so selective with their hires, they have no reason to hire someone who hasn't done private equity before business school. In fact, the people who did PE before business school noly went back to business school because their PE firm required them to do so before they would even consider promoting them to a post-MBA role.

So long story short, if you want to go into PE, your best bet is to do PE before business school. And to do that, you most likely should start out as an investment banking analyst right out of undergrad. Being a management consultant after undergrad is OK too, especially if you're at Mckinsey/BCG/Bain but it's still harder than going straight from banking. Also if you're making the switch from MC to PE, the easier time to do it is as a pre-MBA PE associate, not post-MBA. Just my 2 cents.


I am keen to participate in a Pre-MBA PE/VC or IB internship. However, I only have middle office banking experience. In this case, what are my chances to be able to take on such an internship If I were to have a upcoming MBA slot in a top business school? Has anyone here successfully landed an internship without any PE or IB experience?
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Re: Switching into PE/VC? [#permalink]
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