Last visit was: 19 Nov 2025, 12:13 It is currently 19 Nov 2025, 12:13
Close
GMAT Club Daily Prep
Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
Close
Request Expert Reply
Confirm Cancel
User avatar
isa
User avatar
Current Student
Joined: 04 Dec 2007
Last visit: 21 Jan 2010
Posts: 1,687
Own Kudos:
224
 [4]
Given Kudos: 31
Concentration: Healthcare, Strategy, MC
Schools:Kellogg '11
Posts: 1,687
Kudos: 224
 [4]
1
Kudos
Add Kudos
3
Bookmarks
Bookmark this Post
User avatar
agold
Joined: 11 Mar 2008
Last visit: 01 Mar 2009
Posts: 1,578
Own Kudos:
300
 [3]
Location: Southern California
Concentration: Investment Banking
Schools:Chicago (dinged), Tuck (November), Columbia (RD)
Posts: 1,578
Kudos: 300
 [3]
2
Kudos
Add Kudos
1
Bookmarks
Bookmark this Post
User avatar
rhyme
User avatar
Major Poster
Joined: 05 Apr 2006
Last visit: 02 Dec 2024
Posts: 5,909
Own Kudos:
3,172
 [17]
Given Kudos: 7
Affiliations: HHonors Diamond, BGS Honor Society
Schools: Chicago (Booth) - Class of 2009
GMAT 1: 730 Q45 V45
WE:Business Development (Consumer Packaged Goods)
Schools: Chicago (Booth) - Class of 2009
GMAT 1: 730 Q45 V45
Posts: 5,909
Kudos: 3,172
 [17]
16
Kudos
Add Kudos
1
Bookmarks
Bookmark this Post
User avatar
jallenmorris
Joined: 30 Apr 2008
Last visit: 09 Oct 2014
Posts: 1,227
Own Kudos:
Given Kudos: 32
Location: Oklahoma City
Concentration: Life
Schools:Hard Knocks
Posts: 1,227
Kudos: 963
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Rhyme,

You never cease to amaze me. As a programmer too, I think this is one of the most creative posts I've ever seen!

Allen
rhyme
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.
User avatar
sam77sam7
User avatar
Current Student
Joined: 02 Jan 2008
Last visit: 06 Mar 2012
Posts: 597
Own Kudos:
Location: Detroit, MI
Concentration: Consulting
Posts: 597
Kudos: 30
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Rhyme,

Another classic, thanks for conveying the message in a creative medium...

So... how many calls did you make to land your gig? :wink:

~Sam
User avatar
riverripper
User avatar
Major Poster
Joined: 10 Apr 2007
Last visit: 20 Aug 2022
Posts: 4,306
Own Kudos:
Given Kudos: 5
Location: Back in Chicago, IL
Concentration: General/Operations Management
Schools:Kellogg Alum: Class of 2010
GMAT 1: 740 Q49 V42
Posts: 4,306
Kudos: 806
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Remember there is always dumb luck for a few people in any job search. However, I would say PE/VC/HF jobs arent the type people typically fall into...maybe a few at H/S do but at the other schools probably not so much.
avatar
cougarblue
Joined: 25 Jan 2008
Last visit: 03 Jun 2010
Posts: 165
Own Kudos:
13
 [3]
Location: San Francisco, CA
Schools:Wharton, Chicago
Posts: 165
Kudos: 13
 [3]
3
Kudos
Add Kudos
Bookmarks
Bookmark this Post
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.
User avatar
yellowjacket
User avatar
Current Student
Joined: 27 Mar 2008
Last visit: 24 Jan 2011
Posts: 358
Own Kudos:
Given Kudos: 1
Concentration: Finance, Entrepreneurship
Schools:Kellogg Class of 2011
Posts: 358
Kudos: 54
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Great post rhyme.

Pray->God(); // Warning call to null pointer? There is no god?

Hahaha.. how do you begin to come up with this stuff?

rhyme
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.
User avatar
isa
User avatar
Current Student
Joined: 04 Dec 2007
Last visit: 21 Jan 2010
Posts: 1,687
Own Kudos:
Given Kudos: 31
Concentration: Healthcare, Strategy, MC
Schools:Kellogg '11
Posts: 1,687
Kudos: 224
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Haha rhyme - that's great! :lol:

This brought to mind some other threads (think they were rhyme's) about the sequence of recruiting and how it works - waiting for PE/VC until the very end of the year must be ridiculously tough unless you're fairly certain that you'll land a position!

rhyme
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.
User avatar
isa
User avatar
Current Student
Joined: 04 Dec 2007
Last visit: 21 Jan 2010
Posts: 1,687
Own Kudos:
Given Kudos: 31
Concentration: Healthcare, Strategy, MC
Schools:Kellogg '11
Posts: 1,687
Kudos: 224
Kudos
Add Kudos
Bookmarks
Bookmark this Post
wow thanks cougar! The hierarchy is esp helpful - I didn't realize that there was even a perceived difference btwn previous experience in IB/PE and the firms themselves. It's also interesting to hear that those without previous PE or IB experience are at such a disadvantage when trying to break in. Is the reasoning (from the company perspective) really that they don't want to train newbies? Is the training that complex or costly?

It's also good to note that doing IB opens so many doors - it can really be a stepping stone for many careers!

cougarblue
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.
User avatar
agold
Joined: 11 Mar 2008
Last visit: 01 Mar 2009
Posts: 1,578
Own Kudos:
Location: Southern California
Concentration: Investment Banking
Schools:Chicago (dinged), Tuck (November), Columbia (RD)
Posts: 1,578
Kudos: 300
Kudos
Add Kudos
Bookmarks
Bookmark this Post
ac8706
wow thanks cougar! The hierarchy is esp helpful - I didn't realize that there was even a perceived difference btwn previous experience in IB/PE and the firms themselves. It's also interesting to hear that those without previous PE or IB experience are at such a disadvantage when trying to break in. Is the reasoning (from the company perspective) really that they don't want to train newbies? Is the training that complex or costly?

It's also good to note that doing IB opens so many doors - it can really be a stepping stone for many careers!

I'm not 100% sure on this, but my guess would be that their philosophy is "why train people if we don't have to?" Most of the large PE firms only hire a handful of new people every year, and smaller/medium size PE firms may only hire 1-2 people the whole year. With all of the people at the top of the "heirarchy" interested in PE, they can cherry pick whoever they please. Supply exceeds demand - and by a lot.
User avatar
jasonc
User avatar
Current Student
Joined: 18 Jun 2008
Last visit: 09 Sep 2011
Posts: 199
Own Kudos:
Given Kudos: 3
Posts: 199
Kudos: 79
Kudos
Add Kudos
Bookmarks
Bookmark this Post
I don't quite understand the appeal of PE/VC (well, I don't know much about them period), can someone explain?

Why is the demand so high?
User avatar
agold
Joined: 11 Mar 2008
Last visit: 01 Mar 2009
Posts: 1,578
Own Kudos:
Location: Southern California
Concentration: Investment Banking
Schools:Chicago (dinged), Tuck (November), Columbia (RD)
Posts: 1,578
Kudos: 300
Kudos
Add Kudos
Bookmarks
Bookmark this Post
jasonc
I don't quite understand the appeal of PE/VC (well, I don't know much about them period), can someone explain?

Why is the demand so high?

Interesting, fulfilling, and challenging work (for most) coupled with outsized compensation.
User avatar
isa
User avatar
Current Student
Joined: 04 Dec 2007
Last visit: 21 Jan 2010
Posts: 1,687
Own Kudos:
Given Kudos: 31
Concentration: Healthcare, Strategy, MC
Schools:Kellogg '11
Posts: 1,687
Kudos: 224
Kudos
Add Kudos
Bookmarks
Bookmark this Post
terp06
jasonc
I don't quite understand the appeal of PE/VC (well, I don't know much about them period), can someone explain?

Why is the demand so high?

Interesting, fulfilling, and challenging work (for most) coupled with outsized compensation.

Yup what terp said :)
User avatar
jasonc
User avatar
Current Student
Joined: 18 Jun 2008
Last visit: 09 Sep 2011
Posts: 199
Own Kudos:
Given Kudos: 3
Posts: 199
Kudos: 79
Kudos
Add Kudos
Bookmarks
Bookmark this Post
terp06
jasonc
I don't quite understand the appeal of PE/VC (well, I don't know much about them period), can someone explain?

Why is the demand so high?

Interesting, fulfilling, and challenging work (for most) coupled with outsized compensation.

challenging & outsized compensaton I can see

interesting & fulfilling... can you be more specific? :)
User avatar
agold
Joined: 11 Mar 2008
Last visit: 01 Mar 2009
Posts: 1,578
Own Kudos:
300
 [17]
Location: Southern California
Concentration: Investment Banking
Schools:Chicago (dinged), Tuck (November), Columbia (RD)
Posts: 1,578
Kudos: 300
 [17]
17
Kudos
Add Kudos
Bookmarks
Bookmark this Post
jasonc
terp06
jasonc
I don't quite understand the appeal of PE/VC (well, I don't know much about them period), can someone explain?

Why is the demand so high?

Interesting, fulfilling, and challenging work (for most) coupled with outsized compensation.

challenging & outsized compensaton I can see

interesting & fulfilling... can you be more specific? :)

The way I see it, being in venture capital or a growth-oriented private equity firm is like being a risk-free entrepeneur who runs 5 companies rather than 1. VC/PE firms will invest in an early to mid-stage company, and they will then take a seat or 2 or 3 on the board of directors of the company and they will advise the management team on best practices, growth, M&A, etc. They will leverage their firms contacts to help entrepeneurial companies build a more corporate-type infrastructure, get appropriate lawyers, get good management practices in place, etc. Their function can actually be described as somewhat similar to management consultants - except that they have their skin in the game and a (generally large) stake in the company.

Larger PE firms that do leveraged buyouts are generally focused on buying larger, established companies where they see an opportunity for either financial engineering or fundamental changes that would significantly increase the value of the company. People with top investment banking backgrounds generally thrive at these firms.

Junior-level people at these firms generally get paid attractive salaries and have a lot of exposure to entrepeneurial companies and ventures. They can leverage this experience to start their own entrepeneurial PE/VC backed venture in the future, or to work their way up to partner at the firm.

Partners at these firms generally get paid carried interest on the investments. Let's say that a PE firm raises a $1 billion fund. The typical fee structure is 2/20. Meaning that 2% of the $1 billion ($20 million) is a management fee that is generally used to pay base salaries and bonuses, office/support costs, etc. and 20% is the portion of the returns that the partners will split up between themselves. Assuming that they return 25% to their investors ($250 million), they would get to keep 20% of this (or $50 million) and divide this up between the partnership (at a fund of this size, most likely 4-5 partners). This is taxed at the capital gains rate (15%) rather then normal income tax rates (which is the cause of a lot of uproar on Capitol Hill currently, and I believe the capital gains rate is changing to 20%).

Not sure if that all made sense. I'm tired. I think a few others on this board have more knowledge about this than I do and they can and should feel free to chime in with their opinions.
User avatar
jasonc
User avatar
Current Student
Joined: 18 Jun 2008
Last visit: 09 Sep 2011
Posts: 199
Own Kudos:
Given Kudos: 3
Posts: 199
Kudos: 79
Kudos
Add Kudos
Bookmarks
Bookmark this Post
that helped alot +1 :)
User avatar
kryzak
User avatar
Major Poster
Joined: 04 Jun 2007
Last visit: 10 Aug 2013
Posts: 5,452
Own Kudos:
Given Kudos: 14
Status:Um... what do you want to know?
Location: SF, CA, USA
Concentration: Technology, Entrepreneurship, Digital Media &amp; Entertainment
Schools:UC Berkeley Haas School of Business MBA 2010
GPA: 3.9 - undergrad 3.6 - grad-EE
WE 1: Social Gaming
Posts: 5,452
Kudos: 744
Kudos
Add Kudos
Bookmarks
Bookmark this Post
good stuff terp06, you are wise beyond your years. :)
User avatar
sm332
User avatar
Current Student
Joined: 14 Apr 2008
Last visit: 26 Apr 2011
Posts: 449
Own Kudos:
Given Kudos: 16
Schools:F2010 - HBS (R1 - denied w/o interview ), INSEAD (R1 - admitted), Wharton (R1 - waitlisted &amp; ding), Ivey (R2 - admitted w/ 60% tuition)
GPA: 3.8
WE 1: 3.5yrs as a Strategy Consultant - Big 4
Products:
Posts: 449
Kudos: 39
Kudos
Add Kudos
Bookmarks
Bookmark this Post
thanks for the succinct exlpanation - terp06
User avatar
sam77sam7
User avatar
Current Student
Joined: 02 Jan 2008
Last visit: 06 Mar 2012
Posts: 597
Own Kudos:
Location: Detroit, MI
Concentration: Consulting
Posts: 597
Kudos: 30
Kudos
Add Kudos
Bookmarks
Bookmark this Post
Good explanation Terp.. thanks for the help!
 1   2   3   4   5