Venture Capital / Private Equity Goals

Question

As an IT person with an Engineering background (but no finance background), I would like to enter the venture capital industry eventually with a focus on investing in high-tech startups. I understand that schools keep in mind how realistic your career goals are when you apply, and that VC is one of the hardest fields to break into.

Any advice on how I should approach my essays? Should I focus on writing a realistic career goal such as MC and mention that my long term is to goto VC (also a stretch), or should I play it safe and leave out my VC aspirations altogether, especially since I do not come from an IB background. The dillema here is that it is easier to write about what I really want to do, but it is such a big stretch that I don't want to sound unrealistic....

FYI my target is Columbia FT Fall 2009, which has a strong PE/VC club

Thanks!

riverripper · Answer

I would not write about wanting to go into VC/PE. Honestly no matter how great you present it, it wont look very realistic without a solid background in some financial field. Find the most logical post MBA careeer path for someone in your field and develop that story.

agold · Answer

I spoke to a Wharton Adcom recently at an event. She mentioned that they were flooded with applicants from all sorts of backgrounds last year who wrote that their goal was to go into private equity/venture capital. If they did not come from a PE/VC, Investment Banking, or Entrepeneurship background, they apparently dinged a large majority of them. She claimed it simply wasn't realistic for 90% of the entering class and it just showed that the person was looking to go with whatever the trend of the day was, rather than digging down deep to figure out what they really want to do.

Even if these are your long-term aspirations, as they are mine, please don't write about it in your essays unless you have some serious meat/background to back it up.

Even if these are your long-term aspirations, as they are mine, please don't write about it in your essays unless you have some serious meat/background to back it up.

riverripper · Answer

Terp makes a good point...unless you already work in PE/VC or IB at the very least it will most likely come across that you were chasing the money and trends with no real idea what a career is like. This may seem harsh but its probably true of many of the applicants...even the people who think they know what these jobs are like probably are clueless.

jb32 · Answer

Yeah, I have a corporate development background (buy-side) and I decided it was even unrealistic to think I could move to PE long-term. Although I could talk alot about my experience evaluating companies on whether they make good acquisition candidates, I thought it still might be a stretch without a major IB or MC firm on my resume. I would probably go with technology banking or something like that as my career goals. Maybe MC for tech companies eventually hoping to make partner at McKinsey or BCG.

fooFighter · Answer

If you want to shift into VC/PE after mba, your best bet would be to have a middle term goal of IB, and then use that to shift. Doing CFA might help too.

riverripper · Answer

I can tell you one of the things we all seem to have a good laugh at here is what our real career goals are vs what we wrote about. I dont know many people that are planning a big career change that wrote about that. If you worked in consulting you were going back, if you were in IT they want to do tech consulting, if they were in some finance thing they said they wanted something related to that. We kind of joked that the school must know but they just want to see how convincing you can be.

solaris1 · Answer

As opposed to every other school in the top 10?

Make sure your essays about "why our school" are more compelling than that. There's a fine line between being unrealistic and being ambitious, and ambition is something you certainly need to showcase in your essays.

kryzak · Answer

I just wrote about working at a high-tech startup and left out the VC part. You can always do the VC part once you're in school.

Also, from what I've learned of VC (at least entry level MBA jobs) so far, the skillset required is not the same as PE (where financial background is a must). Many of the VC focused people at Haas already told me that if I wanted to do VC in high-tech startups, my engineering background is more useful. One guy who did PE before B-school and is now breaking into VC even said he wished he had the engineering background (he wants to get into VC in high-tech) and that his PE background doesn't really help him as much in VC.

So in short, I probably wouldn't write about wanting to do VC because the career change is too big and so few people get into VC.

PalmettoRU · Answer

Thanks for the great advice everyone. Kryzak thanks for the clarification between VC and PE -- I was interested in VC as an engineering undergrad before what I knew PE and IB stood for! As far as shaping career goals go -- I am shooting for writing about a MC position post-MBA, hoping to leverage my IT/industry experience in big pharma -- does that sound like unique enough of a story (with additional details, of course) to differentiate myself from the rest of the MC applicants (most of whom do not seem to be concentrating in healthcare).

Would it make sense to go as far as to concentrate in the healthcare/pharma track in B-school if my goal is to start out in consulting leveraging what I know, or should I just go out on a limb and say I want to focus on finance or something?

I am pretty confidant MC is what I want to do but am concerned about differentiating my profile to adcom! Thanks!

kryzak · Answer

I wouldn't worry so much about differentiating your career goals from others. Just make sure your career path to MC after MBA makes sense, is logical, and flows with your past experiences. Whether you choose pharma or something else will depend on how well you can back up that "believability" factor.

Differentiate yourself using your past experiences, and focus on telling a good story that will lead to your stated goals.

mb1312 · Answer

Topic: Venture Capital (VC) Financing...I know this may be a random question but you never know... does anyone know whether during a financing where a VC is investing 10 million for shares of series A preferred stock that can be converted to Common stock on an as converted basis. $1.00 price /share which is based on $20 million dollar pre money valuation and a total of $20 million fully diluted pre-money share outstanding. Question: In the amended and restated certificate of incorporation can you have the authorization for lets say 20 million shares of preferred stock (which could potentially mean other rounds of financing such as b and c), or will the VC only want the 10million shares authorized?

Also, can you add more authorized common stock as a buffer zone for potential future financings of different series of stock so they will be able to convert if they so decide? so you have 20 million Common stock before the 10million coverted. So total you would need authorized 30 million CS. Would a Venture Capital firm be upset if the Company authorized 50 million in their certificate instead of the 30 million required of common stock?

3underscore · Answer

It is a few years since I did this. Can you try and write it out clearer? Maybe it is just that I am tired.

TonyCheckley · Answer

I'd agree for those with more technical backgrounds rather than conventional finance backgrounds VC is the way to go

mjt · Answer

Is it then unrealistic to think about moving to PE without IB or MC experience (for someone with engineering background and MBA)?

MBAbot · Answer

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Venture Capital / Private Equity Goals

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