Leave MBB to to join PE-backed Portco?
Hi! I'm currently a consultant at an MBB and have been so since graduating undergrad a few years back.
I recently got an opportunity to join a PE-backed company supporting them with Biz-Ops/Finance, laid-out as a pathway to work with the PE-firm and grow the relationship, culminating in a senior-executive role at a future portco as I continue to grow.
I want to ultimately be an operator. Comp is relatively even today, but expect MBB comp to out-grow the offer over the next couple years.
Any adivce? Will I pigeon hole myself by leaving?
If you want to be an operator, PE-backed businesses could be a great way to transition. Is this a big company/PE firm? Is it LMM? That will change your experience significantly. Do remember that PE firms have a job to do, and they will push the Company hard to achieve them. You will be under scrutiny (whether directly by PE firm or by your boss).
I'd recommend a few things:
1. See if there are other people at other portco's of this PE firm who have made this transition from Big 4 / Consulting / IB. Talk to them.
2. Talk to the PE firm to get a sense of how they operate. Are they an Apollo-type or are they more partnership oriented.
3. Talk to many people at the company (both in and outside your function)
4. Talk to people who have left the Company and PE firm.
I can't comment on optionality after the move, but since you're relatively junior, you should still be very employable, just maybe not at the MBB title you think you deserve after a few years in "industry".
It's LMM ~$150MM in annual revenue ~$30MM EBITDA. Does that change your perspective one way or the other? Not like Apollo, more like a partnership
Think it’s definitely a little small considering you’re coming from MBB. Obviously depends on more than size but just 2 cents.
I'm biased since that's the size of business I work with, but it seems like a good spot. Big enough for the ability to withstand a downturn but presumably not a huge bench of employees / execs so it can still feel like a smaller business, which likely results in an interesting learning experience for you.
Can you expand on number two? How do those two types differ?
Will the PE firm do anything to boost IRR by 1%? If so, that might mean some tough cost cutting or very short term thinking. If they work with smaller businesses, particularly family-owned / founder-led, they may have a more partnership model, which could mean a more productive relationship with the sponsor. These are just generalizations, of course.
Not sure if you're getting equity but the sponsor-attitude can impact this significantly. If you leave, the docs will likely say they can buy you back at FMV. That could be a big hit. At my firm, unless it was something serious (outside of being fired for cause), we typically let people keep their vested equity, which can still be a few hundred K for your non CEO/CFO folks.
I'd also keep an eye towards the actual nature of the role. Will you be in a biz ops/strategy capacity (often the first area to get cut in a cost savings initiative) or more concrete operations where you're learning a departmental craft (sales, professional service, customer success, etc.)? What does the career track look like for this role (i.e., does this put you on a path to P&L ownership / traditional c-suite (if desired) or moreso individual contributor strategy path? Pros and cons to all of these as you think about longer-term career and future roles.
Would make sure you're in the cap table and executive level on EA to compensate for the risk - hate to join and get laid off and regret leaving a great brand.
Protect yourself peeps!
Would strongly advise against
portcos are mostly shitholes and a place for an experienced operator ; not a place for learning and growth
stay with MBB as long as you can. No reason to leave any time before partner unless a) someone is going to make you a VP+ or b) you are going to the investing team at a PE firm
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