I imagine many folks here have had to weigh decision on whether to go get an MBA to stay on through their firm. I recently got promoted to a post-MBA role (think VP/Principal) at my growth equity firm, but I also got into HBS + Wharton and am leaning against not going.
Background
- VC/Growth Fund Investing in Tech: great LPs, yet little to no brand name recognition
- Portfolio doing ok so far but with a wide variability of outcomes. Could be a 5x, could be a 2x or lower
Reasons for Decision
- I spoke to quite a few MBA grads/investors in my position (not trying to career pivot, did not truly need the MBA) and almost all said the MBA was a great personal experience but largely a wash in terms of their career
-Value of MBA in PE/VC seems to be declining
- Significant opportunity cost with carry increases and comp
- I am generally happy with what I do and if things didn't work out with our next fund, I feel like I would have the network or experience to figure things out?
- More broadly, feel like value of MBA is in decline, especially within tech
I have explained this to several friends who are in consulting/corporate strategy jobs and they look at me like I'm crazy for turning down the MBA, so I thought I would open up and see what others think. Am I crazy for not going to HBS?
don't do the MBA - you're losing money especially if we hit a recession and hiring goes down
Not crazy at all. Most analysts/associates that I know think that MBA programs are just branding plays for those who don't have an established brand on the CV. Which I'm inclined to agree with.
Also, I think you're at a level where you don't need one. A few years of solid performance and you'll probably make partner.
If your getting what you would with if you had an MBA without one, you shouldn’t your spot on with having the network to figure it out. Just stay in your current role and kill unless something better comes.
Hey, this might be annoying but would you mind outlining your profile/background in terms of MBA admissions (GPA/gmat/work experience)?
Those are awesome acceptances so congrats!
(I'm most certainly not qualified to give advice)
Going will help you in the long term if you don't end up in PE/growth forever. Depends on how much confidence you have in yourself at the current fund
Where’d you do your undergrad? If it was an Ivy or equivalent, definitely skip the MBA.
What if it's a state flagship non-target? Any difference?
I mean...if he feels like he needs it from a branding perspective for some reason then sure. The reason I said skip it if you went to an ivy is because there's literally no upside if you want to return to your previous industry / job and don't need it for branding.
OP already has the job everyone tries to get out of MBA. Why leave?
Tier 2 Private - Think Northwestern/Rice/Uchicago/Duke
I would def pass on the MBA if it were me. You're already in a spot everyone wishes they were in.
If you want to stay in the industry, and have an opportunity to do so, then I see no reason to get an MBA.
I would have gotten an MBA and gone directly back to doing what I was doing before, seems like a waste.
Is it possible to defer admission for two years at the MBA? Then can reevaluate.
In a similar boat to you. Are you able to return to your fund in that post-MBA role if you do choose to go that route? If so, then I think there are some pros to an MBA / other considerations that make the decision less clear cut:
1) Brand: HBS is an immediate stamp of approval. This might be less and less true, but I think it's still somewhat applicable both in PE, but also the corporate + startup world. Maybe viewed less as a requirement, but I can tell you that I've been in a ton of meetings with our partners (who both went to HBS) and founders of prospective investment opportunities (and we're in the LMM, so young founders too) and the fact that they've gone to HBS is maybe irrelevant, but more often than nothelpful in that some mutual connection is brought up or the founders also were alum.
2) Network: Obviously you'd get a great network from a top-tier MBA. It's not to say that you couldn't achieve a fantastic network without going to an MBA, as you could hustle hard in the 2 years where you would've otherwise been in school to forge real industry connections. However, the immediate network you'd get from an MBA (and the opportunity to connect in the future with ease to any prior / future class alum) is a definite benefit to consider.
3) Downside Protection: In the event that you aren't at your fund forever, or you want to change industries / careers, an MBA could be helpful in helping you make that transition. I knew a good friend who was at a fund that had wound down really suddenly even after being active players for decades - you never know what might happen whether it's a personal circumstance or external one. Everyone landed on their feet from what I know, but the VPs with top MBAs apparently had a much easier time making a quick job transition (including a couple who had no MBA but graduated from HPY or Wharton undergrad so take that as you will). Maybe it's because of #1, or #2, or both, or perhaps just purely anecdotal, but it's a data point for me
4) Cost: Obviously really expensive and also comes with the opportunity cost of not working - by no means am I trying to undermine the cost here. But like some of the others mentioned, I don't know anyone who got an MBA, returned to private equity / banking / hedge fund, and regretted it because of the cost. Given your background, presumably you're in your 20s and have a visible path to career earnings which over a multiple decade-long career will hopefully make $200-250K of cash (+2 years of opportunity cost as a junior/mid-level) relatively minor. The benefits above to an MBA might grow / diminish in cycles, but regardless of ebbs and flows in the finance industry, that stamp on your resume and that network will never disappear.
5) 2 years of vacation. I think as a lot of people point out, it's an "expensive vacation", but when considered in the holistic sense, there's some definite value (at least to me) of being able to enjoy 2 years without real responsibilities (especially if you enter B-school knowing you're going to coast and then go back to your fund as a VP) while you're also in the prime years of your life.
Again, not saying that any one choice is the right on, but these are at least some of the things that I've been grappling with as well. Best of luck in making your decision!
Hit on all the major points here.
If you're a Principal at a VC firm and love what you're doing and where you are in life then there's probably little reason to go. In tech, it's almost a badge of dishonor in some circles.
If any of the points above apply to you, then it might be worth considering.
Lots of of good points here and exactly why I'm thinking holistically and deeply about this decision.
To clarify: - I have not asked explicitly, but I probably could not come back to my firm - they don't see the value in an MBA as no-one at the firm got one.
There's also some weird dynamics - we are growing AUM and very resource constrained (it is for some reason hard to recruit for the backgrounds the partners want -deeply technical but business savvy). We get great talent inbound but they are picky, hence not wanting me to leave.
They've promoted folks from my role to partner who are doing similarly well, so they almost confused when I told them I needed a letter of recommendation for my MBA.
I have some fairly substantial carry I would be giving up. If the fund does what i think is a "base case", the carry is worth quite a bit in 4-5 years when our investments exit. If I get promoted another title shy of partner, that carry would be worth more. I got lucky as I was the first junior hire at the firm and they have been great to me.
At the same time, I could totally see a probability where the fund does not succeed and I'm trying to find myself a new gig in 3-4 years! And I could be tired/burned out.
I went to a non-IVY but solid school in Undergrad (think UChicago/Northwestern/Duke) and HBS could help solidify my network, branding and executive presence. I certainly don't have a strong brand name on my resume.
I actually went and spoke with many HBS/GSB/Wharton grads and the thing that struck me was while they enjoyed their social experience but the majority felt like... it was largely a wash in terms of their career. It certainly helps with signaling credentals, etc. - but most of these folks had really impressive career trajectories and decided to press pause to go elsewhere. Many also warned that the recruiting process isn't a sure shot, and you can end up in the same or worse position.
I do worry about downside protection a lot. Who knows what will happen? And an HBS MBA will certainly help if I need to pivot my career.
I am curious - do you see non-MBAs have a hard time pivoting or landing on their feet? Especially relative to folks with MBA's? I do worry that not having the HBS degree will make it harder to lateral if things didn't work out
Just wanted to share perspective as someone 5-10 years out of HSW. I think one of the biggest challenges in getting an MBA is that the benefits lag graduation substantially, but once they kick in they are equally substantial. The network in particular really only becomes valuable starting 5 years out; but as you start knowing partner/MD level folks at every bank, every MBB, and a fair few PE/VC funds you suddenly realize that you know who to call when you’re fundraising, searching, sourcing etc etc. And further, as you get older, who you actually knew well in bschool becomes less important - the common bond strengthens while the specifics fade. When I was fresh out I wondered why I had gone; now I don’t question it.
That said you are in a super challenging spot! I think you need to make a gut check on whether or not your firm succeeds, and none of us can help with that.
One other element to consider... one of those weird parts of becoming senior - EVERYTHING you do becomes a gut check. If you’re an operator your equity value is a gamble, if a consulting or banking partner you’re betting on your ability to sell. This is great practice for you as if you stay in finance the time will come when someone expects you to buy into a fund and you won’t have the luxury of a long debate.
Hope that helps from my limited perspective.
I'm at H/S/W. You're thinking about everything the right way and asking the right questions.
In your shoes, I would more-likely-than-not go to HBS (but in your shoes, I would not have gone to Wharton without a full-ride)
Why would you go if you're me? I'm curious on your opinion as someone who went when cost was taken out of consideration.
duplicate posting
I think for me what sealed this is you can't likely go back to your firm afterwards. If that was different, I would have said go, but without it, you're giving up too much (ie your dream job in your dream industry, with carry to boot) to leave to get an MBA.
I got a great compromise for you - Columbia or Wharton exec MBA program, which meets either every other Friday and Saturday or every Saturday. Granted, that's a big commitment, plus some homework etc, which would lead to a demanding two years, but you get the best of both worlds. A great brand name, an incredible network, the opportunity to take classes and learn things you never would have learned on your own (I went to an MBA business schools">M7 and some of my fave classes had nothing to do with finance), lots of friends made, but you still get your salary, and don't lose out on bonus, carry or career progression. So opportunity cost is zero. Sounds like this could be the right balance for you.
FWIW my boss did the Wharton Friday/Saturday one a few years back, and the firm was "supportive." The quotes mean they were supportive in terms of his time (and not counting them as vacay days) but privately grumbled about it behind his back. But hey, if your firm is facing you leaving the firm, they would probably jump at the chance for you to only miss every other Friday/Saturday. Another friend of mine did the Saturday program, which means you don't miss any work time, but you also don't get a break - you have to go every week, not every other week. Still, most weeks he looked forward to it, so not as crazy as it seems. He ended up starting a business that he started at Columbia through an entrepreneurship class, so it was well worth it for him.
I should also mention that my friend who did the Columbia Saturday program, who founded a business he started there, got seed money both from his colleagues at his current firm, but also some classmates, faculty members, and a grant from from Columbia. If that doesn't show the power and real-life impact of the EMBA program, I don't know what does
I am glad to hear that the eMBA program has such an impact.
I strongly believe that knowledge is attainable anywhere, its how you apply and utilize it to the fullest amount shows how skilled one can really be.
Thanks for this. I will definitely look into those programs
Not to argue against myself, but I think I am a bit more worried about the firm not doing well (most new VC firms don't!) and having to lateral from a very unknown firm to a new one.
Getting a Principal role in venture is ultra-competitive, there are so many fewer roles than in PE. There's also the fact that the HBS name will probably get me access to another "tier" of firms.
Of course I'm very happy now and on partner track, which makes this such a tough decision.
As of now I'm speaking with folks that went to HBS and are Principal's/MDs at Tier 1 firms to see how easy it is to get VP (not associate!) roles if I were to go to HBS. Most folks say I'm silly to think I couldn't get one, but we will see...
More and more - I see it as a value judgement. Things will probably be fine either way, but do I view early financial stability by 30-32 + a little more upside/risk + existing happiness (current trajectory) OR do I care about career stability + de-risking + taking time off?
Biggest learning in all of this has been that the value of even an HBS MBA is strong, but in tech its value has gone down ~substantially~ over the past 5 years. Companies are just as excited to hire folks who have been at Stripe, Uber, and other successful start-ups.
Your equation seems more obvious at this point. Think about it this way: You would be leaving the VP/Principal position in VC to get a name brand like HBS on your resume, so that you can hopefully be a strong candidate to be...a VP/Principal in VC.
You're worried about your VC firm not doing well, which would mean you have to change jobs, so you solve that by...changing jobs. In this case your solution to the problem is the same result that the problem would cause.
Don't get me wrong HBS and Wharton opens doors. If you do recruit, you'll have more interviews with that on your resume than without it. But what also opens doors is a spending a few years at a VC and getting promoted a few times, which is what you're doing now.
Stay the course, consider the EMBA
I'm not going to bother reading all these replies. The answer is simple. Forget going back to school and just continue to build your track record and personal brand. No point in wasting time with academics if you've already made it to a post-MBA role.
>I’m not going to take the time to inform myself, but here’s my opinion anyway:
Why would I care about someone elses opinion when I've got more than enough experience to provide value with my own? Thanks salty anonymous guy.
Sincerely appreciate the advice from everyone, including senior members here. I'll do a AMA about VC at some point to pay it forward.
I decided I'd put a small initial deposit down at HBS to give me a little time to decide. Worth the cost ($1K) given the magnitude of the decision.
Asking folks about MBA programs has actually been somewhat of a Roscharch test - almost tells you more about the person you're speaking with.
So, it appears you have two options before you:
1) leave post-MBA role at VC/Growth Fund to attend HBS 2) turn down HBS and continue in post-MBA role at VC/Growth Fund
There actually is a third option (somewhat of a "hack") that is virtually unknown but worth considering:
3) Accept HBS's offer and go through the matriculation process. Request vacation time off from work in late-August/early-September to attend all mandatory events and classes at HBS for a nominal period of time (but less than 2 weeks). If you stay for more than 2 weeks, you will be charged tuition which is non-refundable. Under 2 weeks and you will not be charged tuition. Once the nominal period of time is up, request a leave of absence from HBS and return to work.
HBS seldom allows students to defer offers of admission. They make exceptions for medical cases and other unusual circumstances (e.g. family emergency, visa issues), but by and large, if you are accepted, your options are pretty much to accept it or turn it down. Even their own official website says as much.
–How long can I defer my acceptance? Candidates should submit applications only for the year they plan to enter the MBA program. Postponements and deferrals are granted rarely and are considered on a case-by-case basis.
You can certainly ask for one but your odds of being granted a deferral (especially one that is longer than 1 year) are not good. If you turn them down, you would have to reapply and go through the entire admissions process (essays, letters of rec, interview, and even the GMAT if enough time has passed, etc.) all over again if you decide later that you changed your mind. Since you were accepted once, you have reasonably good odds of getting accepted again, but there is no guarantee.
So what is one to do if they are accepted to HBS but are unsure of leaving their current gig which is a good post-MBA position? Well, you can maximize your optionality by doing Option 3.
Once you officially matriculate to HBS, you are no longer under the purview of the HBS admissions department. For better or for worse, once you matriculate you are "in the HBS system" and out of the hands of the admissions department.
Requesting a leave of absence as an enrolled student is very straightforward. I knew a handful of people in my class at HBS who took leaves of absences between the 1st and 2nd year to work on startups. I also know some people who did the Option 3 "hack" and only showed up for classes for the first week before bouncing out. From an administrative standpoint, both the former and latter are treated as exactly the same - "A student who requested a leave of absence"
Once you request a leave of absence, you have up to 5 years to return to resume your studies. If you go over 5 years, I believe you either go through a special petitioning process or you might possibly be required to reapply again - it depends on the individual and these things are always handled on a case-by-case basis.
In summary, the pros and cons of utilizing this 3rd option / hack:
Pros (+) You maintain maximum optionality for yourself by keeping your job while having the option to return to HBS (without going through the hassle of the admissions process all over again) and get your MBA anytime within the next 5 years
Cons (-) You will essentially be taking away a spot in the class of someone deserving who really wants to attend HBS (-) You will potentially miss out on some very significant friendships/relationships in your section and you will be forever known within your section as "that guy" who dropped out of the MBA program before it really started
Very useful advice. I'm not sure I would feel comfortable with going just for two weeks. Seems quite selfish, and separately also the sort of risk that could permanently be blemish your reputation.
Something I HAVE heard (and you have confirmed this) from very select students is about folks who, quite intentionally, go for one year (9 months) with an inclination to drop out, while working part-time for their firm or on their startup.
I have heard second year is kind of light in terms of class and that while more trips/extracurriculars are then, you will still have made friends from your section and the name will be on you resume forever. This has been happening more and more the past 2 years.
Might pitch my partners this. If they're not open to part-time work and getting an HBS guy back on the team in
Sorry it took me so long to get to this from your PM.
I love Deo et Patriae's suggestion. Awesome unconventional, outcome-oriented thinking.
throaway92 You are reviewing this decision thoughtfully. Your quote here sums it up really well.
I'll give you the short answer and then unpack it. I wouldn't go, and the single reason is that you're in venture.
I know you said growth equity, but I've written before on here about the two definitions of growth equity: one in the context of private equity (read: mature businesses) non-control investments, and the other being later-stage venture capital rounds for startups achieving exit velocity.
If you were in traditional private equity, I'd say go. Here's the logic.
One:
There's a higher count of firms looking for post-MBA talent in buyouts than in venture. It's still a small set of opportunities, but it's larger than in venture. Secondly, private equity has much more of a standardized intake mechanism for that talent. The firms actively recruit from the school, a select few even offer an internship, there's a conduit.
Venture does not require headcount to scale. You know this. I haven't read your AMA yet but I've seen a couple of your comments and you demonstrate that you know the game. So when guys set up a shop, there's such little turnover in the partner ranks that they really don't add bodies.
Two:
Time works differently in buyouts than in venture. You get a lower count of things done (fewer deals made, exits achieved, overall rep count) than in venture, even though the dollar scale is different. Not saying one is better than the other, it's just like football versus rugby: different sports with similar mechanics.
What this means is that while the entire Class of 2022 is parked in school, the high-performing buyout guy who forewent two years in the field may only have given up executing one platform deal and one add-on, while the high-performing venture guy sitting next to him probably forewent six or more deals total (and an exit or two, hopefully) in the same time period.
Viewed from the other angle, the venture guy who skipped the Class of 2022 and kept working got way more under his belt than the buyout guy who skipped matriculating.
You're at the stage where you're looking for every rep possible to make it to the partner level, so the cost of foregoing those reps is non-trivial.
Three:
You can promote vertically to the partner level in venture through a job switch. You can't in private equity. Partner searches in venture (for a firm that doesn't have the internal option) tend to take about a year. Strong firms with a small partner roster are really careful about who they add to the partnership. A big factor is how long that person can stay plugged into the firm. Someone who is currently a partner somewhere else is probably loath to forego their carry in startups that already have meaningful markups. They're probably older and a little more 'used up', so they may only have one or two more funds in them before they step back. A hire from another firm is probably about 30, could do 4-5 funds easily, and is only leaving Principal-level carry. It can be a win-win for everyone. There are numerous instances of people with 3-5 years with the Principal title at one shop getting announced as a new partner somewhere else.
You never see that happen in buyouts. You have to make partner before another firm would consider you as a partner. This is why you see more lateral transitions at the Vice President level in buyouts; people are shopping for the place they want to plug in as a partner, because the only real way to get there is to earn it vertically.
Four:
You can get promoted very quickly in venture based on performance. Sharp people usually progress in titles every three years, sometimes four. I'm thinking of three friends right now in venture.
These are anonymized, but you get the drift. It's possible to move up the ladder pretty quickly if you do the right things and do them well.
Five:
The perception of the degree is very different in venture relative to private equity.
First, your deal audience is very different. In venture you're interacting with people who have a renegade enough mindset to think that they can reshape an industry by carving out enough space for themselves from established players who are resourced well enough to defend their turf violently. Even at late stage, founders tend to have a worldview that eschews conformity and conscientiousness.
An MBA conjures up the image of a shirt and jacket-wearing stiff who was cool sitting in a classroom for two years listening to people tell them things. Obviously I'm being a bit droll here, but you get the drift.
Conversely, those are the very reasons people considering selling their company to private equity value the degree behind all the senior guys at the firm. If you're a privately-owned business (maybe keeping a minority interest after the transaction), you are reassured by the stability and maturity it connotes. If you're one sponsor selling to another (and more than half of private equity transactions now are sponsor-to-sponsor deals), you appreciate the unspoken norms of your shared experience: the whole pedigree of great school to great bank to great firm to great b-school to more of the same.
Even the LPs most active in the respective asset classes tend to examine a GP through different lenses.
Close:
Altogether, my point is that if you skip school and keep working, it's very feasible that 12-36 months after what would have been your graduation date, you're either partner at your current shop or partner somewhere else. Neither can be said about a guy in private equity, because the years required to promote internally are longer and the opportunity to promote through a job switch is absent.
For you:
We can tailor this to some of the things you shared in subsequent comments.
The fact that they promote internally is a bright green light. You have a clear path to one of the easiest jobs on the planet (the classic "great work, if you can get it"): partner in venture.
The fact that the founders of your firm are remarkably selective about who they bring on speaks highly to how irreplaceable you are. The reason you got such quizzical looks when you mentioned recommendations is because they can't believe someone who's got a golden ticket like that would ever leave.
One wrinkle to this is if there's one more pre-partner title. If you've got to wait an additional 3-5 years to make partner, that feels a lot more like private equity's promotion schedule.
I really love bleedblue82's comment about a gut check. Your real decision factor has to be whether you think the firm will succeed. If the answer is yes, you're going to get paid (you mentioned attractive carry) and you're also in the enviable position of being early man onto a growing thing.
I disagree with the point TMoneyNY made about an executive MBA. The value is not the same. The primary dimensions of value you receive from an MBA program are the credential, the network, the recruiting opportunities, and maybe the education (particularly if you're a career-switcher). With an EMBA:
I'm not dogging on the EMBA. One of the most successful people I know did the Columbia weekend program. He couldn't take time off for the MSRED so he did that instead. He's now done almost a billion in development, and from the IQ he's gained on deal structure, was able to follow the independent sponsor model to acquire a business that was a tenant in a commercial property he acquired through his real estate platform. He's crushing it in two asset classes. My goal is for everyone to be able to make informed decisions.
I hope this is helpful for you as you make yours.
Should just include an option to be able to auto-bookmark anything a specific poster writes that's over a certain character threshold... WallStreetOasis.com
+1 as always and I'm not even in PE / VC / Growth
Not OP but reding this is incredibly helpful and I'm sure I speak for many in saying thank you for taking the time to write out many thoughtful posts like this. It's incredibly generous and helpful!
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