Confused Scientist: Where do I fit in? Strategy Consulting, Venture Capital, et al.

Ok trying to start a very open-ended "I'd like to learn more about the underlying structures of the financial industry" type discussion, and part personal advice; I'm trying to figure out where I can fit in 'finance' but work on things I find interesting.

I'm trying to figure out what to focus on (what skills, industry, employment, etc.) but I realize I really don't know much about banking or management consulting, or how they interconnect with other industries.

  1. *Me: I am a scientist - ok I've realized I shouldn't claim the 'scientist' label as I don't have a PhD; so - science-person? - (astrophysics and biochemistry, UG + 2 MS degrees, published) interested in analyzing new science/tech innovations, quant/qual trends, studying new markets, and working on valuing very early-stage technologies or companies. I'm also very interested in helping develop new technology directly (but I'm not an engineer and have less interest in working in software/hardware/IT directly, though I do like technology management and working with engineers).

  2. My belief has always been that some sort of venture-capital related role would put me in the right environment (I see it as pure VC (e.g. working at a VC firm etc.) and VC-related (e.g. working in technology commercialization, IP valuation, corporate VC, and a bunch of other things that I at least perhaps wrongly associate with the same type of work.).

  3. I also know that working in either VC or VC-related type roles are extremely competitive, though I don't find that answer especially enlightening. Traditionally, I understand that those in IB and sometimes consulting often see PE/VC as a 'higher level' version of what they do already, and so it's often considered a terminal industry/employment goal for them.

And yet I'm not convinced what I want to work on has that much semblance to IB. Fewer and fewer people who work in the venture-area are bankers by background, and many increasingly seem to be engineers, technology management and even strategy consulting types. Most of the VCs I know opine that this has a lot to do with the fact that VC is just not a very quantitative-intensive area and many investment decisions are more strategic/trend based (which lends itself perhaps better to those already working in technology or consulting type thinking) than high-level financial modeling, FO IBD and the complex M&A work they traditionally do.

In early-stage VC, many companies barely have any revenues, so I've had senior VCs tell me there just isn't that much "finance" involved that isn't quite basic.

But that's anecdotal.

  1. I'm more fuzzy on the Consulting connection. I have a fairly hand-waving understanding of the various works that Management Consulting people do, so I suppose I wonder if perhaps this might be a place I'd enjoy working or not, and whether indeed it would be a good place to start in terms of what I want to do. It does seem many innovation/technology/VC types do often have some consulting-DNA. But I just don't know enough about this.

  2. I know it's long and tedious, but if anyone has any idle completely non-rigorous thoughts or observations on where new science/technology, strategy, consulting, and finance intersect, I'd love to read what they have to say as I think about longer-term career plans, and what to pursue.

  3. I guess it really all comes down to this: I want to work in finance, but only if it involves science, technology, and new innovations in those industries. I'd be ok working in finance for awhile without it but, eventually, if it doesn't come back to letting me read/write/analyze/model/discuss/opine on science/technology directly, then I wouldn't want to do that. I'm trying to figure out how possible that endpoint is, and how people, a priori, go about doing that?

Thanks in advance!

 

Your questions is very broad, and probably best answered with a thorough search through the forum. That said, VC sounds like something you'd like (but the exact role you're looking for would only come through after multiple years). The best way into VC, as far as I know, is TMT at a reputable shop or MBB consulting (maybe some boutiques like PA consulting also place well for something that niche?).

Can't you speak to recruiters/careers advice people at your school about your situation? They basically do this for a living, and would likely be better placed to help you.

 

Hey! Thanks so much for reading all that!

  1. I could have clarified it better though - basically I want to make sure the job I'm imagining doing actually exists.

  2. I think the 'classic' VC highest yield was as you say, basically GS TMT group to a VC firm on Sand Hill road; and it does still work. They're basically considered (rightly or wrongly) the best technology financial analysts out there, so when it comes to VC, they're the go-to expertise.

But A. I'm not sure that's still all that true, I believe VC has diversified a lot in terms of who works there from what i've seen anecdotally, B. Obviously those TMT type spots are vanishingly few/uber competitive and C. I don't have an excellent handle at what they do precisely on a granular level. Which convinces me I should just ask someone who works in that role...

So thanks for giving me that idea - I hadn't thought of that. (I'm not in school, and in my experience career offices don't really understand anything past undergraduate entry-level jobs, where these types of 'what do I actually do in this job/industry' never come up because people are too worried about getting hired in the first place lol)

  1. But more apropos, this leads to really the crux of my question. Does the job I'm thinking of actually exist - even if you get to work in VC?

Example. A lot of late-stage spectrum VC (what I call PE) doesn't interest me at all. This is where you're valuing the various components of mature technology companies, investigating their IPO potential, doing raises, probably shuffling management, modifying culture, etc., etc., basically it's PE-style work for a very NEW company.

I would argue a lot of the Sand Hill firms do a lot of their work at the more mature stages just because they tend to only back larger firms. But I know they operate across the spectrum so I could be misreading this a bit, and every firm is different.

  1. As a scientist, I think I'm interested in the seed-early stage of VC, which (again this is how I understand it, which I'm assuming is probably totally wrong) I would imagine is much more focused on the TAM analysis, the underlying technological potential, the technical basis for the CCD sensor sensitivity on your satellite, the biochemical studies showing the drug works, etc., reading scientific and technical papers, looking at startup teams, and taking a lot of risks.

That's what I want to do.

If early-stage VC is like that, I'm good. I just want to find out this actually does happen. I know for a FACT since I worked there a bit that university-licensing and technology commercialization offices (which are very static and small so not very big on hiring) do a lot of the type of work I just described. They're interested in patenting, licensing, spinning off and sometimes commercializing new science and tech the university creates (e.g. Juno, the hugely successful oncology company with the big IPO last year, was born in these offices). So I'm making the leap that parts of VC do similar work.

If someone can say yes you're right or no they don't do that for me in VC, THAT would be the answer to my question.

 
Best Response

I think I may be able to help shed some light on the transition-to-VC aspect just a bit. I am a Ph.D. in biotech with start up experience. I am also looking at the possibility of doing VC down the road and thinking of using strategy consulting as a shuttle.

For the type of VC role you seem to be looking for (early stage VC), most firms will want you to have in-depth industry/product knowledge and preferably some involvement in a successful start up. This is if you want to get the VC role without any consulting/IB experience (not sure if you plan on doing these before attempting VC). PE is basically out of the question until you get IB or MBB-level consulting experience.

Here are problems that you will encounter (not trying to be an asshole, just want you to know what you are up against): 1) You don't have a PhD. Doctorate shows you can read high level scientific data and is also used as a major "qualifier" in place of MBA or a strong track record. 2) Not sure if you have specific industry experience either, this is useful in early-stage VC. 3) No start up experience.

I suggest looking in to MBB consulting. Its probably the most direct way for you to get entry in to VC. You can also try to work for a VC-backed start up and then transition over but thats insanely difficult to do. I don't think IB is really that helpful in getting in to early- stage VC because the skill set you get in IB is better catered towards later stage companies where modeling and major transaction experience (M&A, etc) can be useful.

 

Hello; Thanks for your careful read!

  1. I completely understand my lack of a doctorate locks me out of the 'scientist' roles that might otherwise be a good way to 'enter'. I had always intended to get a science PhD and then go into investing type work; it was my whole plan. Unfortunately it just got really messed up, I went to M.D. program instead, hated all of it (it wasn't science; think clinical medicine, didn't like the people, was not going towards an investment/commerce type role at all), so I left after 3.5 years into the program with an MS for time served.

So unfortunately I wound up sans doctorate.

  1. Why don't I just go do the PhD now? Good question of course. Many reasons, but mainly I don't want to spend 4-6 years doing something that, after medical school, I lost a lot of direct interest in on its own merits. Further, I've since learned that the doctorate (say life sciences, or physics, which would be my two probable areas) would really tend to be relevant only at very specific narrow areas of investing.

So PhD in life sciences would only really be relevant at a healthcare investment group, physics maybe at an energy group, CS/other tech at a tech investment firm, etc. While it would have been fine 6 years ago as I had planned, I don't want to go down the route knowing what I know now; and not really wanting to be a research scientist in the first place.

I know it's twisted logic, and maybe doing a PhD is my best out (esp for what I want to do) but... I'm just can't go down that road again right now.

  1. I'm interested in working across sciences - generalist investing. I like studying different VR technologies, aerospace tech, CAR-T protocols, all of it. I know VC analysts who do exactly this with no background in the sciences at all, so I know its possible.

  2. This brings me to your suggestion, which of course is True. MBB type consulting work is usually the best fit for someone like me (indeed... it's where many of my colleagues and similar-story types ended up). I'm not completely sure how the 'move to VC' works, but I'd say it's about as good a chance as one is going to get... Many generalists that work in the early-VC spectrum seem to share consulting.

Furthermore, this prevents one from being squeezed into a single area as a PhD might (like healthcare investing, which while I'm ok with, I'd actually prefer to avoid after medical school experience). That said, for others, I still think it's a GREAT strategy for scientist-types, I just wish it had worked for me!

  1. As for MBB consulting... While I know this would be the 'solution set' to this type of problem, I'm wary of making my goal so narrow and specific given how difficult it will be to work there (plus my messed up background).

I'm currently entering an MS Finance program and will be focusing mostly on MBB consulting with this in mind but given the odds... obviously I'm worried about what my 'backup' plan should be; haven't figured that out yet.

  1. On IB, I suppose I'm just unsure on this. I need to figure out how much energy to put into this given my goals. I know that M&A, in addition to being uber competitive, may not really wind up skilling in the areas I'm interested in. I haven't actually seen many early stage VCs who were ex-bankers, but again anecdotes. Certainly, the endless modeling and specialized knowledge don't seem well suited to the sourcing, due diligence, market analysis, and consulting-style trend research that those early VCs do.

But on the other hand M&A is just generally very respected overall, and if one could get that type of role (which IMO would be easier statistically than trying to get into 1 of 3 consulting firms...), I don't know whether that would work out viz VC.

I also don't think people can 'partially' prepare to get IB roles... it seems an all-in effort. Do people cross-prepare for IB AND consulting roles very much?

  1. Perhaps there's some other strategies that I'm missing or haven't thought of. There are MANY open roles in 'innovation finance' including small investment firms, but many require a consulting or IB background.

Perhaps it's just as simple as... work in IB/consulting... and then make a transition happen on your own.

Perhaps not.

 

"I know for a FACT since I worked there a bit that university-licensing and technology commercialization offices (which are very static and small so not very big on hiring)"

Why are you so focussed on figuring out whether VC does approx. what you mentioned and when VC is super competitive, when your dream job already exists and doesn't require you to do consulting/banking first?

 

That's a really good question!

  1. University Tech Transfer (UTT) absolutely requires a PhD (and specifically one in biotech/pharma or EE/CS so its very narrow in terms of who would be working in it)

I don't have one/don't want to do that whole road anymore.

  1. In addition to the narrowness of UTT, which makes it difficult to do anything else (but if you love pharma etc. then you're good!), the other issue is UTT ONLY focuses on the patents, inventions, etc. of the university they work at. Their mandate is to commercialize things the university invents, so it's a very constricted space that they operate it, not really what I have in mind in terms of finding interesting tech/inventors/companies.

Furthermore UTT is mostly biotech/healthcare pharma. The majority of industries (and the majority of sci/tech in the world) they never touch.

  1. UTT doesn't really invest in anything, so its much more about legal/IP type work; lawyers and PhDs are overrepresented.

  2. UTT has fairly limited exit opportunities to anything else; it does happen, but it's not ideal.

  3. All that said, I would argue you DO need some sort of related experience (AND a PhD) to work in tech licensing; I wouldn't qualify right now.

I WILL definitely try to work there after my MSF degree in the finance area (its small but exists), but it's not really a stable solution.

So basically, yes it does exist, I'll try to work there when better qualified, but I'd prefer to get at it from the VC-side.

I'm mainly asking just because I wanted more commentary/opinions on it; which I'm getting!

 

Your posts still aren't making sense to me, it seems like everyone is telling you something can't be done/doesn't exist yet you're intent on pursuing it anyway.

I think you mentioned that you're not in school right now - what are you doing currently? How far out of UG are you?

And, on the MS in Finance topic... that is a degree to get into more pure finance, not really VC. Even then, I wouldn't recommend getting one (or any masters, really) unless you got into an elite program.

 

I'm not sure how much more detailed I can be, I think I've traced and analyzed the logic fairly well (at least as it pertains to me personally, I'm trying not to just focus on my issues which are unique); I think it all makes perfect sense actually.

The types of things I want to do certainly exist, though it can be a bit fuzzy where exactly they happen; I mean people analyze new technologies and science from a business perspective in a huge variety of fields, so I don't really think that's cause for a debate. My original question was perhaps too neutrally phrased - I know these things exist, I know people who do them, I just find myself personally unqualified or locked out of doing them for various reasons. I was just looking for some color commentary on VC/science connections and I got one...

I'm definitely attending an MSF program as its certainly the only thing that seems reasonable to me right now. Unfortunately most other suggestions have failed and I've spent a while working on them. Career advice is often quite unhelpful I've found, if only because many individual cases necessarily have unique or limited solutions.

I think if I managed to work in consulting, I might be able to fix things up.

 

You're right in that VC firms mostly tend to fall into the buckets of 'tech' and 'healthcare', and while some firms may invest in both sectors, the people do not cross since the latter requires medical/scientific expertise.

It seems like you like VC, but the short answer is that the top VC funds (which is where the returns are concentrated) almost always require pedigree. They hire from GS TMT not because the work experience is relevant (you're right that it really isn't), it's just these guys are smart, interested in making the transition to VC and they've worked at all the 'right' places along the way.

University tech transfer is an option for you, it tends to attract science/tech-interested people with more wayward backgrounds. You've correctly assessed though that it doesn't have much in terms of exit opportunities and virtually zero principal investing work.

Working for MBB will definitely open some doors, but it's going to be incredibly difficult to get a position at a good VC firm with your background.

Edit: This is probably more useful if we take it offline. Send me a PM if you want more color.

 

"interested in analyzing new science/tech innovations, quant/qual trends, studying new markets, and working on valuing very early-stage technologies or companies. I'm also very interested in helping develop new technology directly (but I'm not an engineer and have less interest in working in software/hardware/IT directly, though I do like technology management and working with engineers)."

Fellow scientist myself, so I can't speak to what all of your opportunities are, but I have also heard that you can't just go straight into VC without proving yourself for a few years doing something else. Do NOT do the PhD though, will not help you and takes way too long. My question is, why does it have to be IB? Wouldn't ER in either TMT or Biotech fulfill the first part of your interest here? It won't be easy to land a job right away, but there are several shops that would treat the masters degrees and science background as a huge positive in your favor.

 

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