How is Start-Up experience looked upon?
(Chimp, 7
Points)
on 10/15/09 at 11:59am
Hey guys,
I am contemplating starting-up right after college and was wondering how 1-3 years experience with your own company is looked upon when entering in PE later. Especially considering the high chance of failure will this still be considered valuable experience? I am specifically asking about PE and not VC, would be greatful for any insights.
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After 1-3 years of general start-up:
Financial Modeling Skills = 0
Knowledge of LBO = 0
Knowledge of 10-K/10-Q/... = 0
Knowledge of M&A process = 0
Why would PE hire you if it could hire ex-Analyst from solid MM who knows his/her shit?
pussinboots-guy actually
pussinboots-guy actually makes a good point. i went through the motions of starting a business right out of undergrad. i quickly realized that this is not the kind of economic environment you want to take risk in. or at least this was the case for me.
what i learned from that experiment is that if you do fail - and you probably will - its nice to have some practical and marketable skill sets you can fall back on. attempting to start a business out of undergrad might be a nice story to bring up in an interview, but you dont learn much from a failed start up. and you definitely wont gain any relevant skill sets for PE.
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man made the money, money never made the man
u got a point
while you got a point, i think you can acquire quite an extensive skill set, considerable business sense for starters and some credibility when it comes to evaluating management, opportunities and so on.
I've been in interviews twice with smaller shops and was asked if I have any entrepreneurial experience. The Partners there had very diverse backgrounds and possibly looked for a non-conformist route, i dont know.
But that made me curious, other comments?
I think all of the above are
I think all of the above are pretty logical, but I think it would probably lean more towards the other comments (no relevant skills for PE). However, i think this would probably look better in VC where its less financial and more managerial, however PE is still managerial but definitely more financial.
Everyone has made some very
Everyone has made some very valid points thus far. Start up experience will undoubtedly be valued ten times more in VC assuming the company is of any value. If you start some dud company just to say you started a company, VCs would question your ability to assess the idea/marketplace and therefore question your ability to evaluate their investments.
Generally, I don't think it transfers as well for PE. You may learn some the basics of financial modeling, but would still be leaps and bounds behind an Ibanker. You may find a PE shop here and there that likes start up experience, but overall the PE recruiting process is pretty formulaic unfortunately (Ibank first). However, if you are in it for the long haul and end up building a great company that down the line may need growth capital or even become a PE acquisition, it could be an interesting way to develop PE contacts. But again, this would obviously be a long and difficult process.
If you are serious about starting your own company, you need to do it because you are passionate about it, not because it could potentially be used as stepping stone to PE.
How feasible is the path of
How feasible is the path of joining a start-up after your 2 years at a GS/MS/JP IBD, spending ~2-4 years at the startup, and going into PE after that? How would one approach recruiting (would there be headhunters involved)?
Would it give you credibility to have the business sense previously mentioned?