I'm in PE now, but wasn't in industry before. Getting my MBA soon so am looking to best position my current experience to maximize my post-MBA recruiting opportunities.
Everyone says deal experience is prime. However, my firm only averages about one deal per year; fortunately, I'm working on a deal right now, and it's probably one of the most interesting deals the firm has worked on since it was started.
With regards to deal experience, what kind of experience is ideal? What experience would be good and what wouldn't really matter?
I don't think I'll be able to write about cutting the purchase price by some significant amount due to my own personal actions haha, but at the same time I don't know what I could best be doing through this deal process to look the best on my resume going forward.
Deals are always nice to have. However, not as critical as in banking since your duties are more than doing deals. Engaging with portfolio companies is also good to have, you always want to show you can strike a balance. People in PE appreciate the well rounded skillset so I'd say try to gain experience in both fronts.
Personally, I think you might have more "deal experience" than you think. Some items I might consider adding to your resume are:
1) Work on any follow-on financing rounds for portfolio companies 2) Financial modeling for new product acquisitions on behalf of a portfolio company 3) Financial modeling for roll-up acquisitions by a portfolio company 4) Any flow of funds or valuation analysis relating to a portfolio company exit
I'm sure there are more scenarios, but all of those would exhibit similar responsibilities to working on a new deal. As Patrick B mentioned above, a future employer is going to want to see that you are comfortable working with portfolio company managers in any facet as well as handling the day-to-day tasks of modeling for new fund acquisitions.
Okay, I've done a few of these things: 1. Involved in the recapitalization of a company, essentially a deal in itself, going to investors to raise new equity to dilute down former managers that were invested in the business. 2. Haven't done any modeling of new product acquisitions but I did reach out to another firm that bought a business containing a product line that one of our portfolio companies wanted to acquire. It fell through but it did get through a CA and to putting a valuation proposal together. Not sure how useful this is or if I should put it on my resume because it fell through. 3. I did the financial modeling for a deal that merged one of our portfolio companies with two other companies that we're buying, roughly doubling the size of the company. Still working on this one but expected to close at end of January. 4. I put together a waterfall and valuation of the units of one of our investors as they were considering getting out and we were going to propose to buy their units. This also involved researching to support the discount we put on the units for minority control in a small firm. It never went through but we did end up proposing a deal to them. I also just put together a waterfall analysis for one of our larger investors on the above recap/deals mentioned, which was somewhat complex.
Anyways, I just feel like I don't have a lot of deal experience as Patrick B said, a balance is good to have between deal/operational experience. We are long term investors so we don't do a lot of deals, so a lot of my experience is in managing the portfolio and working with the companies. That's why I was wondering what I could do on this deal we're currently working on to beef up my resume, as it will probably be the only deal we do while I'm here (though we have an exit that might come through, but I'm not holding my breath on it).
In addition to what heloo17 wrote, here are a couple of thoughts:
You should highlight deals where you and your firm completed the full gauntlet of diligence (internal dd, market studies / customer calls, legal, IT, environmental, etc.) and submitted an LOI (not IOI...), whether the deal closed or not. Getting a deal all the way to the finish line is great because you can highlight your experience working through SPAs, credit agreements, etc. and that you can handle all the mechanics of buying a company. If your firm is tackling any of those items and you aren't involved, ask to help or at least be able to look over the more senior deal team members' shoulders as they work through those items.
More importantly, you should be able to talk to future employers about why you pursued the deal: why was it a good company, what were its growth prospects and competitive positioning, what value could your firm as the new owner bring to the table, what was your vision for the business in 5 years, etc.
Remember, you are an investor and your goal is to make money - in private equity, "the deal" is the conduit to doing so but is a mechanical process that doesn't matter if you can't identify why you want to own a business and your "playbook" for helping the company and management develop and execute on its strategic goals.
I hear ya, but in PE funds this is more common than you think especially when you come from a sell side mindset. Often what happens is that there's a lag between raising the new fund and exiting the other fund where there's not really deal generation going on. Also, the due dilligence in some of these funds just takes a lot time. When I moved to the buy side I only did 5 deals in a little more than 3 years! That's pretty much once every 7-8 months, so I did spend a lot of time working with portfolio companies in many interesting things that were very akin to financial modeling.
For instance, I did a restructuring of an energy company, prepared the sales memo for another stake we had on an investment to sell to a PE fund and many other interesting stuff. So bottomline is deal experience is good but do take advantage of doing other interesting stuff in these gigs as they really make you stand out.
A good resume is one that brings many skillsets come across different type of engagements. If you just have 5 deals doing the same stuff even if its in different sectors I guess there's less to sell as opposed to having maybe 2 deals, 1 restructuring, 1 follow-on, 1 exit transaction of a PE, and so on. Then you really bring the whole package.
That said, its also perfectly acceptable to put a failed transaction but just keep in mind it might be taking space for something that can shed some new light on your skills.
What about a bullet focusing on deals you screened. Personally, I think its good exposure for people to have seen a lot of deals because it provides a broader framework. You can speak to the analytics, research, diligence you did across various industries and recommendations you made as to why / why not pursue certain transactions further. Granted this isn't a foundational point but a useful tack-on so to speak.
Guess you can put something general like "Screened and executed multiple transactions with special emphasis in X,Y,Z, sectors with 4 moving into due dilligence stage" or something like that. I think its good but just be general, no need to explain each deal you screened. There's little value added as opposed to seeing it as a whole.
Yes, this.
You may not have done as many deals as others, but perhaps you have played a more integral role on the deal team. If you are at a smaller fund, you need to try to focus on the pros instead of the cons (comp, number of investments, size of investments).
You probably have more experience sourcing, negotiating IOIs/LOIs, working through issues that arose, providing guidance to portfolio cos, etc. than bigger, more structured firms.
Sure I've played an integral role, but there's three of us here and so everything is done pretty much in collaboration. I don't have experience sourcing deals, negotiating etc. by myself because of it. We do everything pretty much together.
Doesn't matter. You need to step up and fucking own it
Dolorem dolorem ducimus est enim itaque modi cum. Voluptatem magnam cumque facere quis.
Et dolores magnam minima est. Minima qui vel voluptas dolorem explicabo perspiciatis. Nobis nostrum non earum sed. Itaque molestiae deleniti in vitae est aliquid.
Quidem veritatis fugiat vero ea alias incidunt odit. Sed animi non est rerum rerum adipisci ea. Esse et enim exercitationem officia sunt ullam.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...