What the title says. I went from IB to VC. Interested in GE/PE buyout as well for a new learning experience.
I assume that it’ll be easier go from VC to GE. But is it possible to go from VC to PE? Or if I get to GE, go to PE from there?
I’m doing very well in my current job but I want to continue to learn about the equity side of the cap stack holistically and just generally love to learn and want to continue to grow.
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Transitioning from Venture Capital (VC) to Growth Equity (GE) or Private Equity (PE) buyout roles is indeed a path that some professionals consider, especially those who have prior investment banking (IB) experience like yourself. Here’s a breakdown of how you might approach this transition:
VC to GE: Moving from VC to GE is generally seen as more feasible due to the similarities in investment stages and the focus on growth-driven investments. GE firms often look for candidates with a strong understanding of how to scale businesses, which is a skill set developed in VC. Your background in VC, combined with your IB experience, would be quite valuable here as GE involves more mature companies than typical early-stage VC deals but still requires a growth-oriented investment approach.
VC to PE: Transitioning directly from VC to PE, especially to a buyout-focused role, can be more challenging. This is primarily because PE buyout roles often require deep experience in financial modeling, leveraged buyouts (LBOs), and more comprehensive due diligence processes typical of later-stage investments. However, your IB experience is a significant advantage. It likely provided you with a solid foundation in these skills, which are crucial for PE.
GE to PE: If you decide to move into GE first, transitioning later into a PE buyout role could be smoother. Working in GE would allow you to bridge the gap between VC and PE, as GE shares some characteristics with both fields. In GE, you would gain further experience with later-stage companies, which could position you well for the more rigorous demands of PE buyout scenarios.
Networking and Skill Enhancement: Regardless of the path you choose, continue to build and leverage your network, particularly with headhunters and professionals in the GE and PE sectors. Additionally, consider enhancing your skills in financial modeling and understanding complex deal structures to make yourself a more attractive candidate for PE roles.
Consider Your Long-Term Career Goals: Reflect on what aspects of VC, GE, and PE align most closely with your interests and long-term career objectives. Each field offers different experiences and learning opportunities, so consider where you see yourself thriving the most.
Given your successful track record in VC and your desire to learn and grow, you are well-positioned to make these transitions. It will require targeted effort, especially in networking and skill development, but your background provides a strong foundation to build upon.
Sources: Does it make sense to go from software CD->traditional PE if my end goal is software PE?, Q&A: 1st year VC analyst (~750M AUM), Moving from Asset Management into IB / PE, PE vs VC vs GE, Can someone break down PE Associate exit opportunities?
Much easier to go to GE, buyout PE from VC would be very difficult even if you're willing to take a title hit/stay the same e.g. you're a VC ASO/Sr ASO going into PE as an ASO vs expecting to recruit as a Sr ASO/VP. Perhaps if you have very niche specific VC experience that applies to a vertically-focused PE strategy then it becomes a bit easier, but it's probably not happening at a UMM/MF even if you have a blue chip VC on your resume. By growth equity I'm assuming you mean more of the mid/late-stage investor that might also run up against multi-stage VCs vs something like TA or other growth-oriented PEs - the former I think being fairly straightforward to recruit for (focus more on scaling the business's unit econ, helping build scalable processes, etc.) vs the latter running into similar problems as buyout PE. I got my first work exp in VC and it was definitely a bit of an uphill battle to move over into PE and a lot of the above was what was told to me + personal experience.
Would have to agree that this will be a hard transition, even more so in this environment. Buyout PE and early stage VC are two completely different roles at the junior level. While you may spend a small portion of time helping source add ons for existing PortCos and other thesis work, you will largely be underwriting new platforms which means data analysis, modeling, and building IC decks. Not to mention the types / size / complexity of businesses is drastically different. Not to say it’s impossible by any means but it would be tougher to justify choosing your profile over hundreds of other experienced laterals without such a steep learning curve.
What about going the other way? Buyout PE to GE/VC?
Possible if you move quickly from tech-heavy fund but gets exponentially tougher the longer you stay in PE - exception is growth buyout (TA/Warburg/etc..) that is easier to move to. DD is similar but everything else is vastly different. Don't really see that much happening and my main concern for all those candidates is that it's two quite different cultures and worlds.
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