Buyout to Earlier Stage Investing
Despite what my title says, I am a second year associate at a buyout shop (KKR, BX, Carlyle) in NY. I have had a good experience but ultimately realized I’m more interested in late stage venture / growth equity. I am not interested in attending B-school.
I’ve researched the team pages of several top firms and it looks like there is a decent amount of people who have made the buyout to earlier stage investing.
Can anyone who has made this transition speak to their experiences (1) during the transition/job hunt and (2) on the job?
Greater focus on understanding of business model in order to get comfy w/ pre-profit businesses and making bets on underwriting top line growth rather than margin improvements/wc unwind
Active incubation and shepharding of portcos vs late stage maturities, definitely more interaction with the management
i’d say definitely easier to do buyout -> GE transition than vice versa
I did the reverse transition so can't speak to the job hunt but can speak to the differences on the job.
Allocation of time:
Diligence
Sourcing
Portfolio Work
Internal
We're both anonymous but I'm happy to discuss with you further if you have any questions in private about tailoring your resume as I can speak to recruiting pretty in depth. In general you are going to have some large firms gatekept by headhunters (shocker) but a lot of the smaller ones doing really cool stuff are off the grid. For example, one of the guys who sourced a unicorn (e.g., Spotify / Facebook / etc. type stuff) at a blue chip fund (Accel/Sequoia/etc.) has since started an extremely successful fund and does all of his recruiting through personal networks. This makes sense, since networks are the name of the game in early stage and growth.
I'm a first year associate at an UMM buyout shop who contemplated recruiting for consumer growth (GA consumer, L Catterton growth) before ultimately opting for buyout. Growth has always been something my mind (as a possibility after business school perhaps or lateral opportunity), but for now I'm enjoying the first couple of months at my current shop. Just curious, how are you liking buyout so far and what compelled you to make the transition? I think any insight here will helpful given you've been on both sides.
I am having an absolutely terrible time.
After having tasted earlier stage, buyout feels much more boring and limiting in the intellectual stretches I make on a day to day basis and the depth of relationships I am able to build.
If you want to drop anonymous I will PM you and we can catch up more (I am always interested in comparing notes with people in similar situations - my profile of large PE and then contemplating moves to growth is almost identical).
Also, I am aware of a strong consumer growth shop (a little earlier than the GA / L Catterton type, but an extremely respected name) that is recruiting right now if you are interested.
I made the switch from MM buyout to late stage VC / growth and think this is spot on. All the modeling and long memo / deck writing skills seem to mean very little in growth. It's all about sourcing. Pace has also been much faster - from 1 to 4 deals per year to almost 10 (although not as intense). Happy to compare notes as well.
Op here. All super helpful comments thus far.
I am curious - during your recruiting process, what resonated with earlier stage firms coming from a buyout background? What did they like and what concerns did they have (if any)?
thanks in advance
Wow, this is incredibly helpful - thanks for sharing all this. Not OP, just commenting here so it saves on my profile and I can come back to read this again later. I'm hopeful to one day make the opposite switch (traditional buyout --> late stage venture / GE) so having both perspectives laid out like this is a great point of reference.
Best of luck!
Thanks for this. Contemplating the same move (moving from large buyout). I'm curious - did you make the switch to growth in the end with or without MBA?
Mollitia iste labore sint eos eius. Saepe maxime placeat sit quia veniam rerum nemo. Perferendis et nisi animi ut excepturi libero.
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