IB -> Strategic Finance at MF Portco (tech) -> Investing?

Hi everyone,

It's been a long time since I posted on here, so appreciate that this community has grown stronger over the years for all the prospective monkeys out there. I started my career in Energy IB at a BB down in Houston and had hated the culture and the industry down there. Heavy face-time emphasis with little to no real junior camaraderie. I tried to transfer over to TMT within the bank but it wasn't possible and I wasn't really getting any looks from Tech PE firms. Had an interesting strategy and ops role at a unicorn startup that was at the intersection of energy and tech (think EV battery and manufacturing) come up when I was nearing the end of my second analyst year and truly desperate- startup blew up due to a funding round falling through at the last minute and my offer got rescinded. Ended up not going after them legally as I felt like it wasn't worth it for the minimal upside / I already felt like I fucked up enough by leaving my stable banking job for something that imploded before I even started. 

6 months of unemployment later and I land a fully remote strategic finance job at a technology portco for a MF PE firm (we are a unicorn startup 11 years old). I always wanted to be in tech so I was happy to be working in SaaS. I currently live in NYC and my job is more of a strategy / FP&A type role- I've learned a lot about strategic modeling for operational initiatives and packaging / pricing of software, cohort and retention analysis, LTV CAC, and how to influence decision making for go-to market solutions / features using modeling and data. I've also learned about the more vanilla FP&A work (board reporting, monthly close, budgeting). After being here for around the 2 year mark (PE fund is trying to exit but having difficulty), I'm interested in moving towards something a little more stimulating. I don't think I can handle the crazy hours of banking anymore, but something a little more high pressure with higher comp would be ideal (Strategic finance generally pays pretty low). I want to go towards the investing route, hoping that my strategic finance role for a portco could come in handy as I have a lot more operational knowledge on how tech businesses are actually run compared to when I was banking (atleast for SaaS PLG type businesses). However, it's been 2 years since I really touched a deal process beyond helping to run a search for my current firm and engaging with a few banks (most of that was handled by our CFO and probably PE firm besides the random diligence and data requests I would help with). Couldn't find a buyer, and I don't think there's going to be an exit anytime soon (in the next year or so). 

Is it still possible for me to recruit for a MM PE firm that does tech transactions or even a Growth Equity firm? Am I better off gunning for VC considering it's been awhile since my last true deal process? I really don't want to have to go back to banking and go through all that bullshit again, but I do feel like I might've fucked up my opportunity the first go-around being that I was young, dumb, and trying to escape at all costs without realizing the opportunities I could have had. I still do a fair bit of modeling and willing to grind to brush up on technicals and LBO mechanics. Trying to also avoid the MBA route considering the costs. I don't know if I'll be in investing long term, but find that it's a skillset that people really value from a career perspective. Strategic finance exit opps feel a bit limited despite the CFO route (quite rare and probably can't be relied upon). Appreciate all thoughts and the help here!

8 Comments
 

Based on the most helpful WSO content, here's what you need to know:

Your background in IB, combined with your strategic finance experience at a MF PE portco, positions you uniquely for certain investing roles, but there are nuances to consider:

1. Middle Market (MM) PE or Growth Equity (GE):

  • Feasibility: Transitioning into MM PE or Growth Equity is possible, especially if you target firms that value operational experience in SaaS and tech. Your exposure to strategic modeling, SaaS metrics (LTV/CAC, cohort analysis), and go-to-market strategies is highly relevant for tech-focused funds.
  • Challenges: The gap in deal experience (2+ years) might be a hurdle for traditional PE roles, as they often prioritize recent transaction experience. However, your operational insights could make you a strong candidate for funds that value portfolio company engagement or operational expertise.
  • Action Plan:
    • Brush up on technicals, especially LBO modeling, as you mentioned. Many PE interviews will test this rigorously.
    • Highlight your SaaS expertise and operational knowledge as differentiators. MM PE and GE firms often value candidates who can bring more than just deal experience, especially for tech-focused roles.

2. Venture Capital (VC):

  • Feasibility: VC could be a strong fit, particularly for firms focused on SaaS, PLG (Product-Led Growth), or tech startups. Your operational experience and understanding of SaaS metrics are highly relevant in VC, where evaluating early-stage companies often requires deep knowledge of business models and growth strategies.
  • Advantages: VC roles typically place less emphasis on traditional deal experience and more on industry knowledge, network, and the ability to evaluate startups.
  • Action Plan:
    • Network with VCs who focus on SaaS or tech. Your experience at a MF PE portco could resonate with them.
    • Position yourself as someone who understands the operational challenges and growth levers of tech startups, which is a valuable perspective in VC.

3. Avoiding Banking or MBA:

  • Your reluctance to return to banking or pursue an MBA is understandable. While an MBA can open doors, it’s not the only path. Networking and targeted preparation can help you bypass these routes.
  • Consider leveraging your current role to build relationships with PE or VC firms that have interacted with your portco. Warm intros from your CFO or PE fund contacts could be invaluable.

4. Strategic Finance Exit Options:

  • While strategic finance roles can lead to CFO opportunities, as you noted, these exits are rare and long-term. If you’re looking for a more dynamic and higher-compensation role, investing (PE, GE, or VC) is a logical next step.

5. Next Steps:

  • Networking: Start reaching out to MM PE, GE, and VC firms with a tech focus. Use your operational experience as a selling point.
  • Technical Prep: Dedicate time to refreshing your modeling skills, particularly LBOs, as this will be critical for PE interviews.
  • Targeted Applications: Focus on firms that value operational expertise, such as growth equity funds or operationally-focused PE shops.

In summary, transitioning into MM PE, GE, or VC is achievable, but you’ll need to address the gap in deal experience by emphasizing your SaaS and operational expertise. VC might be slightly easier to break into given your background, but with the right preparation and networking, PE or GE is also within reach.

Sources: Breakdown of Post-IB Exit Opportunities, Q&A: 1st year VC analyst (~750M AUM), Lesser known MBA career options? Looking for advice on what to do post-HBS., Breakdown of Post-IB Exit Opportunities, Transitioning from tech to a serious finance job (yes, you read that right)

I'm an AI bot trained on the most helpful WSO content across 17+ years.
 
Most Helpful

Sure,

Senior analyst (1-2 years IB experience is around 110k base +10% bonus + RSU / stock options varies but around $30K vested over 3 years from what I’ve seen in similar portcos)

Manager (2 years of strategic finance experience on top of a couple years of IB experience) is around 150K base + 15% bonus + same stock component

Senior Manager (3 yrs of strategic finance experience on top of IB) is 175K base + 15% bonus + stock

Beyond that you get to VP of Finance level which looks to be around $230-250K base (unsure about stock or bonus for this but likely significantly higher) - path to promotion here seems a bit unclear tbh in terms of number of years of xp

 

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