2Y IB / 4Y MF - How to get up to speed on the Tech Industry
I currently have 2Y of experience in a top 3 IB and 4Y of experience in top 3 large cap PE. In both instances, with limited exposure to Tech.
I am looking to re-brand myself as a "Tech Investor" with a focus on growth / later stage Tech (i.e. think a Citrix buy-out, not an OpenAI series B).
I have a basic understanding of most verticals, but the goal would be to accumulate as much knowledge on Tech as quickly as possible through e.g. books, broker research, relevant news sources, angel investing networks, etc., and have a deep understanding of all major verticals. I.e. I want to comfortably step into an interview with e.g. Warburg, Tiger, Thoma Bravo, and impress the interviewer with my understanding of secular trends, end market dynamics, competitive landscape, business models, etc.
- Which major verticals would you focus on?
2. What sources would you recommend?
- Any other strategies to improve "branding" / credibility? (e.g. angel investing)
Bump also interested
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Best approach would be building a strong personal network and meet more people.
Unless you’re able to join a fund that solely invests in tech, networking around would be the best approach.
Would focus on SaaS and Tech Services as that’s the most common segments for PE to invest in. If you can get your hands on MoffetNathanson anything, it’s by far some of the best reading material to understand a business.
Would also check out ICONIQs website. They have articles on a whole bunch of stuff and it’s a good resource to learn buzzwords and trends. Also would recommend the SaaS CFO
Verticals: SaaS is king, but understand the software model inside and out generally. Including old boring perpetual licenses, maintenance, term licenses etc. many scaled software companies are undergoing a “SaaS transition” so knowing how to model that out is key. Other verticals of interest could be Internet / E-commerce, since that is a marketplace model, but it’s much much simpler to understand (toll taker businesses). There is a ton to chew with software across vertical software, hortizontal etc. so focus there for sure. RBC has a good multi-part software primer that remember reading some time ago.
Are you a VP now and are you going to be recruiting for Senior Assoc or VP roles in tech? If going for VP roles, I think it’ll be very very tough to convince someone it’s worth the risk.
The big tech buy-out shops have a ton of lateral candidates from other big tech buy-out shops so breaking in as a mid-level w/o tech experience is going to be very hard. Our laterals all came with tech backgrounds (fund size $5-$10bn)
To build credibility: none of the big tech players are going to care at all about you angel investing $25k in a <$1m rev start-up. The other candidates will be talking about SaaS buy-outs done and portco work.
Your suggestion on angel investing giving creditability juxtaposed to you saying you want to do Citrix type buy-outs doesn’t make a bunch of sense to me / raises some questions.
One path for you could be go do Corp Dev in tech for 2 years then try to get back into PE as a VP. That would be a better profile, IMO, than hiring a mid-level w/o tech experience and trusting them to figure it out when I could just hire another tech investor. Solves credibility issue. Might make sense if you have to leave current job anyways but appreciate that could be very expensive for you.
Maybe the market is different now but I got tons of tech VP interviews
Can you tell me which fund it is? MF / UMM…?
Was this recent? Feel like the market’s been v slow past six months
It's going to be really tough to break into one of the big tech-only shops (SL, TB, VEP) at the VP level with that background, but if you're gunning for crossovers (you mentioned that you would want to interview with Tiger) that's a lot more feasible. I have seen shops like Greenoaks and Coatue take not as tech-focused people. Also, it might be easier to work at a generalist MF with a strong tech practice, like H&F or Clearlake, or some firms like the fund I'm at will have groups that have a strong secondary focus in tech (e.g. Media & Tech Services, Financial Services & Technology).
Additionally, if you're okay with getting an MBA, then you can try running the post-MBA VP recruiting gambit. I know KKR, Carlyle, and Vista all hire out of MBA programs (the former two have pretty good tech practices in Menlo Park). Realistically speaking, tech investing has a really high concentration of top talent in finance – there are a lot of target school kids studying CS who are going to places like SL, KKR MP, Vista, and FP out of undergrad (and also a lot of kids who are going to top tech banks and then MF tech PE) who are absolute superstars after their analyst and associate stints. It's not realistic to think that you can punch pound-for-pound with these guys when they've been investing in tech for four years longer than you – reading/studying can only take you so far you need practical experience.
The prior comments are spot-on.
This is going to be hard to do at your level of experience. If you were successful, it would be a slightly longer path. The 'prep' you're imagining is something you'd have to conduct for awhile in order to perform passably in interviews.
I believe you may succeed best by accepting a two-step sequence.
If you're at one of the heavy hitter megafunds, try moving to a generalist firm with a heavy focus on services. (Alternatively, do this internally at your current firm if possible.) After a few years there, you'll have enjoyed adjacency to the tech-focused firms through portfolio overlap, acquisitions, exits, industry events, and what have you that (a) people should know you, (b) you should know enough to no longer be 'faking it' without having ever made it, and (c) you'll know whether you actually like it enough to commit to it as your partner-track path.
Angel investing is not particularly relevant. It's useful only in that if you really dedicate to making yourself intelligent in the areas you choose to focus on, you should learn about emerging developments that you could speak about in a way that makes you sound smart. All of which pales in comparison to actual experience in your day job.
You asked about good resources. A16Z moved their in-house content arm to a separately branded platform called Future. The Information is great. Stratechery is as well. Benedict’s Newsletter has good context type pieces. Gergely writes very well at the Pragmatic Engineer, but it's not better for what you're trying to do than those I already mentioned.
Quite frankly - I disagree with many of you.
I receive inbounds to join Tech buyout shops all the time - it's more about landing a job at the top 3 Tech firms.
There are multiple precedents of colleagues making that exact move.
The question was "what is a good source to accumulate knowledge on the space" - I was not looking for opinions / career advice on how to make the move or "you need to do an MBA" type of advice.
Also on angel investing, I fully understand the irrelevance of it vs. large Tech buy-outs, but I do think of it "signalling interest". If you have limited touchpoints with tech investing on a daily basis it helps to demonstrate your "interest", whereas I fully agree that it's more of a hobby.
So let me ask the question again - what do you consider the best sources? (websites, e-mail lists, certain equity research analysts, which X verticals would you focus on, etc.)
You sound fucking insufferable and full of yourself, maybe work on that before thinking about industry knowledge
mods could we get a ban here? Thanks.
I agree with OP’s sentiment- only APAE was remotely helpful
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I'm not a tech expert but just came here to back up OP against these linear thinking hardos...
Don't listen to them. I've seen much crazier transitions get done with enough hustle and creativity. I myself transitioned at mid-level from distressed to a top growth equity shop in one go (literally thought to be opposite investing disciplines, I came in with many gaps in knowledge vs. peers but closed them all within first 6 months). Have seen others do same. People in finance all think what they specifically do is rocket science... it's not. They are all more of the same than they are different things.
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