Going back to PE after starting a business?
Looking for advice from anyone who returned to investing after a break, whether entrepreneurship-related or not.
Long story short, I left a well-known MM fund to start a business. Before going out on my own, I took a CoS role at a startup to understand how to actually run and grow a company. This definitely helped me understand sales, marketing, ops, and generally running a venture-backed company, but further removed me from PE.
I'm coming up on a year working on my business, and it's becoming very clear this isn't for me. I could write a whole separate post on why, but in a nutshell, I feel like I'm going to spend most of my existing net worth on this business before it becomes a source of income, while not reaching my personal goals like starting a family, buying a home, etc. And if I push through and give it more time, I would be too far removed from a finance career to return. So I decided to go back to PE, figuring the door wasn't fully closed yet.
So far the outlook has been bleak. Even my existing headhunter relationships aren't eager to respond, and the ones who did have mostly siloed me towards portco roles. Coming back as an associate with zero credit for my post-PE years is table stakes, but I've come to terms with this. Inbounds have dried up almost entirely, although this may be because of on-cycle.
Has anyone worked through a similar situation and successfully returned? What ended up working? Is there any point to networking, considering most PE processes are gatekept by headhunters anyway? I'm sure there are growth or operationally-focused funds who could find value in my experience, but given how sporadic off-cycle openings are, cold outreach seems like a shot in the dark.
Aware this isn’t PE focused but have you considered going downstream into VC (and maybe growth)? Wouldn’t your skillset/long-term ambitions be more aligned there? I’m across the pond but they tend to be more welcoming of backgrounds and experiences. And also, networking helps there more and so less HHs gate keeping positions (unless they’re the big VCs ofc)
Later-stage growth would be fascinating, if possible. My impression was growth shop recruiting was still HH-driven, but you're right, def worth exploring.
I never liked venture. Even as a founder, dealing with VCs was one of my least favorite activities. At the junior level you're just calling on founders to get info. But at all levels, there's way too much noise and FOMO-driven groupthink around the latest tech trend. Don't get me wrong, there are very talented venture investors out there who find diamonds in the rough and shape industries, but the experience of the typical VC at the typical fund has never been appealing.
What level were you when you left the MM fund? 2 years of associate experience?
1 year as associate - maybe this is what's holding me back.
Harsh truth, but I actually think this is a bigger issue than your path thus far. For those who just glance at your resume in a pile (and don’t get to hear your story and intentions), we’d see immediate red flags given you didn’t complete your 2-year commitment and have jumped between jobs quickly. Again, for an uninformed onlooker, it calls into question your focus and commitment.
I’ll assume your old firm feels burned and doesn’t want to entertain bringing you back? Otherwise, I’d suggest focusing on direct outreach to LMMs and first time funds that may struggle to attract traditional candidates (particularly the latter) and carry more risk for both parties
Not shocked that HHs have shelved you. They largely deprioritize anyone without a clean story in my personal experience when I went through associate recruiting.
The only answer here is to network. It's too messy of a story for any HH to really push you hard unless you had already cultivated that HH relationship way in advance (which you clearly didn't). It will be a slog and it could take you a couple of years (really), but if you keep networking and talking to people, telling your story, and improving it based on feedback, you'll get there eventually.
I came back to investing after a break, but did it through an MBA. I would consider this if you're able to get into a top program.
here's the case in point on the risks of leaving corporate and starting your own business. I've seen posts on this forum where young kids ask whether they should leave IB and start their own business, and the majority of comments are usually "take a chance while you're young, you can always return to IB if it doesn't work out". here's the case in point on why it's not true.
my advice to OP is to broaden your search. you only did PE for 1 year, so your experience is not strong enough to enter such a competitive industry again.
Yeah I think that is the risk if you want to come back to the industry. But there's not really a good time imo, every part of the career journey comes with some risk so depends on your mindset, risk tolerance, and life situation. OP is probably late 20's so still pretty young and can reset if they need to. Worst case they could do an MBA and get into banking (then go into some PE shop).
If they left when they are older sure they would have more PE experience and could bounce back into the industry more easily, but they would likely have a family at that point and would have other considerations (less energy, more responsibilities, higher cash burn, etc).
You're on the money - I wanted to try earlier since I didn't have any real responsibilities or expectations of stability. I actually spent a few extra years in banking so am a little older. This was partly why I was confident in a return - on balance, my career is clearly IB/PE with only the last few years unrelated.
But Kevin is 100% right - the attitude towards a return feels completely different from reality. I didn't take leaving PE lightly and spoke ad nauseam with colleagues and friends. The attitude was unanimously "Take the risk, no matter what PE will always be there"
MBA will cost $200k, so you'll need to spend the next 5 years just to break even (2 years of MBA, 3 years of paying student loans after) in a best case scenario - you still need to get into a good school, spend lots of effort recruiting and get a job, spend lots of effort and endure stress at work.
If he sticked to PE for as long as he could, until he got pushed out, he'd probably have $1M+ in his brokerage, then he could try launching a business, and if it didn't work out, just retire in Thailand/Philippines.
"Tracked" careers have now ruined young people's ability to "fail" or take a chance, one wrong misstep and you're out, the other generations didn't have these same pressures
Yeah 1 year as an associate is tough. You will need to be an associate 1 again most likely and you will be older (but I assume late 20's so not that old) so you need to convince someone you're really hungry. As others have pointed out you should network hard, work on your story, and maybe consider B school. I think it is doable though but will most likely be at first time or smaller funds.
Couple thoughts on this. First off, kudos to you for betting on yourself and trying something different. Careers are a long and iterative process, and there’s fewer one-way doors than people often believe.
I think you should ask yourself why you set off on this path in the first place. Will going back to an investing seat lead to you wanting to jump back to entrepreneurship in two years? Not necessarily a bad thing but real success comes from compounding skills and knowledge over the long run.
It’s important to understand the role of a HH and when they are useful. Everyone coming out of banking has these relationships because analysts are easy for them to place and placing candidates is how they get paid. They will always prioritize candidates who are easy to place and the further you deviate from the path, the less willing they will be to work with you.
Prioritize your network and the people who have a vested interest in you. The ask is simple, “here is my situation, what would you do if you were in my shoes.”
It’s no secret that the PE hiring market is soft right now. If you really want to get back in, you will need to hire yourself. Go into discussions with well thought-out investment ideas and potential deals. Show that you’re being proactive and you’re a real thought partner and not just an excel monkey. If you’re really motivated to get back in, you’ll find a way to make it happen.
Cheers
Here’s another viewpoint: maybe stop being a pussy and quitting right when it starts to get difficult. A business is not built in one year, you have to persevere. Imagine if every founder just quit like that, nothing would ever get done. Feel free to scurry back to your safe space though, it’s obvious you can’t handle the heat.
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