Hi,
How feasible is it to move from growth debt to growth equity?
Struggling to find growth equity positions at the moment and wondering if I should be open to growth debt opportunities as a stepping stone?
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Based on the most helpful WSO content, transitioning from growth debt to growth equity is possible but comes with challenges. The key difference lies in the philosophical approach to investing: growth debt is more risk-averse, focusing on downside protection, while growth equity is risk-seeking, emphasizing upside potential. This shift requires demonstrating that you can adapt to the mindset and skill set needed for equity investing.
Here are some actionable steps to position yourself for the transition:
Develop Technical Skills: Growth equity roles often require strong financial modeling and three-statement analysis skills. If you're lacking in these areas, consider taking courses or certifications to build your expertise.
Highlight Relevant Experience: Emphasize any aspects of your growth debt role that align with growth equity, such as evaluating business models, understanding growth trajectories, or working with high-growth companies.
Networking: Leverage your network to connect with professionals in growth equity. Informational interviews can provide insights into the transition and help you identify potential opportunities.
Target Smaller Funds: Smaller growth equity funds may be more open to candidates with non-traditional backgrounds, especially if you can demonstrate a strong understanding of their investment strategy.
Be Strategic with Recruiters: Work with headhunters who specialize in private equity and growth equity placements. They can guide you on how to position yourself effectively.
While growth debt can serve as a stepping stone, it's essential to remain proactive in pursuing growth equity opportunities and building the necessary skills to make the leap.
Sources: Breakdown of Post-IB Exit Opportunities, Growth to Buyout Transition, Breakdown of Post-IB Exit Opportunities, Private Debt/Direct Lending Exit Opps?, Private Equity Interview Questions - 13 Topics to Know
Any luck? How did you break into growth debt, route taken to get there? Skills needed? Also curious about growth equity if you have any insight there.
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