Knowledge Gap Between TMT ER & GE

Based on the highest ranked content on WSO, transitioning from TMT Equity Research (ER) to Growth Equity/Venture Capital (GE/VC) involves a few key knowledge and skill areas you'll need to develop. Here's what you might consider focusing on:

1. Understanding of Venture Capital and Growth Equity Dynamics: While you have experience in TMT ER, GE/VC involves a different investment approach. You'll need to understand the nuances of early-stage and growth-stage investing, including how to evaluate startups, assess growth potential, and manage risk in less mature companies.

2. Deal Sourcing and Due Diligence: In GE/VC, sourcing deals and conducting thorough due diligence is crucial. You'll need to learn how to identify promising startups, conduct market research, and perform due diligence that goes beyond financial modeling to include aspects like product-market fit, competitive landscape, and management team evaluation.

3. Cap Table Management and Deal Structuring: You've mentioned structured/preferred equity and cap tables, which are indeed important. Understanding the implications of different funding rounds, dilution, and exit scenarios on a cap table is essential. Additionally, learning about various deal structures, terms, and conditions that are common in VC investments will be beneficial.

4. Portfolio Management: Unlike ER, where the focus is on analyzing and recommending stocks, GE/VC requires active portfolio management. This includes working with portfolio companies, understanding their strategic needs, and sometimes taking a board seat to guide them towards growth and eventual exit.

5. Networking: Building a strong network in the startup ecosystem is vital for deal flow and due diligence. This includes relationships with founders, other investors, and industry experts.

As for resources, WSO offers a variety of courses and guides that could be helpful:

• Private Equity Interview Prep: While focused on PE, this can provide insights into deal evaluation and structuring that are relevant to GE/VC.
• Financial Modeling Resources: Deepening your modeling skills, especially around scenarios and sensitivity analysis, can be beneficial.
• Networking Guide: This can help you build and leverage a network in the venture capital space.

Remember, while there is a knowledge gap, your analytical skills and understanding of the TMT sector can be a strong foundation to build upon for a career in GE/VC. It's about adapting those skills to a new context and learning the specifics of early-stage investing.

Sources: What am I expected to know as an incoming ER SA?, Why are you still trying to break into equity research?, Another Investment Banking reflection, Would you rather be in a TMT group or M&A group? Why?, GS TMT/FIG vs PJT RSSG vs Evercore M&A, BY EASE OF RECRUITING