NEED HELP: on-cycle for MF or MM PE if I want entrepreneurship long term?
Gonna keep this short and sweet. From a top school at a top EB and am incredibly torn about where to focus my efforts for on/just off cycle. Long term I want to start my own startup and maybe go to business school for the network, but honestly don’t feel like I need any more “prestige” on my resume due to undergrad/banking group.
Option one: I’m optimizing for location, then strategy because I want to start my business in a growing tech city that isn’t NY/SF. I’m interested in growth in tech and related fields or middle market buyout as I believe working with earlier stages companies will set me up better when I try to run my own - but I’m afraid of handicapping myself by going to an unknown shop that is good for their niche, but not readily known elsewhere.
Option one: MF Growth arms, UMM buyout that is closely related to my future industry in NY or SF. Pros: Elite compensation, pretty certain ticket to HBS/GSB should I want it, Brand name on resume (would this matter when trying to raise startup $ in the grand scheme of things?), supposed better network. Cons: Brutal hours (assuming the MM shops I’m thinking of are better…), working on big deals that are sexy for WSJ but not really applicable for young companies raising funds, Living in a city I don’t want to stay long term in.
Option two: MM buyout / pe shop that is closely related to the industry I want to start a business in. Pros: In a city I could see myself starting a family in, much stronger hands-on operational experience with portcos/more likely exit to c-suite of one, more likely to promote within for star associates. Cons: (not sure but assuming) Much weaker comp, loss of brand name which could fuck me if I do want to go back to bschool, what else am I missing?
I don’t want to waste any HHs time and have the benefit of waiting for off cycle and still receiving great opportunities - but I also don’t want to be dumb and intentionally pass up on a “bigger” opportunity because I have a pretty good shot at one. Help me out on this fellow monkeys, happy to answer follow any follow up questions
sorry cant help with the options but if your goal is entrepreneurship why are you doing PE? as far as I know being a PE investor doesnt teach technical skills you could use to make/manage a product, and a vast majority of funds dont give the operating experience youll need to run a company, so Im curious to hear how you are thinking about this.
Valid question. I have a technical undergrad so I understand product building but wouldn’t be the primary builder. I have a buddy in tech who is bullish on the idea I have and would be down if I could completely handle the business side. I agree that PE isn’t even the most relevant business experience, but mostly IB/PE is participation in the risk averse path and a way to quickly accumulate money post grad and buy myself time to bulletproof/soft test our idea. My thought process that earlier stage PE/VC could be somewhat relevant in terms of understanding the fundraising process, knowing what investors want to hear, KPIs, market knowledge, GTM strategy etc. that a lot of technical founders don’t really understand
makes sense, thanks!
Why not GE or VC if you want to start a business? Seems like the natural place to be for an entrepreneurial-minded person, you'll be close to early-stage businesses and end up with a great network for later down the line.
MF/UMM is far removed from the startup side, even MM buyout is pretty focused on established businesses with a lower EBITDA, rather than growing early-stage businesses.
I'd also handicap your odds a bit more. No one has a "pretty certain" ticket to HSB/GSB with a regular IB+PE background, that path is very competitive since there are 20 trillion PE Chads looking for those seats. Yeah, some firms place very well, but unless you have some huge hook I would not count that as a sure thing. IMO IB + 2yrs top-tier VC, with some startup experience is a more competitive profile for GSB.
Also last thing - if you're planning to do on-cycle I would try to have this figured out, or at least pick one for on-cycle. No HH is going to want to hear "Yeah I'm interested in MF growth... maybe MM buyout... NY, SF, or this other city..." you can say you're location agnostic but you won't get any interviews if you sound indecisive on this. Assuming that's why you're making this post, but if you have any calls coming up over the weekend maybe push them a few days until you have a firmer grasp on this.
Sorry, but this is just a silly question. Do either for a few years and you’ll have what you need from the corporate world. Particularly as someone from a top school and EB, doing “MF” vs “MM” PE vs GE or VC will give you absolutely ZERO marginal experience as an entrepreneur compared to the other options. Being an entrepreneur/operator is fundamentally different from being an investor. At some point when you truly understand yourself and your skills, you’ll have a better sense for which path is best for you. Usually you aren’t fit for both for what it’s worth
I would leave ASAP to pursue entrepreneurship before you get too old and increase risk.
Before kids? NBD to lose your ass on a co.
After...probably more of a problem!
You could work for a small independent sponsor or LMM PE firm run by an entrepreneur but nothing beats being in the seat for rapid upskilling/experience required.
Good news is that your background makes it way easier to raise $ at a great valuation right out the gate.
This doesn't seem like sound advice. If anything, it would make more sense to stick with IB/PE until you're relatively stable financially. That way, you can learn, gain experience, develop connections and use the skills/contacts you've developed to apply to your startup. It's been proven before that successful entrepreneurs typically tend to be older/more experienced
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