Hi everyone!
Some of you know me as a long-time poster on WSO, but this time I am seeking advice and would greatly appreciate any insight from people who may have been in a similar situation.
To put it in a nutshell, after a couple of years in M&A I moved to a large cap fund where I work on a mix of VC, PE and public investments. On paper, the job is awesome but for plenty of reasons we spend our lives screening investment opportunities and never end up investing (unlike the other teams) despite sitting on a huge pile of cash. I feel like I am wasting my time, neither building the right skillset to move up the ladder, nor the network required to move to another fund.
My job quest has proven to be incredibly challenging as I am either too senior or too junior for most roles, not to mention that traditional PE funds blame me for my lack of deal experience as an investor (I have completed over 30 deals as an M&A banker...).
So now the real question is what do I do next? Staying at my current company is not an option because developing skills at this stage of my career is way more important than earning lots of money. I genuinely love being surrounded by entrepreneurs and love the investing process, so whatever the route I choose the idea would be to stay / move back / go to VC/PE in the long run.
Here are the options I have in mind, but there might be others:
1) Going back to M&A at the VP level is the easiest option, but I kind of dread the idea of working extremely long hours and not be able to develop my network. Obviously, there is the financial upside but I see it more as a trap than anything else. One possibility would be to join a firm advising startups and young Tech companies, but they tend to require a TMT background that I don't have
2) Joining a fast growing startup in a corporate development role. I can't pretend this is the most exiting route, but it seems this is a path usually greatly appreciated by Seed / VCs. If so, I guess it would be a temporary move (18 months or so), but query what happens if I can't move back to an investment firm.
3) Sticking to my original path and looking for a PE/VC job whatever it costs, although that may mean being unemployed for a fairly long time. Holes in the CV seem to be extremely badly perceived by both recruiters and employers in the UK, so not sure this is a very smart option.
4) Joining a startup as a co-founder and seeing where things go.
I must confess I am really in the dark right now, so any help would be greatly appreciated!
Thanks,
Camondo
Hi Kanon,
Let me address your different points.
My team does not invest because my boss can't make up his mind. He is terrified by the idea of making bad investments (he's made a few terrible ones in the past), so he does the very strict minimum to live on his extremely comfortable package without being fired (although that will happen eventually). To put it simply, he doesn't have the investor mindset and that's a massive problem... Given the brand name, we don't have any problem sourcing deals, but people don't want to deal with him because they know it's a waste of their time.
The organisation is extremely rigid and even if you source deals, they will be dismissed by the guys at the top.
Re VC, that's exactly what I have been doing for the past two years. I am advising on the side a number of tech entrepreneurs on many aspects and trying to build my creds book. I now sit on the board of an AI startup, so things are going in the right direction.
That's indeed something they are imposing me. Despite being Senior Associate / VP, I would be more than happy to join at the Associate level to secure a good job... Apparently, that's not the way things work in the UK.
Thanks for your help! Camondo
On the coasting boss and hierarchy part:
So that really sucks... but should the boss get canned, is there a good, assertive second in command that does have an investor mindset that would take his place and position the group for investment? It just seems weird, did I miss something or is this the conpany’s house money or a pension / SWF? Because otherwise you need to make investments to be able to raise again with existing or new investors going forward...
I’m assuming that if the guys at the top are also rigid, the above question probably means there is no one internal they plan to bring in that will shake things up. Everyone is in on the move to sit and collect...
If the fund is a big brand, but known for not doing deals, is there at least prior co-investors / funds you’ve dealt with that you can jump over to. Maybe have worked with other senior associates or VPs at other firms, Developed good rapport with and etc. Can you grab a coffee with those guys and see if there are openings there?
On the VC part:
Sounds like you’ve done a lot on your own in developing your reputation in the startup ecosystem and providing value add there. Can these startups give you some color on VC funds that are hiring and provide warm intros?
While the operating or direct startup experience would be useful, unless you’re playing a huge (maybe officer /exec) role within the startup that you join FT, I don’t know if doing an 18 month stint would better position you title wise at a VC shop vs now. I feel like whether you get something now directly, or 18 months from now at a startup, you’d still be a Sr Associate or maybe jr Principal / VP. Unlike PE, I think VCs are more forgiving of the lack of deals with your current firm since you’ve also proven your background in M&A, coupled with you being proactive in the community on your own. I think they will care more about whether you are willing and capable of developing your own relationships (which you are doing), and if you have a view on trends and an investment thesis (which you can research and develop, without having done deals).
On the PE recruiting and titles:
Thanks for the bat signal kanon, I missed this one somehow in my messages. Sorry Camondo for what could've been an earlier reply.
Can you help me understand why option #3 would lead to a hole in your resume? Why isn't it possible to conduct a search process while currently employed? It sounds like you ought to have the bandwidth given the lack of actual investment work you're facing.
I think #1 is out altogether. If you know your career interest is private market investing, you need to find another role in that field, especially given how far into your career you are at this point.
You're correct that #2 is one of the more common paths into venture. You usually need to stay two years to get the 'operator' stamp on your passport where funds think of you as having checked the box adequately. This can be trimmed shorter if the company is acquired or enters hypergrowth (e.g. raises three rounds and 10x's valuation within 18 months).
I'd advise against #4. All the times I've seen people pick entrepreneurship as their most attractive option out of a set of unappealing present alternatives, it goes poorly. Founders win when they're attacking a thing they feel so strongly about that doing anything else feels unnatural or like a crime. You don't exude that level of passion, so I can't recommend this path.
From a process of elimination we are left with #3, and coincidentally that's the one I think that makes most sense out of all to begin with.
You benefit from being in the UK where headhunters happily help candidates move around year-round. On this side of the pond things are way more structured: (a) there's an idea of 'cycle' where things happen at the same time every year, and (b) experienced hires tend to get stuck in an unfavorable loop of being off the beaten path for the formalized intake points.
You escape all that. If your resume is shipshape, there's no reason you can't be talking to the litany of placement consultancies who can help you move.
You can also run a process on your own. Sure, you lack a network of people who've transacted with you and could thus vouch for you given that you haven't closed any transactions, but there's nothing stopping you from reaching out to people over LinkedIn or your university alumni system or any other method to ask for a coffee.
Just note that you have to have several touchpoints with someone before you can ask them about possible opportunities at their shop; obviously no one will want to put in a word for someone they know nothing about.
If you're willing to take a longer-duration approach to moving, you can prove your merits in a hack-ier way by running a 'soft' deal process.
Reach out to people at funds you're interested in by asking about a company in their portfolio. Do work on it, ask all the questions and cover all the material you can. See if you can get a sense as to whether they're a fund that uses shelf legal docs for everything or spends dollars each and every time. If they're the former, go ahead and sign any document they put in front of you so you can actually look at the company you picked.
The point here is to impress them with how you handle yourself, such that in the near future (towards the holidays) you can mention how concerned you are with the direction your firm is heading and how you'd welcome a short chat about potential opportunities. (The reason I mentioned the legal thing is that some people will not look kindly on someone who makes them spend money knowing it won't go anywhere.)
If you've done 3-4 breakfast, lunch, or office meetings with people, you ought to know who's amenable to a conversation about possible opportunities. Likewise, if you've kicked the air on the tires of a hypothetical deal process (grabbed the hem of the skirt without actually picking it up to peek under) or actually entered one, someone should get a sense enough of what kind of process you run and what caliber professional you are ... which makes it equally clear whether you're both open to initiating a conversation.
Run an airtight process. Present yourself as affable, humble, and hardworking. When you get to the point where you'd have to pull the trigger, you can just head straight to them to say "Look, I know this makes a lot of sense to do and I'm frustrated that it's making no headway internally. This isn't the first time it's happened, but I had so much conviction on this one that I'm actually angry. I don't think this is a good way to do business. You guys have been ideal deal counterparts, I've been impressed with what I've learned about your platform. Is there any way I could explore an opportunity there?"
Assuming you've carried yourself well and the guy on the other end of the phone is a decent human, you've probably tapped into the empathetic part of their brain and should at least get a fair shot.
There's no getting around the fact that this sucks. You're deal-constipated, and it's not your fault, it's the dude above you who will neither shit nor get off the pot.
I encourage you to dedicate all your energy to getting to a good seat rather than taking a diagonal path farther away from your goal that you'll have to course-correct from in the future to get back to where you want to be.
Good luck.