Success as a new PE VP?
Hey everyone, long time lurker but first time poster here.
I’m a recent MBA grad joining an UMM fund in about a month and am a bit nervous about making the transition. I was a solidly middle bucket (maybe top 40%) associate at my previous firm and am generally pretty good at the modeling / analysis / slide creation portion of the job.
My old firm was very regimented / hierarchical though so didn’t have too much exposure to the actual “deal QB” part of the job. I know the basics of all the key third party diligence streams in broad strokes, but I’ve never been the guy actually in charge of getting all that done. The culture also lent itself to an expectation that associates sat and take notes, so I don’t have a lot of experience leading calls and meetings either.
Lastly, I’m making a significant shift in deal size. My previous firm was squarely MM / LMM (<$100MM checks in companies with <$30MM in EBITDA) while the new fund is a large UMM that can write $1Bn checks. I’m not sure how different the jobs actually are, but I’d appreciate some perspectives on how the deal process varies at different sizes.
What’s the best way to come into my new job and be successful from the beginning? I know there’ll be a steep learning curve (plus shaking off the general business school rust) but are there resources I should be using in the interim or things I can do from the start to be helpful right away? I just don’t want to be way behind from the beginning, create a bad impression, and then never have the opportunity to make up for it down the line.
I’m sure there are a lot of other things I’m not thinking of too. Thanks everyone for reading and appreciate all the experience and advice on here.
1. Don't come in acting like you're too good for excel / powerpoint - first year at least you should be 'side by side' (to some degree) with your associate / senior associate
2. Depending on the shop, you need to have real perspectives on the deal - you'll find that it's easier to say why deals are good than why deals are bad. Learn to do the latter.
3. The post-MBA role becomes increasingly about internal relationship management and visibility. Work on your communication style and be smart about finding mentors / sponsors and people who will have your back. Every IC meeting, every diligence call, every management presentation will start creating an impression of how competent you are and whether you are "partner material"
4. None of this is rocket-science. However, you will see that luck overall plays the largest role in your career at this point. You can be a mediocre VP but get staffed on the right deals, with the right people at the right fund and come out looking like a genius. Or you can be an amazing VP but get staffed on the wrong deal / team / or the wrong fund and none of it will be matter. Point is - just focus on what you can control with the knowledge that many elements of your trajectory will not be controllable.
As someone who was promoted to VP at the start of the year, here are some reflections / advice that I have:
1. Taking real ownership of your deals and portcos. As an associate, you care because you're staffed on them and you want to get your work done timely and accurately, but you're not reaaaally the one that is doing the majority of the work that comes with caring. As a VP, I've found that although my workload has decreased slightly in terms of grunt work, I am constantly thinking about my deals and portcos as if I was personally responsible for their success (which in some aspects I am...and if they do well then obviously that's reflected in carry + bonus, and I don't want to put my management teams in a position where they can't succeed). What this means is that I am thinking of ways that I can help add value, thinking about relationships that I can refer, helping with analysis, staying on constant dialogue with the c-suite, etc.
2. Leadership and communication. As an associate, you're only managing upwards and you're pretty much at the mercy of everyone that outranks you on the deal team. As a VP, you have to manage up AND down. What happens if you're staffed with a crappy associate? What if you realize you're a great analytical person but have zero leadership skills and can't communicate what you expect from your juniors? What I've found that's helped is building a relationship early with juniors below me, and also setting expectations that I won't create false deadlines, but I will be stern with expecting good work product on a timely manner. I've also communicated that there's less room for error in PE; in banking, you have multiple layers of hierarchy and sets of eyes on every single piece of material. In PE, especially a smaller shop, I may be the only person that's checking work. And if I am busy, I may miss some things. I need to have the Associate make sure that everything they do is thoughtful and intentional before sending across to me. And then if they have a question or want to discuss anything, that I am always willing to chat and talk about the deal. I also try to provide advice and mentoring (both deal wise and general advice) so they don't feel like they're just a Task Rabbit. I think this builds an aligned relationship.
3. Managing the MDs/Partners. This is probably even more important than #2. In my experience, the MDs and partners want to clearly see that you are being thoughtful around your projects and that you have a very solid grasp of every thing that's going on. So what this means is that you NEED to know everything that's going on. For example, the CFO of a portco casually mentioned that April actuals were down 15% relative to budget but said everything's fine? Everything may not be fine. Call them up afterwards and really dig into what's causing this so you (1) know what's going on, and (2) what are the steps that are being taken to course correct. Oh we're down 15% because we lost 5 truck drivers and weren't able to temporarily service some contracts? Well have we replaced those drivers? No? Why not? Oh the labor market is tough? How are you guys planning on adapting your recruiting strategy? Perhaps creating a referral program so your existing drivers can help be your best recruiter? It's things like this that help you REALLY know your stuff. And when you know your stuff, you're automatically more confident. The worst thing that can happen is if your partner asks you "oh so we're down 15%? How come?" and you have no idea how to answer and your associate also flounders because you didn't give them any direction because you weren't proactive.
4. Building internal and external relationships. As a VP, you're no longer the rookie in the building. You're a starter. Perhaps you're the star QB. Act like one. Make sure to build relationships with everyone in your firm, including the controller, CFO, biz dev, operating partners, etc. Don't be the neurotic tunnel-vision finance guy that can't look up from their deals. Additionally, it will be important for you to start building out your own rolodex. Start reaching out your connections (i.e. bankers, lawyers, industry relationships, etc.). You'll never know when a deal will be passed along to you and the more touch points you have with people, the more likely they'll be thinking of you. Don't be that guy at the firm that's really good at deals and keeps getting promoted, and then one day wakes up as a 38-year old principal with zero meaningful industry relationships because they only cared about themselves. Go to conferences. Connect your connections - link people together. It makes a world of difference in the long-run.
As someone gearing up to make VP promotion a reality, this is a great resource. Thanks for writing this up!
Interested as well. In a very similar situation as OP and glad someone asked this- for what it’s worth, after talking to a lot of classmates I think it’s normal to feel nervous stepping into the VP role especially at a new firm.
Replies so far have been super helpful, curious if anyone has other thoughts.
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