URGENT: Take offer at Insight or UMM fund?
I have an Associate offer at Insight and an UMM (e.g., Genstar, Golden Gate, Berkshire, Francisco Partners, etc.). I want to know which decision will help me with my goals:
Assuming top grades and GMAT/LSAT scores, I want to do an H/S JD/MBA. I'd like to ultimately end up in some form of large cap PE because I want the money that a long career in the space brings (I have my reasons). However, I am unsure about what comp looks like at a long career in Insight, and I suspect the lifestyle is a bit better, and I am unsure about JD/MBA placement, so I am asking for your advice. I'd like to be a good dad one day and so I wonder if the marginal lifestyle benefit of Insight will help. I also wonder if I'll be more involved building companies.
Insight pros:
* Interesting work that dovetails with my background, am proficient in non-GAAP software modeling
* Good lifestyle as far as I can tell
* In NYC where I want to be long term (this is big)
* Unsure of current cash comp (just got offer, waiting for docs)
Insight cons:
* Unsure of long term comp of being at a place like Insight
* I dislike ambiguity in my deals
* Unsure if I can move to UMM / MF PE down the line (if I decide I want to)
* Unsure of bschool prospects
UMM pros:
* Consistent H/S placement
* I like complexity in my deals
* Long term compensation trajectory of staying in large cap
* Prestige feels good as I have had a chip on my back for a while (no target undergrad, no super prestigious previous company) and for once want to feel good about my institution
UMM cons:
* Banking culture or worse hours
* New city may be hard on engagement
In general, one feels like a known quantity (UMM) and the other does not. Let me know what you think.
What is a notarget BB? Both Insight and any UMM will get you far. Insight has also been moving more towards late stage venture and buyout lately
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First off, congrats on the offers. Both Insight and the Genstar/GGC/Berkshire/Francisco Partners grouping are excellent shops, so well done!
The biggest difference here will be industry focus and rigor of diligence. The poster above is right that Insight is moving more into late-stage venture and growth, Evidence enough by the fact they changed their name from "Insight Venture Partners" to "Insight Partners"; but all the Partners made their money in Venture and they'll likely apply that lens of investing to future deals. This means a focus on tech almost exclusively, and a more entrepreneurial approach to deal sourcing (read: You'll be going to industry conferences and spending at least some of your time sourcing deals yourself). At the UMM you could be working on deals in non-tech, won't really be involved in deal sourcing, and instead will use that extra time to get even deeper in the financials of an asset. Also, since the UMM will invest in more mature companies, the standard of detail in the diligence will have to be a bit more rigorous simply because you'll have more data (industry, company, etc) to dig into.
One other thing to note is Insight is fairly anti-MBA. They promote Associates straight to VP without the MBA, and the culture generally still holds the VC mindset that and MBA is unnecessary. That said, if you want to go to B School placement will be very good into H/S and W as a backup, but that will probably kill your chances of going back to Insight after and you likely won't get much support while applying. I'd say your chances of H/S are likely pretty similar from Insight vs. the UMM, the UMM will probably just help you a bit more with the application process.
As for long term career trajectory, I have seen guys leave Insight for growth funds like General Atlantic, and you could probably have a shot at top tech-focused LBO funds like Vista or Thoma Bravo. I think you could definitely get into LBO PE, but it would have to be tech-focused.
TLDR; Personal considerations aside (I can't tell you how much to value NYC or comp), the decision is really about whether you want to focus on late-venture/growth and tech, or more traditional LBOs across industries. Both are fantastic, prestigious options that will pay you plenty of money and help you get into a top grad school.
ALSO - it's tough to address your thoughts on the UMM without knowing which firm. I have a number of friends/contacts at these firms (and their peers) so feel free to PM me if you want an honest, private take!
Out of curiosity, why would anyone ever even consider paying for a b-school degree that would otherwise have the VP offer at a firm they were getting a good experience at (nevermind compensation)?
Pedigree ain't worth a million bucks (in total opportunity and real cost, this is a pretty realistic number).
If your idea is to spend ~$400-$500k on a 3 year joint degree program because "I want the money that a long career in the space makes", your thinking is way off (and frankly completely backwards) here, and I can assure you that will be an unsustainable way of achieving that goal. For the guys that make a lot of money in private equity, "a lot of money" and "pedigree" is a symptom of their career motivations, not a motivation itself.
If the chip on your shoulder is what's motivating your desire to become a pedigreed rich guy, get over it. Clearly you have made it past the insecurities about your background it seems you're harboring on paper; if you let them harbor on you emotionally, they will likely cause you to make suboptimal career (and life) decisions.
Agreed the JD aspect of the JD/MBA doesn't make much sense if you want to stay in PE, but doesn't the MBA at least provide some value vs. staying for direct promote to VP? Given OP is from a non-target undergrad, doesn't the brand of HBS/GSB plus the network that comes with it increase his odds of being able to source good deals, raise capital, and hire juniors later in his investing career? You're more experienced than I am so genuinely interested in your take
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Feel free to PM me as well.
B-School placement varies by PE firm. There are some MM/UMMs that have exceptionally high acceptance rates into HBS / GSB, and some funds are much more inclined to help with your application than others.
Any insight into which particular non-MFs have high H/S acceptance? Unfortunately for us WSO folk, my understanding is that they're usually the consultant-friendly ones like Berkshire.
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I was in similar shoes a couple years ago. Happy to provide something thoughts based on my experience working in late stage growth (I'm currently at the growth arm of a MF and will outline a few of my thought processes when I chose growth over buyout PE). Note I cover exclusively tech (software + consumer) so this may or may not apply to Healthcare tech, impact, etc. Final caveat - I have NOT worked in buyout PE so will comment exclusively on growth (but am actively interviewing for buyout funds)
Growth Pros: - You work with companies everyone in your industry (or even the general layman) will have heard of. This was big for me and probably >30% of why I picked growth. I personally wanted to work with companies that people would recognize. This element of prestige has paid huge dividends for me and my career, and based on my more senior associates, will likely help me in B school apps as well. I simply wasn't interested in potentially being staffed on a LBO of a random industrials company. I was a CS major before joining banking, so it wasn't my cup of tea - but YMMV. - You take minority stakes, meaning you get to diversify your portfolio a lot more than a buyout firm would. I'm currently involved in 10+ portfolio companies at either the board observer level or very actively supporting the management team on market research, competitor analysis, KPI benchmarking, etc. and love being able to delve into a variety of different business models. This also broadens my network in ways I didn't even think of when I first joined. - You are rewarded for knowing product and how to push a company who's at an inflection point to a market leader. In growth, you are betting on strong business models that need that extra firepower to grow internationally, build more modules on top of an existing SaaS platform, build out inside sales team, etc. Knowing how the tech operates goes a long way towards 1) connecting with the management team and getting them comfortable in taking your $$ and 2) building your expertise in the industry and conviction on what products will be successful. You don't want to come off as another finance hardo investor - you want to come off as a polished investor that knows the challenges tech entrepreneurs and their products face in their market. This is not easy to do.
Growth Cons: - You take minority stakes. While also a pro, the downside here is you do not have full control over the operations of the business. You can steer the ship, but you can't drive it. This can be VERY frustrating at times, especially when an investment doesn't pan out the way your model envisioned it would - We don't typically deal with debt (not a growth lending shop) unless obviously when we are involved in a growth buyout. This means transition to a buyout shop down the road (if you for some reason dislike growth) will be harder. At Insight they do both buyout and growth so this probably wouldn't apply in your case. Look at the recent $5bn buyout of Veeam.
I'd also like to highlight some misconceptions on growth because for some reason there doesn't seem to be lots of information on growth in this forum
Misconception #1: Modeling and Diligence is not as rigorous in growth - This could be true at some shops, but trust me when you are contemplating a $400M equity check for Airbnb/Uber, the model is going to be as complicated as it gets, with country and region models, modeling out unit economics and how they change over time for micro mobility, rides, eats, etc. then layering on top add-on M&A, consumer behavioral changes, etc.)
Misconception #2: You source all day - I do no sourcing. Yes you heard that right... This is highly shop dependent (at Summit and TA for example the sourcing is going to be heavy).
Misconception #3: Pay is lower than buyout - I get compensated in line with my buyout peers
Misconception #4: Lifestyle is good - I work ~65-70 hours a week. Not as bad as banking, but still not great...
Finally, I want to comment that while growth equity is a great gig, it takes a certain type of individual to be really good at it. There will inevitably be more high level thinking than the pure processing you do at LBO shops. I don't think growth is a long-term thing for me either, but I definitely do feel that it was a strong learning experience.
Anyways, sorry for the long post. Hope this is helpful.
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At the risk of sounding biased, I'm going to provide a very honest view here.
1.) If you like tech, this is a no-brainer in my book. Insight has really transformed itself from a pure VC player into a shop that does everything from VC to growth to buyout. I can name off the top of my head some really solid buyout deals they've done (Veeam, Diligent Software, Turnitin, Armis) in the tech space. I have no clue how deals are staffed at Insight, but what I've heard is that they do not segment their teams like MFs do (so the same investment team does all types of deals). The experience here will be broad, and it will give you the opportunity to work with some of the top tech companies in the world.
The only name on your UMM PE list I would take over Insight is Francisco. They are also a beast in tech. The rest are obviously all solid names and occasionally do tech deals, but they simply aren't in the same stratosphere as Francisco and Insight at the moment in tech.
2.) If you don't like tech, then I think it's more of a toss up. I would probably look at the deals each firm as done and think about whether you would've enjoyed working on it. Would refer to the other posters on the pros/cons of generalist buyout PE as I am not as experienced here.
As someone going into bb tech banking..this really really draws me to growth. Just curious, what are some thing growth investors who leave the industry typically do? I assume you can move down market to earlier stage vc?
This was awesome. Thanks for posting.
I will say that I wanted so badly to tell you LBO groups (especially at a MF like mine) don't just do pure processing but the reality is that all diligence I do is expected to directly feed into the model somehow and is used to help the principals / partners augment their decisions with relevant deal data. You're still a numbers / processing guy who is expected to give his view on something at any time but never gets the chance sometimes due to the sheer volume of work. Glad to hear your experience is more multifaceted.
Also curious, how deep is your diligence in terms of getting data from both the targetco and external sources (in Airbnbs case if there is a database which tracks bookings or something of the sort) and then using that to look at open vs. closed channel which may not be recorded on such databases based on targetco-provided bookings being higher than the database bookings pertaining to the targetco. Not sure if clear or not but just curious how much of inference type of work is required from your role to help substantiate target data. Let me know if needing clarification. This was something I initially struggled with so wonderin
Assuming your at the Associate level, do you know how much different the Analyst experience is at the MF Growth arms and the Insight/GA types? I'm very interested growth out of undergrad, but a bit concerned about the sourcing-heavy focus for Analysts. I don't mind sourcing personally, but would rather do the traditional IB route and then break in at the associate level if I will be doing 100% cold-calling. Would really appreciate your insights!
Sourcing is a big part of the job even as an associate. This holds true from VC to growth, so you won’t really “skip” sourcing by coming in as an associate. Something to keep in mind.
Random tangent but how does Insight break up their teams? It seems like they have their "Investment Team" and then "Insight Onsite".
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