Few years out of school -- PE jump without business school?
Hey all -- made a new account for anonymity. Thanks in advance for any thoughts.
Wondering what the best path forward is for me to get into private equity.
Here's the situation: went to semi-target undergrad, got into IB and stayed a little over a year. For the past three years I've been working in operating roles at startups (combo of strategic finance and product management). I also have lots of work experience building financial models for companies, M&A transactions, etc. outside of my IB and startup experience. It's a long story and might give me away so I don't want to get into the details, but I've built many models for management teams or live deals.
I've never technically been in a full-time buyside role but think I would really enjoy it. I don't mind working long hours and I like analytical work. Many of my friends did the IB -> PE route and what they tell me about screening, diligence, portco operations, etc. sounds like all things I would really enjoy.
I'm not going to pretend that I'll for sure be in a PE role my whole career but I'm also comfortable with going to something more low-key (corp dev) if I want to slow down later in my 30s. At the very least I'd like to try PE to see if it is something I'd like.
My question for the community would be about how to go about getting a buyside role without going to business school (or back into IB)? I live in a tier 2 finance city (LA / SF / Chicago) and have reason to stay. Telling my story / getting the "why PE?" question down will take a lot of work, but I have the technical chops to do it. I have a strong VC network but early stage VC isn't a space I want to be in long-term and I'm worried if I take a VC job it'll just push off getting a PE (or even growth equity) job until even later.
Any thoughts on how I should approach this? I'm guessing I'd slot in at the associate level but also know how demanding these are to get even with a good background (2 years IB). If I have to go back to IB or business school to make this happen I'm willing, but would ideally figure out a way around it.
(Edit: also happy to answer any questions about reasons why I'm doing this; now that I've gotten my taste of startups (cofounded 1 and worked at another) I have a lot less FOMO. Feel like I have a lot more clarity around next steps now, even if it takes a while.)
I think it would be helpful to understand your expectations about what type of firm you’d like to land at. With your experience in IB and strategic finance focus and modeling work at startups, I think you could be a competitive candidate for Associate roles, but it would likely be at a smaller LMM firm (sub ~$700M & maybe smaller). In tier 2 cities like Chicago, there will be plenty of less established firms willing to give you a shot. The further up market you go, it will become considerably tougher if not near impossible. Can’t tell from your post, but if you were in a well regarded banking group, that will also definitely help.
Appreciate the perspective, thanks. And yes I'd be targeting MM or LMM shops especially to start. I wouldn't expect an UMM to take someone who wasn't from 2 years IB or a PE lateral.
My advice would be to find a highly acquisitive PE-backed company and aim for a corporate development role. If you find one of these and do well; that will open many doors for you. Best of luck.
-PE Headhunter Mike
Great idea Mike, hadn't thought of that. Will add acquisitive sponsor-backed companies to the list.
What do you think the best way to find these would be? My process would include a combination of having conversations with PE folks + headhunters, in addition to going to PE funds websites and finding companies (sometimes they list their acquisitions) and cold reaching out to the corp dev team from there. Anything else you'd recommend?
That's a great place to start.
Another avenue to look at would be doing a Pitchbook search for PE backed companies in a target market, sort by # of acquisitions, make a list of partners on said deals and sending some emails/making phone calls.
IB + Finance/M&A/operating experience seems like a good background to get into PE. You will be an associate but maybe you can try and swag them that you have more experience than most so you'd expect a faster promotion timeline (much higher likelihood at a small firm with less strict guidelines and one that tends to promote from within and doesn't require b school).
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