Considering a move from PE to VC
I'm currently a PE associate, previously did two years in IB. I'm not really enjoying PE and considering a move to VC / early stage growth. Long-term, I'm interested in moving over to join a start up or perhaps founding a business.
PE hasn't been all that I expected it to be and I'm a bit worried than VC / growth won't be any better, so would appreciate any thoughts on whether VC / growth sounds like a better fit for me.
The main things I'm looking for are better hours (ideally 50-60h on average), less nitty gritty 30 tab models with 10 different cases, more focus on commercial & market type work, less financial engineering and more operational involvement, and more a laidback start-up style culture.
My main concerns are that the lifestyle won't be a major improvement vs. PE, I don't necessarily have the skillset for VC (having gone IB -> buyout), I don't have a massive network, and I'm not sure if I could get a seat at a decent VC shop.
Thank you in advance for any responses
Hey there! It sounds like you're at a crossroads, and that's okay. It's important to find a career path that aligns with your interests and lifestyle preferences.
Based on the most helpful WSO content, here are some things to consider:
Work-Life Balance: In general, VC tends to have slightly better hours than PE. However, this can vary greatly from firm to firm. You'll almost always work at least 50 hours per week, but the majority of firms fall between 55-75 hours.
Work Style: VC tends to focus less on detailed financial models and more on market knowledge, networking, and sales. This could align well with your desire for more commercial and market type work.
Culture: VC firms often have a more laid-back culture compared to PE firms. However, this can also vary greatly from firm to firm.
Exit Opportunities: VC offers a variety of exit opportunities, including getting an MBA, joining or founding a startup, or moving into a corporate development role at a tech company.
Recruiting: VC firms recruit off-cycle and evaluate candidates based on their qualities more than their technical skills. This could be a potential challenge if you don't have a large network, but it's not insurmountable.
Remember, these are generalities and individual experiences can vary greatly. It might be helpful to reach out to people in the VC industry to get a better understanding of what the day-to-day work and culture is like. Good luck with your decision!
Sources: Private Equity vs Venture Capital - Differences and Similarities
I started my post MBA journey with a mid size RE Buyout Fund. Was super excited joining the big play putting all my financial knowledge to use - making model etc. I quickly realized that is something I dont wanna do. Doing excel masturbation was not something I wanted to do, also deal closure length was typically an year. In an year I was at an early stage VC (500 MM AUM). Here is what I felt:
1. Pay is incredibly low - I took a 50% pay cut to join. This can be offset if you join something like Accel, Sequoia, BVP etc
2. I had huge amount of time - I was working 50% less, I am able to enjoy my life, travel, couple of days at the football pitch etc
3. The deal cycle is very fast - in my first year I closed 4 Series A deals all with a different business model - I really found this mind stimulating
4. There is literally no finance required
5. In terms of learning - you actually dont learn anything tangible (but you learn a lot, you could talk about anything and everything)
6. Network - Since joining a VC my LinkedIn followers are now 2x, people would want to talk to you and you would want to talk to people
Hope this helps
Peace!!
Thanks so much, this is incredibly helpful! Sounds like you were in a similar position to me and that VC has worked out well for you.
Couple of follow up questions if you don’t mind:
Thanks again, really appreciate you taking the time to respond!
To your follow up questions:
1. For me it was the right decision as my PE experience would not have added any value if I wanted to be a VC. If you are at cross over fund investing in tech businesses you might want to hold off for another year, close a couple of transactions in that time.
2. Until and unless you are very unlucky, the work hours, no formals and chill environment is the case across in Asia, not sure about other regions but it should be similar
3. Sourcing - I was privileged enough to come from top 3 engineering and B schools in India, so my base was set. To add on I just schedule random catchups with other associates or analysts attend events and once people know you in your sector, deal flow to your inbox is quite thick. Takes around an year or two of conscious networking efforts
4. 3 months before my final day at my PE firm I started reaching out to various funds - your best bet is the VPs, as for hiring analysts and associates are rather useless. Job platforms like LinkedIn arent very helpful. Recruiters like Michael Page and Native are quite active. Having said that all the interviews I gave for an early stage fund were through my reach out or network
Peace!!
Super helpful, thank you again for all the insight!
Hi, hope all is well! I am currently in the same situation. Went into PE staight after my masters degree and after 3 years left my job in January to travel. Now starting to look for opps and I think VC may be more fitting for me, I felt the same in terms of the various aspects you mentioned (social/deal cycle/modeling/operational involvement/hours). Was wandering if you had made the transition already and if you have any additional advice on job research and interview prep?
Thank you!
No wonder VCs are losing their shirts now that money isn’t free lol
Going from PE to VC is doable but can be tough because it's just vastly different unless you go to those large growth buyout (TA, GA) type of shops.
I'd challenge a bit the above poster. If you work in sourcing heavy shop for 1-2 years then I'm sure it can feel like you don't need finance and don't learn much. We lead rounds and typically spend ~6 months on a deal before closing. We do ton of dd before even issuing term sheet. Venture investing is still investing which makes it like any other finance job (modelling, valuations, structuring...) - it's just more social. You'll build the network over time. Being in VC gives you an excuse to speak with anyone and you gotta enjoy that.
Lifestyle is much much better and yes you'll get to work 50-60h easily on average with polos and Allbirds at office, but it does come with a hit on the comp. Although base is often roughly the same, 50% bonuses are not unheard of unless you're in names mentioned above. Still, career longevity in VC is probably better than in PE because people don't get burnt out.
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