Growth Equity Analyst vs. IB Analyst Programs
I find myself in the pretty fortunate position of choosing between a smaller growth equity firm and a top IB (GS/MS/JPM) for full time. Would be great to get some input on how I should be thinking about this decision as I have a deadline coming up soon from one of the firms.
A few things that I'm weighing as parts of this decision:
- I've had experience doing an internship in growth at another firm before and generally like the space, sourcing work, and investing in software. Have not experienced many other sectors though so admittedly my knowledge is limited.
- The growth firm I have an offer from is probably known within its space but by no means a brand name, around 1 billion AUM.
- My IB offer is not in a TMT or tech group but still in a respected group with good exits for analysts and associates.
- Growth offer pays considerably less than the IB one would.
- My technical skills aren't that solid so typical IB training is appealing.
I am really divided on this and was asking a few older mentors who have done both growth and IB what they think. There are a lot of conflicting opinions and people seem to take both sides of the argument. Any advice is appreciated.
Bump
Generally, if you are committed to a career in growth/VC I would take the growth offer. If you want to preserve optionality, go for IB.
Joining a growth firm full time and went through a similar decision node. Feel free to DM.
Thanks - do you mind if I ask if your growth firm is on the larger side (GA/Insight/Summit) or one of the smaller upcoming shops?
Obviously a lot depends on the type of growth program you are going into, as there is a lot of variation among the $1-2B AUM growth analyst programs, with some offering better training than others. At a high-level, network-building and training an investor mindset are what stood out to me versus an investment banking program where you learn a more technical skillset, which I feel can be self-taught and is commoditized.
I started in one of these sourcing programs and am now fairly senior at a growth fund, from your description it sounds somewhere in between a Silversmith and an M33 in terms of size. Did take it over a banking offer and don't regret it / learned a ton, but will offer you a few pros & caveats to chew on.
Pros:
1/ if you invest the time and are self-aware, your soft skills and business acumen can massively outpace anything in banking / consulting. Even the best junior banking / consulting roles are somewhat limited in terms of senior client exposure, vs. your job is to build relationships (not just harass) with CEOs and be the face of the firm. That was awesome to me and is still the foundation of my career today
2/ Similarly, if you think of yourself as an investor vs. BD analyst, you'll build reps thinking through why a business is interesting several orders beyond just 'large growing TAM' etc. Simply put, you talk to 500 CEOs a year and assess their businesses, hopefully digging in-depth on some data as well. That can be world-class training if you want to stay in growth, move to venture, lead a software company, etc. and is a unique experience few people actually have
3/ more intangible, but I do think the 'sourcing mindset' tends to train (or sharpen) go-getters who really take charge of their careers and realize thoughtful persistence and grit can get them pretty much anywhere. It's a limited sample set, but most of the analysts I knew from my vintage ended up as pretty successful startup operators themselves or partners at interesting shops
Cons:
1/ while it might be awesome, it's a unique skillset and most professionals outside of growth don't necessarily have brand name recognition outside of a few firms. So if it's a coin toss whether you'd want to end up in growth vs. PE, HF, corp dev, etc. then take the banking offer and don't look back. It's a known entity and there's a reason it's so.
2/ Secondly, I'd talk to both former (emphasis on former) and current analysts to get the real scoop on culture and training. If you're at a place that manages you like a sales rep and only that (heavy emphasis on outbound quota, 90%+ sourcing, etc.) it's not an immediate no-go, but it's likely a program with higher turnover and you need to have even higher conviction that growth/venture is what you want to do
3/ Lastly, you mentioned comp - if it's a small difference no sweat, but generally firms that give you the 'family' pitch as justification for significantly lower comp are generally not places you want to work. Fundamentally, if a firm is unwilling to pay market it's likely indicative of their view on junior staff overall which permeates into culture
Really great overview, thanks for taking the time to write it out. Your guess on the size of the fund is pretty accurate.
I do feel quite confident I want to pursue growth, but on top of that, I do have a couple more questions.
1. Did you stay at the same growth fund you initially joined? And if not, was it difficult to lateral and move to other funds?
2. The analyst program I would be joining is only a few years old, and it is a largely (90% as you said) sourcing role, with the chance to do diligence work on investments you source. Did you get a good mix of sourcing and diligence in your analyst experience or was it more one sided?
Thanks, glad to hear
1/ Did switch firms as most people end up doing at some point. Generally speaking if you're at a place that's a known entity within growth equity proper, you'll get the look and the rest is up to you to execute. Moving to venture / late-stage venture can be a different animal, most good funds hire episodically but if you look around you'll see growth analysts well represented at many of the good venture firms. Many of these firms have at least 1 or 2 mid-2000s Summit / TA juniors. Either have to be persistent or be in the right place right time
2/ You should get deal reps if you do a good job on the sourcing front. Doesn't mean you'll close a deal in your time there, but ideally get to late stage processes in a few and be able to talk about them
Really helpful again. Can't thank you enough for this.
One last question - I don't have the opportunity to join a really big firm like TA or Summit, but could I get your thoughts on some firms and any insight on them and their analyst programs?
I looked at Radian, PeakSpan, Long Ridge, and Level Equity. I go to school in the midwest but have wanted to move to New York for a long time so only looked at these and a few more when recruiting out of IB.
All firms that are known entities. I'd consider most of them 'early growth' in the sense that they'll look at businesses sub-$10m ARR (sometimes even sub $5m) vs. the TA / Summits of the world that are really backing $20m, $30m+ ARR businesses today that look more like PE deals. So think working on ~$30m minority deals that may look venture-esque but with better capital-efficiency / lower-growth, or tiny buyouts (<$100m EV) more akin to LMM PE.
Don't know each of the analyst programs that well but anecdotally, PeakSpan is a bit newer/smaller so will probably be flatter with more room for analysts to play up. Radian is a similar vintage as well (Fund III), they were the 'growth equity' guys that spun out of Bain Cap Ventures. Level was originally an Insight spinout and so wouldn't be surprised if some of the DNA is retained (sourcing-heavy culture, but eat what you kill). They have a pretty interesting structured equity fund too that has done some good/creative deals. Long Ridge if you really like fintech and want to do deals with funkier business models that aren't your typical down the fairway SaaS. All in all, will be fine any of these places and have the opportunity to move if you do a good job / network.
Hey, understand this is new but am in a similar position. Have you decided yet where you're heading?
Hey, so something I noticed is people in growth tend to be very pro starting in growth, while everyone else who did banking and pretty much everyone who was in buyout PE or one of the big growth shops recommended doing IB. From everything I understand you need to be comfortable being in the bootstrapped software investing space indefinitely if you start on this path. I decided I was gonna stick with my IB offer to start because the fund I had an offer from was an emerging manager rather than a bigger more established one. I also don't wanna close the door on a lot of other fields (large cap PE, hedge funds, corp dev, top growth) so it just makes sense.
Would also say that if you're willing to share firm or at least geography / AUM would be able to give better advice.
wondering if is it possible to rerecruit full-time into ib from a summer at a GE fund?
Likely depends on the fund. If its a top fund like Insight or GA, much more likely than one of the much smaller ones where all you do over the summer is sourcing.
got it so it would just be more difficult coming from a smaller fund?
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