Growth Equity Questions

• How does recruiting for GE change when you are recruiting for an analyst / SA position?: For most of these type of GE firms, associate is the entry-level position and so there isn't a chance to get in pre-banking/consulting. For the GE firms that have analyst programs, I would take my same advice above but lean a lot more qualitative in your preparations. You won't have completed rigorous IB training so they won't give you ridiculous model tests. They will want to know if you understand and are deeply interested in the industry, if you understand how investment theses work, if you understand the macro backdrop that is affecting this asset class, if you have excelled in school and other areas that prove you are a high performer. For a FT analyst role, I'd bet they will dig deep into your junior internship to see how you performed and if you have relevant experience. I'm sure it differs drastically from program to program though.
•   How do you get better at pitching investments?: This goes hand-in-hand with your qualitative investing skills. For me, this was by and large the strongest element of my candidacy so I'm happy to share what I did to prep. Last bullet is an actual practice you can try
  • Understand the elements of an investment thesis: This is more of a muscle than a check-the-box piece of knowledge that you learn. Sure, you can memorize the most important 10-15 components of a thesis, but you actually need to spend time understanding why they are important and log reps analyzing deals yourself. This could mean anything from studying second-hand investment thesis from other investors, to actually taking a stab at writing a thesis. I'll give a step-by-step below on how to practice formulating an investment thesis
  • Case Competitions: I realize this isn't available for everyone but throughout undergrad I competed in 4-5 PE/VC case competitions where you build a 10-15 page presentation with analysis and investment recommendation on a given opportunity. Usually took ~1-2 weeks and lots of committed time but this helped me tremendously as I got reps at modeling, making investment theses, performing research, and articulating ideas into compelling slides. Even if your school doesn't do these, I'm fairly sure there are public VC competitions or online cases you can find to practice.
  • Practice Analyzing Investments (quick outline): You can perform the below steps at any level of depth that you find appropriate. Obviously, the deeper you go, the more you will know and the easier it will stick in your memory. Feel free to google a million different methods of performing this, but this is what worked for me.
    1. Choose a company in an industry in which you are interested. This is important because if you are like me, you have limited mental bandwidth for memorizing endless facts, and if you are able to kill 4 birds with one stone you definitely should. My senior year I did a really deep investment thesis on a software startup in a cutting-edge space and for the next ~2 years of interviews I was able to make myself sound much smarter than I actually was when I got asked, "what is a tech sector that you are interested in?" or "what is a company that you have been following lately?". I was smarter in this niche space than 98% of my interviewers and it absolutely helped me secure my banking and PE offers. If you don't have access to private company financials, I would just choose a recently IPO'd public company as there will be ample data available. If you are gunning for private investing roles, choose an applicable private company but just understand that you will have limited financial visibility
    2. Goes without saying but research the company and make sure you know what they do, what products they offer, who they sell to, and read any recent news on them
    3. Start with a high-level outline (I prefer a triple T-chart) to sort elements of investment into three columns for "Good", "Bad", or "Needs Follow-Up". This ends up being the outline that you base all of your analysis on and will feed into your headline "thesis". This will also help you organize your thoughts to give your 30 second opinion on any given investment. For example, a company may have a strong growth profile, strong management team, and poor margins, but the competitive moat is unclear/unknown so you would need to do deeper diligence on it. You would note those in the corresponding columns so you can visualize things. The third bucket is also helpful in prepping for interview case studies because almost all interviewers will ask you the follow-up question "what would you look into if you had more time to diligence the company?" and you can use it as a quick cop-out if you didn't have time to analyze a certain element of the company
    4. Quickly decide the severity of how good/bad the core elements of the investment are after you have sorted them. I.e., are there any deal killers right off the bat that would deter you from investing? Are there any elements that are so great that you are willing to sacrifice in other areas? Spend most of your time understanding these elements. This is also good practice for real investing roles as it doesn't make sense to build an incredibly complex financial model if there is huge customer concentration risk that is an automatic non-starter for your investment committee
    5. Round out the thesis by having a high-level opinion on every element of the investment. I'm going to throw out a list below off the top of my head, but you can google a million things to look for in an investment
       • Market size, market headwinds / tailwinds, market saturation, competitive landscape, moat of differentiation, product-market fit, technological advantages, strength of management team, financial profile, customer growth, customer concentration, customer retention, sales efficiency, exit outlook (M&A/IPO), deal dynamics (this is a fictional scenario so just imagine what terms you would accept) 
    6. Pull it all together into a cohesive thesis from a high level. Formulate an opinion on how excited you would be for this investment, 1= not excited, 5=you would jump at any opportunity to invest, 3= you would potentially invest but there are elements of the deal/valuation that you would need to gain comfort around first. If you wouldn't invest, try thinking of what would need to change for you to become comfortable. Practice vocalizing your thesis in 30-60 seconds. Prep for potential follow-up questions
    7. Compare your thesis to other investors and see if you missed anything or should thing about things differently. There are always 100 different opinions on the same company. I would avoid doing this step first as it takes away from the learning opportunity

"What sort of firms would fit in the former category of funds?"

Honestly a lot of firms can label themselves "Growthy Buyout". To me this isn't really growth equity, but tons of reputable funds have it plastered on their websites so can I really argue? Usually, it's either pureplay LMM private equity that buys high growth businesses or funds that make minority and majority investments. Some other common characteristics are:

• Uses little or no debt
• Focuses on founder-owned businesses or companies that have essentially bootstrapped or avoided VC money 
• Focuses on high-growth industries
• Targets companies at significant inflection points in order to aid in growth
• Has some specialty value add operations / consulting element to help the companies grow 

Would experience in the tech industry help land (and potentially make up for not doing a banking stint)?

Not 100% sure on this tbh. Maybe if you worked at a similar type of company and have some deep experience in the space. Or if you did something adjacent like corp dev or strategic finance. You can LinkedIn stalk the associates at Summit Partners and Mainsail and see if any of them started in tech but I kind of doubt it.