Growth Equity vs. Investment Banking for Undergrads - Thoughts?
What are the pros/cons of interning and potentially starting a career in growth equity at a place like GA, TA, Insight, Summit vs. one of the larger investment banks?
Any word on what next steps from growth equity internships can look like?
The biggest drawback to taking GE is that your optionality becomes incredibly limited. I interned at a growth shop (not one of the ones mentioned), and found the biggest drawbacks to be an overemphasis on sourcing, and a lack of proper training. I love growth equity as an investment model, but hated my internship because of the bullshit work that growth shops make analysts do, and the difficulty I faced moving into more technical roles for FT.
So many growth shops take analysts to be cold-calling machines. Basically, you'll reach out to thousands of companies per year, and once they indicate interest you then push them up to an Associate/VP who takes over the modeling and diligence. Even if you're at a shop where you get to work on the modeling, it's inherently quite limited in growth equity, and valuations are based primarily off of comps and whatever random multipled the Partner on the deal team decides on. To summarize, technical experience = basically none.
Beyond that, it's so much more difficult to move to banking or traditional PE after starting in growth. After interning in growth and realizing I had no interest in doing cold-calls for the first two years of my career, I planned to move into IB. Now, I came from a target, had a good background/gpa, and networked my ass off (literally every waking minute when I wasn't at the office, and even sometimes when I was at the office lol). Even then, it was unbelievably difficult to get into banking FT. After an absurd amount of networking, I managed to land some interviews and super days, but I attribute that mainly to my target background tbh.
To summarize, a Growth Equity internship will provide very few hard skills and will largely close doors for your FT recruitment, beyond other growth shops, VC, and tech. If you want to get into growth in the future, tech IB, tech consulting, or MM PE is a great way to do that without limiting your optionality.
Feel free to PM me if you have more questions. Happy to help and shed light on my experience.