Honest question: why do VC / growth equity firms recruit bankers?
I'm currently exploring IB recruitment– I don't have a target school on my resume but I have some relevant experience and a high GPA. Not interested in being a career banker but I could see myself doing something longer term in like an earlier stage investing role, something like VC or growth equity. I've been networking A LOT, and have completed like 20+ coffee chats with both bankers (mostly in tech / TMT related roles given this is what I'm targeting) as well as some folks in buy side roles I find interesting. Just using RecruiterBase to find these specific connections and contact info.
While I'm making decent connections, and can see a few of these turning into actionable recruitment opportunities, something has drastically stood out to me given what I've learned about these industries so far, as mentioned in this post title. During coffee chats, I like to actually learn about what the job function entails, which I generally have the chance to do after answering basic behavioral questions. It feels like, most folks in VC / growth equity do a LOT of sourcing (cold calling, emails, etc.), networking, and it seems like a deep understanding of technology, tech trends, and the "hottest" early startups is important for these roles. When I ask investors about what makes someone successful in growth investing or whatever, none of them mention anything about banking skills. Instead they talk about:
- Being able to spot the "next big thing" in tech before anyone else
- Understanding complex technical problems well enough to not get bullshitted by founders
- Being personable while sourcing deals and having genuine relationships with entrepreneurs (who let's be real, probably don't think ex-bankers are worth their time)
But when I ask bankers about their job, it's all abt working on financial models, perfecting PowerPoint slides, Excel shortcuts, process worth, etc. I get why megafunds, buyout PE shops, and corp dev teams would hire bankers, don't get me wrong. But how does the IB skillset translate to evaluating startups and VC / GE roles? I brought this up with a partner at a middle market growth equity fund a few days ago and he said "most ex-bankers we hire spend their first year unlearning everything from banking." Then why are they still the primary hiring pool? Is this just "how it's always been" and this disconnect is real indeed? I'm curious to get some insight here, because if IB actually doesn't prepare you for earlier stage roles, I might just try to break straight into growth equity or venture capital. Plz let me know what I'm missing.
If it ain't broke, don't fix it lol
You act as if spending time doing TMT banking doesn’t teach you anything about the sector. How could someone probe a potential investment without knowledge of later stage firms and the levers that may have to be pulled to get there? Also, considering companies like Microsoft and Oracle have tons of cash and frequently make acquisitions, it’s important that you have some idea of what they and other large companies or large software/tech PE firms are looking for when it comes to buyouts.
Didn't read all of it but big part of it is that it's like ordering a big mac - you know what you’re going to get. Bankers (and consultants) know ‘how to work’ and have the basics in place. A lot of the other stuff can be built on top
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