How to rank growth equity shops

When evaluating growth equity opportunities, here’s how you can approach ranking firms and assessing roles based on the most helpful WSO content:

1. Ranking Growth Equity Shops

• Tier 1 Firms: These are typically the pure-play growth equity firms with strong track records, clear focus, and prestige. Examples include General Atlantic (GA), Insight Partners, and Summit Partners. These firms are highly regarded for their deal execution and value creation capabilities.
• Tier 2 Firms: Growth equity arms of major buyout firms, such as KKR Growth or TPG Growth. While they benefit from the parent firm's resources, they may not have the same level of focus or track record as pure-play growth equity firms.
• Tier 3 Firms: Smaller or less established growth equity players, or those with a more niche focus. These can still be great opportunities, especially if they align with your career goals and offer strong internal promotion paths.

2. Key Factors to Consider

• Deal Execution and Value Creation: Look for firms that emphasize both aspects. Pure-play growth equity firms often excel here, but some "growth buyout" teams like H.I.G.'s Advantage Buyout team can also offer a mix of these experiences.
• Internal Promotions: Research the firm's track record of promoting internally. Firms with a history of developing talent and offering clear career progression are ideal for long-term growth.
• Geographic Preference: For the Bay Area/SF, focus on firms with a strong presence in the region. Many top-tier growth equity firms have offices there, but also consider middle-market players with a regional focus.
• Culture and Fit: Speak with current and former employees to gauge the firm's culture, mentorship opportunities, and team dynamics.

3. Compensation Expectations

• At the VP or Senior Associate level, compensation in growth equity can vary widely based on the firm's size, prestige, and location. Generally:
  • Base Salary: $150K–$250K+
  • Bonus: 50%–100%+ of base salary
  • Carry: This becomes more significant at the VP level and above. The amount and structure of carry can vary greatly, so it's worth discussing during the interview process.

4. Additional Considerations

• Sourcing Component: Many growth equity roles, even those labeled as "full-stack," include a sourcing element. Ensure you're comfortable with this aspect and understand how much of your time will be spent on sourcing versus execution and value creation.
• Lower Middle Market and Middle Market Buyout Roles: If you're open to these roles, consider firms like H.I.G., which offer a blend of growth and buyout strategies. These roles can provide a broader skill set and exposure to different types of deals.

By focusing on these factors and leveraging your long/short background, you can identify the best opportunities that align with your career goals.

Sources: Prestige Rankings Thread - PE firms, Top Venture Capitals that hire juniors?, Breakdown of Post-IB Exit Opportunities, Q&A: Analyst --> Associate at a VC / Growth Equity Firm, Q&A: VP in Private Equity (Growth Equity + LBO)...Post-MBA...Formerly IB Analyst