IBD---> VC or no?
Hey guys My cousin actually went to goldman IBD then left ( after analyst ) worked Corp Dev at yahoo, then started hes own tech based business afterwards, well after that ( prolly at 30 years) started, founded his own VC and many famous guys in silicon. I was just wondering if that is the correct and most effective path to reach a high position of a VC. Or should u just try to get an analyst job at a VC and try growing there. Or would it be better to do IBD at a BB and then see if you can leverage yourself to a VC?
Thanks for the help!
be an entrepreneur over and over again
haha
I interviewed at a VC for an internship before and talked to the staff, most employees have experience at a BB doing buy side or IBD. They tend to use head hunters to find their staff or friend of a friend. Why do you want to work at a VC? There's more opportunities at a BB.
idk I like starting businesses and helping other people start businesses it seems very interesting to me. BB seems great too idk I feel like the VC side seems more fitting for an entrepreneur mind set. But at what grade levels do VC's give internships? like freshman year, soft, junior, senior? Also you think that corp dev or BB/PE is a better option for people who want to help and deal with business leaders?
I appreciate all the help
Junior year mostly, it depends on your resume and accomplishments. From what I understand most VC have BB experience. You can check out resumes of Analysts working at a VC on linkedin and see what they did. You know you will be mostly doing due diligence on the prospecting firm and valuations as an Analyst.
Depends on the kind of VC... Alot of tech-focussed VC is populated almost entirely by engineers, former entrepreneurs, straight-from-undergrad VC people, and former managers from the industry involved. Check out some Accel (not Accel-KKR) and KPCB bios. Almost none have banking backgrounds.
Ohh wow I see thanks!
start your own company, work in business development of a tech corporate or in a start up. IB is not necessary at all, a lot of people get an mba if they want to learn more about business and finance but even mba is not necessary in VC.
If you are planning a career path with the end goal of VC, you will never be in VC...
From IB to VC; best group to make the jump? (Originally Posted: 09/17/2015)
If trying to move from investment banking to venture capital, what groups would be best to make the jump?
I assume that tech groups, as well as product groups such as M&A are good. I also assume that leveraged finance and DCM would be terrible groups for making the jump to VC (you aren't exactly working with small companies).
Does the name of one's bank matter? Will being at a bulge bracket or elite boutique make VC recruiting significantly easier than being at a middle market?
All input is appreciated.
Bump
look at the profiles of analysts/associates at your target VC funds to see what their backgrounds are. tech banking will generally feed best from IB (GS TMT, MS Menlo, Qatalyst, etc).
Being a tech banker in SF is the easiest transition. Top BBs and Qatalyst are the easiest paths, although some VCs really like MBB candidates...varies from shop to shop.
IB Assoc with VC Offer (Originally Posted: 02/01/2014)
I'm currently a first year, post-MBA IB associate and I have a VC offer in hand for an associate position. This is at a small fund (think $60 million) with an OK track record.
I would be the sole associate for that firm and would come in at around an $85k salary with no carry.
Next year in IB, I'm looking at $300k+ comp and came to this forum trying to make the right decision.
Any thoughts or experiences would be very helpful. Thanks!
Think of your career as you would any investment. If you have a strong belief in this firm and your fit, go for it.
However, given the pay cut, I imagine you'd want to join with the expectation of future growth. Unless the fund grows its AUM significantly and has outsize returns, with standard management and performance fees, the overall comp. pool just isn't that large right now.
I'm usually one of these people that argue that one shouldn't put to much emphasis on pay or a pay cut when moving to a different role, especially if the new role is more exciting or more aligned with personal interests. But $300k vs. $85k, that's a huge paycut and I wouldn't do it tbh.. But then again, I don't know about the growth opportunities at this VC firm so I don't know..
Maybe someone more experienced will have a more insightful advice for you. Still wanted to bookmark this topic.
That's a great point about the growth of the fund and what that means for future salary.
I'll bring that up when I discuss with them next.
A bit perplexed by your description of the fund as $60m with an okay track record... is this very early stage / seed investing? There's a big gulf between shops in the VC world as I'm sure you know, and I can't think of too many reputable shops with fund sizes below $60m. Are these well known and reputable partners? Would be a pretty bad move to leave $300k comp, especially post MBA, to move to a fund that's not near the top decile (my opinion obviously, for what it's worth).
If you're at a Tier 1 BB and doing well there will future VC opportunities down the line especially as you get more senior you're rolodex will grow, especially with VCs (they are your clients after all). I just moved to a reputable VC and in our meetings with potential co-investors I rarely met one who had AUM $60M. You're not going to get compelling opportunities to invest into with such low AUM (if you're considering tech or healthcare). Perhaps you're thinking consumer and i have no idea about VC consumer. Send me a PM if you want more info
Would be interesting to learn more about the firm - if recently started and performing well this could actually be a great opportunity. Prestige and brand name are the result of strong performance (and not necessarily a reliable driver of outperformance in the future) so I wouldnt reject the offer "automatically because it's not KKR / Kleiner Perkins".
You want to diligence whether (a) these guys are / will be able to make excellent investments and thus returns (ie have they proven in the past that they can pick the right firms and can they really help teams they backed succeed) and (b) if they have access to LPs that will support them with capital until that point where everyone believes the firm is good indeed.
The right answers to these questions (happy to detail in PM) should really help lower the risk of this career move. Your interest in these points should only irritate them if they're got something (terrible secret?) to hide.
Thanks for all the advice guys!
The one point I differ with is the availability of VC offers to associates in IB. I haven't heard of (in the history of my group) anyone making that move at any level from A1 - A4.
Furthermore, the senior associate / associate level is the only entry level position to break into until a partner opportunity would come up (would also require bringing in $mm to the fund). As an A3 - VP, it just wouldn't be smart to move to the VC associate level. A1 / A2ish is probably the last year I'd make that jump.
This is crazy that you're even considering it, to be honest. The fact that they haven't offered you carry means they don't give two shits about you or the position. Imagine if you were them...would you offer someone a 70% cut in pay to lure them to your firm with no sort of optionality attached? You should be insulted.
The salary is market for associates in VC and associates don't get carry in most cases.
$85k base salary with no bonus and no carry is definitely not market for a post-MBA associate. Even pre-MBA associate get more than that.
This is not a post-MBA role. I have no VC experience and wouldn't be able to land one of those. I know I have to take a step back to enter the industry and am willing to take the pay cut.
There is a bonus. Expected around 25 - 50k.
Pitchbook's 2014 VC / PE comp report states associate (pre-MBA) roles pay on average 90k + bonus w/o carry in firms with AUM under 100mm. Senior associates earn $125k + bonus + 5% of carry. That's what I'm using as "market" comp.
135k is like what a first year associate gets out of Harvard Law School at a corporate law firm for instance...I think if you want to pursue the VC space you could probably do this for a year or two then transition to a better opportunity...if you do the IB associate role then you're pretty much stuck there I would imagine.
Ask for equity
VC from IBD (Originally Posted: 12/07/2014)
Hi all, I'm currently a third year analyst and looking to get into VC's. I work in a TMT group at a top MM firm but haven't had much tech experience, mainly telecom and media. What are people's advice to break into VCs. I don't know too much and I don't know anyone in the industry. I am much more interested in technology, startups, and early growth companies than working in PE or HFs and actually do not really like detailed modeling or financial diligence at all... Also - what is the expected comp (base, bonus, carry) at reputable VCs that a headhunter can connect me with?
Sorry for the basic questions... Thanks!
If you really want it you should start reading and learning more about VC and the tech industry in general.
I was referring more to the recruiting process and questions firms in specific stages concentrate on.
Thanks!
I was referring more to the recruiting process and questions firms in specific stages concentrate on.
Thanks!
Do a search. I answered all these questions and much more in previous threads.
Enter "best-headhunters-for-vc" into the search box. Not being facetious, I just can't post questions yet.
In any case. Glocap is great and they offer a searchable partial listing..
The OP wasn't asking for headhunters, but for very generic advice that was covered ad nauseum in my AMA on this exact forum. The reason I did that in the first place was so people could use it as a resource and not ask the same 5 questions over and over.
Look at the thread i posted in a few weeks ago about this very topic. It's on the first page.
And I would say there is nothing to lose (despite what others may say) about reaching out directly to partners at VC / growth equity firms in parallel to working with recruiters. Worst thing they can say is we don't have space or not interested. Your job in VC / growth will almost certainly be focused on sourcing, so they won't be bothered by your outreach.
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