Late stage VC vs. PE
TL;DR: Currently in tech PE, could make VP soon but realizing I don’t enjoy process work or team management. Love research, markets, and founder conversations — curious how much process work exists in late-stage VC.
I ended up joining a PE firm after my banking stint, and a few years in, I’ve realized this career isn’t the best fit for me. I’m at a tech-focused PE fund and could make VP in a year or two, but I don’t want to because I don’t enjoy process work or team management.
What I actually love about my job is the research and market work, with some light modeling. Honestly, I think we go overboard on modeling — 400 rows just to calculate quarterly revenue. I also dislike the heavy portfolio company involvement since we back B-tier management teams and have to constantly micromanage them.
I’ve thought about hedge funds, but that’s not the right fit either. I love talking to founders and see sourcing as a great way to research industries and build a strong network.
Can anyone speak to how much process work there actually is in late-stage VC? Do you have to manage teams, set up work plans, and manage advisors?
Late-stage VC could be a great fit for someone with your interests and frustrations in tech PE. Based on the most helpful WSO content, here’s a breakdown:
Process Work in Late-Stage VC:
Late-stage VC typically involves less process-heavy work compared to PE. While there is still some level of diligence and structuring, it’s not as exhaustive as PE’s deep dives into financial engineering or operational oversight. The focus is more on evaluating growth potential, market dynamics, and founder vision rather than micromanaging portfolio companies.
Team Management:
Unlike PE, where team management and portfolio company involvement are significant, late-stage VC doesn’t require as much hands-on management. You’re more likely to work in smaller teams, and the hierarchy is flatter. The emphasis is on collaboration rather than managing large teams or setting up detailed work plans.
Founder Conversations and Sourcing:
Late-stage VC aligns well with your love for founder interactions and industry research. Sourcing deals and building relationships with founders are core aspects of the role. This allows you to leverage your network and market knowledge without the heavy operational involvement typical in PE.
Modeling:
While there is some modeling in late-stage VC, it’s generally lighter and more focused on scenario analysis and growth projections rather than the intricate, granular models you described in PE. The role leans more qualitative, especially when assessing market trends and company potential.
Portfolio Involvement:
Late-stage VC firms often back more established companies with stronger management teams, reducing the need for constant oversight. The involvement is more strategic, focusing on scaling and preparing for exits rather than fixing operational inefficiencies.
In summary, late-stage VC offers a more research-driven, founder-focused environment with less process work and team management compared to tech PE. It could be a natural transition for someone with your interests and skills.
Sources: Difference between late stage VC and growth equity, https://www.wallstreetoasis.com/forum/venture-capital/early-stage-vc-101-5-questions-you-better-be-able-to-answer?customgpt=1, Top Venture Capitals that hire juniors?
I'm a bit earlier but it really depends. Most VC firms, outside of the handful of A16Zs of the world, run really really lean. You have to make the power law work. The "best" pure venture funds generally cap their fund size because it's really really hard to find fund returners once you scale pass a certain point.
Because of that, you generally don't have a substantial ops / value creation team that buyout funds do. Thus, unless all of your portcos are doing great, you'll still be handholding and such. Less so at that later stage as they are relatively professional at that point.
The multi-stage funds like GC and Insight do have internal teams to support you though. At those places, you'll be doing sourcing/executing only.
Definitely thinking about the firms where I’d hopefully do more sourcing / excuting and less portco work. Some of the firms I was thinking are crossover and late stage VC like Coatue, Dragoneer, Alitmeter, Bond, Meritech, Norwest, NEA, Insight, Greenoaks, etc. Do you think those roles would be better for what I’m looking for? Appreciate the help here
Those have very different mandates / focuses. In addition, you can look at them all you want but candidly, they rarely hire juniors + you need a great background for it. A BOND vs. Coatue are looking for very different backgrounds.
I'd take a look at some other names like Summit, TA, Spectrum, SIG, etc if you're coming from buyout.
Can't speak for other shops but I'm in late stage VC and we have to do tons of process work, team management, and working with advisors.
Average VC fund has 12 portcos so it's not the spray and pray like people imagine, at least for the majority of VC shops. If you're at a Sequoia level shop then they have the capital and priority access to the best opportunities to throw money around and focus on founders and market research, but I think that may be the exception more than the rule. Could be wrong but that's my impression.
I'd advise targeting a VC shop that has a shit ton of portcos or angel investors rather than late stage VC.
Thanks for the clarity here, that’s super helpful. I still really enjoy the analytical part of the job, which is why I thought late-stage VC might be a better fit.
Please correct me if I’m wrong, but it sounds like late-stage VC focuses on more exciting deals and market research, with a stronger emphasis on sourcing opportunities and less on process-heavy work like running lender processes or managing multiple advisors, though there’s still some of that involved. You still build models, but you don’t go overboard and create 500 rows just to get to revenue, right?
I’d love to get your perspective because I think this path could be a much better fit for me than PE, though I’m not entirely sure if that specific type of role really exists.
Late stage VC is "exciting deals" if you're at a good firm with lots of deal flow. You do build models and manage processes but they're a lot less complicated and most of the value comes from sourcing and being able to get access to hot deals.
I think the issue you're going to run into is that you're right in this middle stage where you're too experienced to come in and due pure execution work but you're also not senior enough to come in and immediately generate deal flow.
As you go up in PE it's about deal flow but also deal structuring whereas late stage VC requires more and more deal access.
Thanks for the clarity here. That sounds like something I’m more interested in. I’m a little less worried about breaking into late stage VC at my stage. There’s actually a ton of people at my firm and similar firms a like that have done it at firms like the ones I’ve mentioned and more. What does the process work entail? Would love to learn a little bit more and how that might compare to PE if you know.
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