Q&A - UK-based Growth Equity Associate
Have been a long-term reader of the forum but never contributed anything - here's my turn
Background:
Associate at a top Growth Equity Fund based in London - I cover all things Tech/Software/AI from Series B+
Prior to that I was at a Bulge Bracket IB for 3 years
Ask me anything about day-to-day GE or IB, comp / career progression, recruiting etc
Undergraduate interested in Growth:
1) How does an individual investor and a firm as a whole differentiate themselves from the rest of the GE space, particularly to founders and LPs.
2) Best London shops; big hitters and ‘up and coming’ would be great :)
3) How plausible is it for someone to enter from MBB/T2 or a PM role?
4) Any tips on internship/analyst recruiting? Have a BB internship lined up but would much rather skip IB if possible.
5) What is the most challenging part of your job?
I have more but I’ll hold back for now for your sanity :)
1) It's difficult given there are so many funds out there! But at my fund a lot of our Partners have very strong operational backgrounds and are former entrepreneurs themselves - this is a big draw for founders we speak to as well as LPs, as we're very hands on post-investment. We're also high conviction investors and go deep into specific sub-sectors we like, which helps differentiate us just in terms of knowledge of the space and being able to make intros etc to founders
2) There's plenty of posts already on this forum covering that!
3) Very plausible - especially at the earlier stage of growth (i.e. Series B+ as opposed to Series D+ / pre-IPO investing), as the earlier stage the company the more you need to think about its commercial aspects as opposed to financial modelling etc. Also anyone can learn the financials but it's a lot harder to learn how to think critically about a business
4) I would take the BB internship. It's a great training ground not only in terms of hard skills (i.e. technicals, understanding how a process works etc), but also soft skills (learning to talk to CEOs / Founders, how to present, build relationships etc etc). A lot of buyside shops don't have great formal training programmes and whilst it sounds cliche, your Analyst years in IB are unbeatable in terms of the relationships you will build with colleagues and the broader culture / fun around that. A lot of my closest friends are from my time in IB, and it's just not the same when you move over to buyside where teams are a lot leaner and things are a lot more "serious". Re tips for internship / analyst recruiting, I will make a broader post about that
Thank you for the response!
1 cont) Seeing as your partners are ex-founders themselves, how do you see yourself developing professionally into the firms culture (i.e. moving up ranks) coming from a (presumably?) less entrepreneurial background?
2) How and when do you decide what sub-sectors of interest? I.e. does your partner just say ok xyz in AI are interesting, let's look at stuff now, or is it more long term (i.e. AI will have future impact in xyz. let's keep an eye on startups in this area)
How has your comp progressed over the last 3 years?
A1 (IB) - c.£100k total comp
A2 (IB) - c.£155k total comp (incl. £25k A2A bonus)
Aso 0 (IB) - £110k base + £30k half-year bonus
Aso (Growth) - £120k base + target 40% bonus
Interested in GE/VC, but will be interning and probably returning to a non-TMT coverage group (HC). Not particularly interested in biotech GE/VC, or even healthcare. Frankly speaking, I just networked better with this team through luck, but want to end up in tech investing. How would you advise proceeding/framing the experience?
Shouldn't be an issue as long as you can demonstrate an interest in early-stage tech investing during interviews, i.e. pick a few companies and sub-sectors you find interesting and be ready to talk about those at length. GE/VC interview processes are usually a lot less technically focused (at least mine were), so main thing is how you think about businesses. It can still be helpful to draw parallels to stuff you've looked at in HC, i.e. provide a different POV to things where possible. Also if you can demonstrate entrepreneurial spirit in any way (e.g. having side projects, starting initiatives at work etc) that will go a long way. People in GE/VC come from all sorts of backgrounds not just TMT IB
senior analyst at a sector boutique covering tech and software looking to get into a Seed - Series B fund (more DD focused vs financial engineering)
- Who are the headhunters that your fund currently use
- What are the backgrounds of most associate hires you see (is BB a requirement or are boutiques (non-EB) seen as favourable?)
- What % of your day is split between modelling vs DD reading vs research? Do GE shops hire advisers or is it all done in house
1) We use PER but KEA also does a lot of VC. Asset Partners and Novus Executives are less well-known but also have a few decent mandates from my experience with them
2) Really varied at least where I'm at - it's about 50:50 IB / Consulting and we don't care about prestige much (there are people from all "tiers" of banks and consultants). It's more about attitude, entrepreneurial spirit and how you think
3) At my fund we almost never hire advisors as our team has a lot of operational expertise and we have a platform team across Tech / Legal / Finance / HR etc. Some bigger shops do hire advisors though. My day-to-day can really vary and it depends on whether or not there is a deal going on. If we're in deal mode (3-4 times per year) my days will be 90%+ deep modelling / DD / research. In quieter times it's 50% networking with founders and co-investors and 50% research, thesis building and high-level review of VDRs
How long does an average deal mode last?
1) Have answered this in above question
2) Very rarely if we have issued a TS (we'll close about 90% of them - but equally I have not been at the fund for too long so might vary over time). We are very high conviction investors and will only go super deep on a deal 3-4x per year. Usually at that point we have already been nurturing the company for a while, know the team super well etc - given the strength of our partnership it's rare we'll lose out on just valuation / terms. Companies often want us on their cap table in any case and we're happy to co-invest alongside other funds so usually there is some kind of solution
3) At our fund it's Associate onwards but only once you've been there for 2 years. I'm still technically at the bottom of the ladder, so don't have much visibility further up!
Do you look at deals in Europe only?
Mostly Europe but I have looked at a few in the US where they align with my sector expertise etc
Hello - I am looking to transition into deal origination within GE. Coming from a non-banking background, but have a couple of years experience in deal origination, what would be your advice to successfully transition? Also, do you think that GE houses in general, do more in-house origination or outsource it?
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Hey,
I have several questions :
1) Is your job interesting from a technology point of view ? Do you actually look deep into tech or financial KPIs matter more ?
2) Is moving from early stage advisory to growth equity feasible ? Because I've seen many IB bankers move to GE ! Not many early stage advisors. Context : I'm currently working in a small boutique (arrived as 1st employee, we are 15 now), we help startups get venture debt and grants. I would like to work with more mature scale ups but I don't really know how to make the move :)
Thanks for doing this!
Currently at an early stage fund (pre-seed to Series A) with some experience as an operator before that as well as 2 years in IB. How hard / easy do you think it is to move from early stage to slightly later stage (i.e. anything Series A and above)?
Thank you for doing this, truly.
1) How important are language skills in your role, being that you said you work on pan-european deals? Is it a hard(ish) requirement like in MF PE? Or not a factor?
2) For someone looking to break directly into GE post-graduation, is this feasible or is a 1-2-3 year stint in IB/Consulting the only route?
3) I have an offer to join a growing, but still small Series A focused niche VC but long term GE is my goal. Silly to take it over re-recruiting for IB/Consulting?
Thanks!
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