Q&A: 2 years MBB -> VC

This firm was specifically looking for a consultant for this role, and they'd hired several consultants in the past. This firm likes to be hands-on with their portfolio companies, and this role will focus more on working with portfolio companies on growth initiatives as opposed to positions where sourcing is a larger component of the job. As a result, the classic consulting skillset of driving to insights through data analysis, communicating them to management and getting recommendations implemented is a very natural fit.

I also studied engineering in undergrad and read TechCrunch and other websites/blogs often enough to be at least somewhat knowledgeable about what's happening in the space, and I think those things may have helped on the margins in terms of convincing my interviewers that I was legitimately interested in tech.

I had no prior VC experience. MBB firms, with rare exceptions, don't work with early-stage, high-growth companies.

I did have a 6-month stint in Bain's private equity group (PEG), and that was definitely something I was able to point to as relevant experience during the interview process. As for how I was able to do that, Bain does a lot of private equity work, so it was pretty easy to make that happen. It's very rare for people who want to do PEG not to get the chance at some point.

1) No, I don't think it did. Bain doesn't have as many smaller regional offices in places like Cleveland and Philadelphia as McKinsey and BCG do, so there's far less of a disparity across the system in terms of competitiveness. But I guess I can't really say for sure, because I'm not privy to the selection criteria they were using when evaluating my resume.

2) The pay is better than it would've been if I'd stayed at Bain. As for hours, I haven't worked there yet so I can't for say sure, but my expectation is that they'll be slightly longer than my hours at Bain on average.

In my year and a half on the job, I've done a 6-month rotation in PEG, a 3-month cost-cutting case for a tech company, and a 4-month pricing case for an retail company, with some beach time filling in the gaps. My time in PEG has definitely been the most interesting. Thinking about a company's value holistically is a very cool experience and the tight timelines force you to get a lot done in a very short period of time. As a result, the pace of learning is incredible.

1) It varies year by year, and I can only speak to what I've seen in my office, but I would estimate that 70% of ACs stay for SAC year. I've heard through the grapevine that it's a lot lower in SF particularly because of all the cool tech jobs out there, but that's second-hand knowledge.

2) So, again, a lot of potential depth to this question, but it boils down to being interested in tech and companies in an early stage of growth. I was never too interested in buyout PE; building financial models seems boring to me, and if I'm going to be working 70+ hour weeks, I want to be doing something I find intellectually stimulating and enjoyable, at least to some extent. I actually really like the work I do at Bain. For me, it strikes a really good balance between high-level strategic thinking, diving into data for insights, and pulling up and communicating those insights to key stakeholders. I would've happily stayed at Bain for my third year, if not longer, if something hadn't come up that I was really excited about.

For me, the opportunity to do similar work to what I'm doing at Bain and build off of the skillset I'm already developing while focusing on companies that are, to me, in a more exciting stage of growth, was something I couldn't pass up. I'd rather work on customer acquisition strategy for a fast-growing SaaS business than do a cost-cutting diagnostic for a large oil and gas company.

I'll also get to start building domain-specific expertise. Being a generalist and working in a variety of different industries and functions can be fun and exciting, but then you look back and realize that you spent a lot of your time learning very nichey industry-specific knowledge that's really useless going forward. I think you can be a lot more dangerous and valuable by picking a lane.

Another pro of working for an investment firm as opposed to a consulting firm is that I'll get to be a little more answer-focused. When you work at a client services firm, there is a certain degree of CYA work you have to do. I won't miss doing things like formatting sources slides and building appendix slides that have a 1% of ever being read. Investment firms also run leaner than consulting firms with less layers, so I'll be able to spend a little bit less time managing process.

There are definitely cons too. The big one is culture. For me, everything you hear about Bain having a great culture with fantastic people rang true, and I'm going to miss that a lot. The firm I'm going too also has a good culture with people I like, but there are things about Bain that you just can't replicate as an investment firm with a much smaller total headcount. I'm going to go from being part of a large cohort of classmates to being one of 2 or 3 hires. That's going to be very different.

Also, if I were to stay at Bain, I would get the chance to start managing junior ACs pretty soon. I won't have that opportunity in my next role.

3) I definitely does help. I talked a lot about my PEG experience during my interviews, and I think it definitely gave me exposure to what investors think about and how to "speak the language" in regards to certain things. With that said, multiple classmates of mine were able to land buyside jobs without doing PEG.

I would absolutely do PEG again, even if I had no interest in buyside recruiting.

Sorry, but I can't comment on this based on personal experience. As I mentioned above, the firm I'm joining was specifically looking to hire an ex-consultant.

Based on anecdotal things I've heard, you would be well positioned, particularly at early-stage VC firms, where financial acumen is a much less relevant skill compared to demonstrated experience and passion for technology. I also don't think MBAs are valued too highly by VC firms. If you've worked your way up the ladder at well-known startups, I would imagine you have a pretty good network in the tech community, so I would start there.

There generally isn't "on-cycle" recruiting. Each firm tends to run their own process based on their own timing/needs, so it's not like LBO shops where there's a mad rush for a week every winter.

For me, I began the interview process in December and was tendered an offer in late January for a start date this summer. I think this is about as much lead time as you'll see. Most VC opps I've received from headhunters have said "for Spring/summer 2016 or immediate start".

1) Sort of. I know one Consultant who left to join a VC firm that a friend of his was starting up. I also know a manager who left to join the portfolio group at a large growth equity firm.

There's a pretty standardized process for pre-MBA folks in consulting to jump to buyside jobs. In VC, it's a little less standardized, but the "path" doesn't deviate too much. At the post-MBA level, things tend to be much more unique across the board. As such, it's hard for me to comment on what's "typical". I do think that if you were to make a jump, you would get comp and a title commensurate with your experience/tenure.

2) It may sound trite to say this, but interviews tend to be reflective of the role you're interviewing for. Because my role is focused largely on working with existing portfolio companies, the interviews were predominantly case-based through the lens of "here's a situation with an existing portfolio company, what would you recommend based on the circumstances".

If you were interviewing for a role that's heavy on sourcing, I would expect a lot of questions like "tell me a vertical you like and why" or "tell me about a company that you've heard about that you would want to invest in". Those questions are designed to test whether you're capable of thoughtfully bringing in deal flow.

As such, I wouldn't expect to be tested on financial modeling skills unless the role involved a lot of financial modeling. Because VC firms invest in early-stage companies without too much in the way of historical financial data, it's rare for a role to involve a lot of financial modeling. But if you were interviewing for a role more focused on late-stage investing, then maybe it would.

Would prefer not to even say ranges. I'll say that the comp is definitely higher than consulting, but not quite as good as what most people get at buyout shops.

They focus more on later-stage investments. You could call it growth equity, but they'll do some late Series A/early Series B, so they blur the line a bit.

I did think about interviewing with other firms . I only got serious with this firm and a couple other places that I'd classify as growth equity, but I thought about a wide range of potential firms, and probably would've cast a wider net if this hadn't worked out.

I did focus on roles where I could be pretty hands-on with the existing portfolio companies, because I knew that long-term, I wanted to move into an operating role as opposed to staying in investing.