Q&A - VP Tech Growth Equity

Lateraled to another growth equity fund over the last 12 months. Moved from Sr. Associate to VP.

I previously posted a Q&A here.

Happy to answer questions without going into too much detail about myself.

Always enjoyed the insight I was able to gather here, and so trying to pay it forward.

Comments (47)

2y 
karypto, what's your opinion? Comment below:

have you heard of Joshua Tree

  • 2
2y 
bullyeah, what's your opinion? Comment below:

Thanks for doing this. A few questions...

1) How important is is that a candidate coming from IB specifically have a tech-related IB background? Is it absolutely necessary that his/her IB experience was in the tech space? And if so, is it imperative that the specific area of tech be related to what you guys do?

2) What is your firm's hiring practices when it comes to analysts coming from BBs vs. reputable boutiques?

3) If you guys are based in NYC, is there a preference for analysts from NY shops?

Thanks!

Most Helpful
2y 
ilc22, what's your opinion? Comment below:

No problem.

1) It is not absolutely necessary. I know plenty of people who covered other industries in IB before getting into tech growth equity. It helps, but definitely not required. You do need to articulate why you want to get into the specific industry. And really, why growth equity vs. LBO shop, why this stage of fund, etc.

2) Associate hires come from various BBs and boutiques.

3) No preference.

2y 
ilc22, what's your opinion? Comment below:

I'm not going to say it's easy, but if you network properly you should be able to get an interview somewhere. Headhunters can also help facilitate the lateral too. Hiring for Sr. Associates and VPs are much episodic and less structured. So you have to come across the opportunities, and evaluate whether or not it's the right one for you.

Moving up-market in terms of fund size as opposed to down is definitely harder.

2y 
accruedinterest, what's your opinion? Comment below:

Thanks for taking the time to do this.
1. What were the main differences in what shops were looking for at the VP level vs. the senior associate level and how have your responsibilities changed? 2. When you have sourced deals what's your value proposition for the company to have you come on as an investor compared to your competitors?

2y 
ilc22, what's your opinion? Comment below:
  1. Sr Associate is the bridge from Associate to VP. You either go get your MBA, get promoted internally or do the lateral.

If you're going to another shop, particularly if at a bigger shop, it's better to get in at VP vs. Sr Associate. VP is a hurdle that's harder to get over, and you'll expect the next couple of years worth of tenure will likely be more certain.

  1. It's an incredibly competitive industry. Everyone is going to say the same things about differentiation other than $$$. The best differentiation is to have a strong angle into the deal that allows you to pay the highest price (therefore have the most conviction to pay the highest price), have the most to offer and/or have built a really strong relationship (which could trump price, in less likely circumstances). It's a numbers game, and the fund needs to be able to play to its strengths, and maximize the odds of winning good deals. Note great company doesn't necessarily equate to great deal.
2y 
ilc22, what's your opinion? Comment below:

More likely for you to break in for a pure sourcing position, otherwise it's hard.

Different topic - don't use acronyms with people who may not know what they mean. ICould make the other person feel stupid or just not know what you are talking about. I had to look up what FAANG meant just to tell myself I should have known what that meant...If you're talking to a owner of a family run business who doesn't know squat about PE or anything like that, may turn that person off. Sourcing 101.

  • Intern in IB-M&A
2y 

To be fair, bankers use acronyms all the time.

Funniest
2y 
greatowel, what's your opinion? Comment below:

ilc22 don't use acronyms with people who may not know what they mean. ICould make the other person feel stupid or just not know what you are talking about. I had to look up what 'PE' meant just to tell myself I should have known what that meant...

Array

  • 6
2y 
PE-biz-dev, what's your opinion? Comment below:

I'm at a similar fund as an Associate and find myself going back and forth on if I want to pursue VP+ roles versus actually testing my mettle as an operator (likely starting in some Corp dev / strat / Chief of Staff kind of role).

  • What made you decide to pursue a long-term career in growth equity?

  • Did you ever explore actually joining a growth-stage tech company in a position like the ones I mentioned above, and what did you see as the merits / risks? I know it's not a terribly uncommon exit for folks

2y 
ilc22, what's your opinion? Comment below:

1) I think it's an exciting segment within finance, and more specifically PE broadly speaking. I enjoy getting to go out and meet companies. And then when you invest returns are typically driven by growth - the traditional LBO model is less appealing to me, and frankly i wouldn't be great at it I don't think.

2) I never did, but I've seen plenty of people go down this route. Aside from the career transition, merits include better work life balance and potential earnings power (company equity). Risks are related to the company itself (particularly if early stage) and time it takes to recognize the earnings power (might have to wait longer and be lucky at the right company) I've seen plenty of people be really successful making this kind of move

  • Analyst 1 in Other
2y 

How easy or difficult would it be for a McKinsey/Bain consultant to exit into tech growth equity?

2y 
ilc22, what's your opinion? Comment below:

I think at a higher level you need to ask yourself the following:

What type of industry do you want to be in. If Technology, what end of market of tech do you want to be in (healthcare, infrastructure, vertical market, etc.) Do you want to do business to consumer, or business to business software?

Do you want to work at a earlier stage business, or something more mature? Do you want to work at a Sequioa backed business or do you want to work at a company run by Vista? Do you want to work for a public company?

Geo is always an important factor

What type of role do you want at a company? CFO, Sales Operations, Customer Success, Corp Dev, Strategy, etc.

I think if you flesh out these questions for yourself, you'll have a much better sense of what is a "good" company for you to join.

  • Intern in IB - Cov
2y 

how much does tier of tech group matter in recruiting? Will you get looks at most good growth funds if you are at a solid BB tech group (not GS/MS)?

2y 
JD_123, what's your opinion? Comment below:

What are the top growth equity funds? Is it similar to MFs in PE?

2y 
ilc22, what's your opinion? Comment below:

to name a few: Insight, KKR growth, Accel Growth, Spectrum, JMI, Silversmith, AKKR, FTV, Norwest and many others

Growth is kind of a catch all, like VC. Some growth equity firms only invest in Series A (note different than pure VC still) and some are much more later stage (specifically the growth arms of MFs)

There's more growth equity firms that pure MFs if that's what you're asking. Not as qualified to opine on MF landscape though

  • Analyst 1 in IB - Cov
2y 

How do you prepare for Growth Equity interviews as opposed to traditional LBO PE interviews? Do you have any resources you recommend to study?

2y 
ilc22, what's your opinion? Comment below:

There will always be a case study. Maybe review a CIM, or do a paper LBO. Even in a growth equity interview. Maybe the difficulty won't be as high.

If sourcing is important to the firm, than you'll be asked questions that address your ability and interest to source. If it's clear you're not excited about dialing the phone, cold calling, meeting companies, etc. harder for you to land a gig at a sourcing oriented shop.

2y 
ch4oz, what's your opinion? Comment below:
  1. What's your firm's investment criteria (formal/informal characteristics) for sourcing deals and companies

  2. What's your best approach when it comes to networking, sourcing and calling up these companies? What kind of questions do you ask to really get an understanding of the company, the people, industry and have a thoughtful conversation?

2y 
ilc22, what's your opinion? Comment below:

I'm going to speak in general terms to keep anonymity.

  1. Our firm wants to check the box on the following criteria: geo, whether or not it is software, growth, level of funding, business model and unit economics. all this, aside maybe unit economics should be easy to get a preliminary view through research. There are other nuances that are firm specific that make something more or less exciting.

  2. Differentiate your outreach and stand out from the rest of the growth equity people. Do your research. build your sourcing muscle (prospecting, calls/meetings, etc.). Drive volume, which helps with pattern matching along with building sorucing muscle

  • Analyst 1 in IB-M&A
2y 

if you missed on-cycle with your preferred growth equity firms, would you A) stay for a 3rd year B) move to Corp dev / Corp strategy and jump to growth later, C) lower your bar and go to a lower quality opportunity or D) is there another angle to play?

thanks in advance

2y 
BearMonkey212, what's your opinion? Comment below:

Thanks for hosting this Q&A and hopefully this thread is still active.

1) What is your view on the ability of associates in capital markets (Private Debt, DCM, Syndicate) to transition to growth equity or PE shops in general? Although the valuation and modeling skills may be absent on day-to-day, could the sheer number of deal flow and ability to spot relative value among comps be an attractive skill? I assume that valuation & modeling can be learned at home

2) How often have you seen people leave corp dev or strategy roles to go back into PE roles? Would these be good candidates relative to competition that have PE or IBD experience?

Thanks!

  • 2
2y 
ilc22, what's your opinion? Comment below:
  1. Apologies, I have never seen this before. One route could be going to a top hedge fund or asset management fund (Tiger Global, Point72, Coatue, etc.) with PE/VC arms. Point72 is a good example with its venture arm - some of those people you see there started on the HF side i think. I don't know exit opps for those roles you mention, so i don't even know if HF's are viable exit opps to begin with

  2. I've seen it happen more lower market and in VC, but not that often. For Growth Equity specifically, in a vacuum, these candidates will be at a disadvantage vs. IBD candidates.

1y 
scorder011, what's your opinion? Comment below:

I'm in the process of making a lateral move. Any insight into the interview process? How in-depth are the deal discussions for a lateral at the VP level? As technical as the associate interviews?

1y 
jtclel, what's your opinion? Comment below:

Hi ilc22 thanks so much for sharing your insights! Have learnt a lot from your experiences. I'm currently considering an offer from an equity investment firm called Temasek (associated with Singapore). I understand they have a focus on growth/private equity, mostly minority investments. Was wondering how they are viewed in the professional growth equity industry by veterans like yourself? Thank you!

  • Intern in IB - Gen
1y 

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7mo 
stinkbug, what's your opinion? Comment below:

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