Role of a Growth Equity Associate
Part of the appeal to me (based on the limited research I've done) of being an associate in GE over buyout is the element of value creation beyond initial financial engineering. Given that these firms are earlier stage, theoretically, it looks like you'd be able to work with PortCo's on brand building, sales optimization, hiring, etc.
However, looked at TA Associates (https://www.ta.com/team#?roles=strategic-resource…) who has an entirely consulting-sourced team dedicated to doing some of that operational improvement. Is this more of the norm or the exception in GE?
As a post-banker associate, would I be "pigeonholed" into churning deals" no matter what area of PE I end up in? Is there a way to get exposure to some of that operational improvement work without becoming a consultant first?
I work at a growth firm with a portfolio team and would say it’s increasingly typical in the industry as capital is a commodity + these resources help de-risk execution by getting involved at greater depth than financial guys credibly can. Off the top of my head, Insight, Frontier, Apax all have groups like this.
The investment team will still work with portcos, but as an Associate your involvement will be more oriented toward reviewing monthly reporting, helping with add-on deals, and diagnostics / governance kind of stuff.
For example: I review marketing efficiency metrics (CAC, payback, etc) among other things for one of our companies and noticed things were getting worse. We brought it up with the management team and they mentioned that they’ve been getting less attention from a key channel partner which is lengthening average sales cycle time. We then deployed a portfolio team resource to work with their team and turn things around (while I basically forgot about it until the next update / conversation).
From what I’ve seen, You’re either heavily focused on sourcing or heavily focused on execution. Basically, you’ll spend 100% of your time sourcing (which includes reviewing decks sent to you, calculating unit economics, doing some market research, etc.) until you find a deal, in which case you’ll spend 70-80% of your time working in this deal.
So it involves a lot of networking, market research and cold calls.
Associates are not so involved in PortCo operations (this is handled at partner / director level) but you’ll handle the reporting for the deals you sources.
Note that this is for MM shops, some of the largest shops might have differentiated teams for sourcing and execution. You might also focus less on sourcing at pre-IPO shops because there are less deals to focus on at this stage.
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