Role of a Growth Equity Associate

I've worked at a larger growth equity fund as well as currently a small one (5-10 person team). My experience as an investment professional has been that the role will be tilted to either deal execution / thesis-driven investment work, or on the portfolio ops front, FP&A / M&A value-add that you'd largely expect anyone with an IB/junior PE background to be able to do.

On the operating team front, this tends to vary by firm, but you'll see most private equity firms advertising some kind of dedicated "value-add" team even in buyout these days. At my first fund, we had a full-time team of operating partners on payroll who would work with the deal teams as part of business diligence, and sometimes thereafter with actual portfolio companies on specific aspects of the business (for example: a DTC specialist might come in and help optimize a portfolio company's Amazon channel, etc.). There's been a growing debate as to the value of a lot of these operating teams - is someone who led a career in supply chain at a $30B public company the right person to come in and help a $50M revenue company? At my current fund, we don't have the fee base to support dedicated operating professionals. However, we still have an operating advisor "network", which consists of professionals who we essentially contract on an interim basis (as CEO, CFO, CRO, etc.) for investments in which part of our deal / thesis is professionalizing management. In a lot of circumstances, these teams have really been more "pitch" than practice - in some deals we won (even at a lower price), the difference maker was the connection to a certain person in the operating network, even if that person never ended up working with the portfolio company.

As an associate, your role in function will likely not look too different (unless you go to a sourcing shop such as TA, Summit, etc.) than a buyout shop - deal diligence and execution. Where the difference lies is largely how you think about underwriting / investment theses / deal structuring. In growth, particularly earlier stage growth, there tends to be a much bigger "what do you have to believe" lens (can this brand's unit economics from its hero product hold if it expands from women's line to men's? What's our return risk / sensitivity if the men's line sees only 50% of today's products' retention rates? etc.) rather than a financial structuring and engineering lens.

There definitely can and most likely will be a decent amount of portfolio company work versus buyout funds where targets are mostly set-up to hum along without added help, but I'd caution against glorifying it too much as a lot of it in my experience has actually turned out to be pretty basic, mundane work. Instead of sitting with the VP of Marketing and helping him toggle the paid media channel allocations, your job is much more likely to involve crunching the DTC transaction data and helping with materials that would help the expert do his job. Instead of working with the CFO to rewire a Company's cash accounting to GAAP for audit purposes, your job may be to help lighten the CFO's load by thinking through a good way to layout (and start compiling) the Company's first formalized quarterly reporting package. Instead of touring potential new retail sites with the development team, your job may be to build a quick and dirty real estate pro forma model with high level inputs that the development team can plug in and present to the Board for approval. Where there is value here beyond the work is simply being exposed to all these various business & ops teams, being able to take advantage of seeing how they think, and building a potential network with people who have expertise outside of your own.

When you go up the chain as principal / partner, you should have a great surface-level knowledge of many facets of business and brand-building, but again, you aren't the right person to actually go hold any management team's hand and do it with them. At the end of the day, you will always be seen as a potential capital partner, but in the increasingly competitive environment we're seeing, being a capital partner with extensive connections (i.e. you can introduce them immediately to a retailer, or you can bring in a guy you worked with as part of an exited investment who helped launch a successful omnichannel strategy) is highly valued.