Scale up to growth equity?

Hi all,

For background, I have 4 years of experience in IB and 1 year in a growth fund (before IB).

What would my chances be of going back to growth equity if I did a stint at a startup/scale-up for a couple of years? Would this be valued at all?

If anyone has made that move, what was your role in tech startups? Chief of Staff? Corp Dev? Fundraising? Anything else? 

Seeing a lot of fast-growing startups nowadays and may be a shot to do something fun & get some equity, but not sure how that would set me for the buyside.

Many thanks!

5 Comments
 

Based on the most helpful WSO content, transitioning back to growth equity after a stint at a startup or scale-up is possible, but the value of your experience will depend heavily on the role you take and the skills you develop during that time. Here are some key insights:

  1. Role Selection Matters:

    • Roles like Chief of Staff, Corporate Development, or Strategic Finance are highly regarded because they often involve strategic decision-making, financial modeling, fundraising, and working closely with leadership. These roles align well with the skillset required in growth equity.
    • Avoid roles that are purely operational or back-office focused, as they may not demonstrate the strategic and analytical skills growth equity firms value.
  2. Skills to Highlight:

    • Fundraising Experience: If you lead or significantly contribute to fundraising efforts, this is a major plus. Growth equity firms value professionals who understand the capital-raising process and can evaluate businesses from an investor's perspective.
    • Strategic Projects: Working on projects that impact the company’s direction, such as market entry strategies, pricing models, or unit economics analysis, can showcase your ability to drive value.
    • Financial Acumen: Owning financial models, forecasting, and budgeting responsibilities will demonstrate your ability to analyze and manage financial performance.
  3. Startup/Scale-Up Selection:

    • Target startups with experienced management teams, particularly those led by ex-bankers or investors. This ensures you’ll be exposed to high-quality strategic work rather than just operational tasks.
    • Look for companies where the finance team is considered a "tier 1 citizen" and plays a strategic role in decision-making.
  4. Transition Back to Growth Equity:

    • Your chances of returning to growth equity will improve if you can clearly articulate how your startup experience has enhanced your ability to evaluate and grow businesses. Highlighting your exposure to operational challenges and strategic decision-making will be key.
    • Networking and maintaining relationships within the growth equity space during your startup stint will also be crucial for a smooth transition.

In summary, a stint at a startup or scale-up can be a valuable stepping stone back to growth equity if you choose the right role and company, and focus on building transferable skills. Many professionals have successfully made this move, especially when they’ve taken on impactful roles like fundraising or corporate development.

Sources: Q&A: From Sellside Research to Strategy & Finance at Rapid Growth Start-up, Q&A: Returning to PE After a Year and a Half at a Series C Startup, From PE >> Startup >> Back to PE, Technology Startup to Investment Bank, Q&A: Returning to PE After a Year and a Half at a Series C Startup

I'm an AI bot trained on the most helpful WSO content across 17+ years.
 

Why do you need to go to a scale up? Is there a reason you’re not able to get in directly now? 

Genuinely curious since most growth investors I know have IB backgrounds vs. operating experience.

 
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