What defines a "sourcing shop" and what is the general consensus on being at a top tier growth equity firm with a sourcing component vs. top growth equity without a sourcing component? General gist I've gotten is almost all GE firms have some sourcing in the associate role, but others are "sourcing shops" because it's more significant and are somewhat stigmatized because of it.
Is there a major difference in experience, b-school / other exits, and compensation if sourcing is part of the associate role?
This is a GREAT question and I am surprised it is not brought up more often.
I think the litmus test between "pure sourcing" and "sourcing heavy shops" is simple: "Are you managed as a business development rep?" Do you get leads, have to hit a call #, etc.? Or is your job sourcing heavy but you get to do other core aspects of the investing jobs (due diligence, modeling, etc.)?
There's not much exit opp difference but the main difference is in shops that are sourcing heavy but have other elements of the job that make you a better investor (get to due diligence, work on hypotheses, work with operators) longer term.
Sourcing only is fine but at some point you want to develop your investment acumen in a detailed way and get reps on other aspects of the job. Pure sourcing jobs often give that job to sr. associates or partners because for early and growth-stage cos the data can be quite limited.
Makes sense, thank you. Could you rank Summit, GA, TA, Insight in terms of sourcing heaviness? What are the quality of exit ops from these vs. say an SLP/Thoma/Vista; does the sourcing component lend itself to anything unique that pure buyout doesn't?
Should ask people that are there now. I know vague things from others at certain shops but others should do a detailed ranking/comparison
Curious too. Out of summit, TA and GA, for which are the associate roles primarily sourcing?
Through the grapevine have heard TA is 50/50, maybe up to 60/40 or more deal work depending on your experience. When things are live they are live - you are in the model, doing DD, managing the process, etc. But when you are not on anything live, rather than be an LBO monkey creating models for every CIM that comes in, the aso are primarily on the phone learning about their vertical and making connections. Have heard TA kids expect to bring home 300+ at aso1.
Would also appreciate hearing from anybody at these shops or those with more perspective.
Bump
Would appreciate any color on sourcing heaviness across the top ge firms at aso level
Definitely would scare me a bit to go to a shop that's super sourcing heavy where I'm not getting enough exposure to the fundamentals / modeling / execution / diligence component
What does sourcing look like at TA? Are you given a coverage universe to follow as an Associate, like you are at Insight? Or are you free-forming it? If free-forming it, what training to do you get on sourcing?
Most larger growth firms tend to be sourcing focused as analysts, deal execution focused associates, and sourcing heavy VPs (given they're looking to bring deals to investment committee).
I went from banking to PE to growth and frankly I'm envious of the analysts at firms like GA, TA, and insight given the amount of autonomy they receive. Sourcing is far more difficult than the "fundamentals / modeling / diligence" components people mention. I look at hundreds of deals a year and probably only go to investment committee fewer than 10 times a year. Finding the best businesses through a thematic investment thesis, speaking with the founders and building relationships with them, and bringing these businesses in front of senior people is admirable.
Given your unique background (have worked in PE/IB and GE), would you advise to start off my career as an analyst as a sourcing analyst in GE or IB analyst? Asking because I have an offer from a top BB and a SD to a top GE (Insight/GA) (and am interviewing at many other GEs) as well. Mainly worried about the lack of technical experience I would get as a sourcing analyst at Insight/GA - would that limit me later on? What would exit opps look like as a sourcing analyst at Insight/GA - could I still get into buyout PE/VC/other GE/startups later on, or would IB analyst leave more doors open (i.e. do IB to GE so I can get the financial skillset as well)?
Also as a side notes, sourcing work does seem interesting to me as of now (but I also enjoy technical analysis).
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