VC Fund Investing
Hey Guys,
Currently working in consulting (Commercial DD mainly - for a Tier 2/3 consulting firm). My CV is not the best in the market (have moved firms a couple of times already) but I have an offer to join a pretty good-sized (in AUM terms) and reputable VC fund which does both direct investing and fund investing. The offer is for the Fund investing team - to identify, meet and execute investments in the best VC funds in Europe and the US.
I am currently paid well and in a managerial role in my consulting firm but dont enjoy the work or lifestyle - taking this job would require a pretty hefty paycut (~25%) and I am not sure about the long term pay progression or the opportunities to exit the fund investing role much further down the line should I want to - so a few questions if anyone has any views on this:
1) Thoughts on VC Fund investing as a whole (what the job actually entails and how interesting it would be, what sort of person it would suit most)?
2) How possible is it to move from fund investing into direct investing further down the line?
3) Likely pay and progression within VC fund investing?
4) What other exit opps might there be in several years?
I really like the team and the look of the role; I just need to be certain its right to avoid another wasted move on the CV.
Thanks!
Hi Consultantformove, no, I never sleep and so I can respond to any lonely threads (like this one) at all hours of the night. Impressive, I know ;-)
If those topics were completely useless, don't blame me, blame my programmers...
Currently work in PE FOF, the answer should be similar nevertheless given how it's just fund investing.
1) Your role will mainly involve doing DD on PEOPLE, not companies. You will map out a network of funds and when they are raising and proactively build relationships with them. Even if you do co-investments, your analysis will be highly superficial. You are basically confined to stress testing assumptions.
On how interesting it would be? I find it shit boring. I often feel like a caged animal just going through the motion of asking people the sameexact same set of questions on our due diligence list. When it is time for an update on the portfolios, I frankly can't give a flying fuck. We aren't in control of the assets, it's not like if you told me some bad news then I could really go do something about it.... Sometimes I wish the PE funds just kept their mouths shut and not provide me with that much information. Then I will have minimal notes to take to relay back to my bosses.
2) This is next to impossible. I have been here for a few years. It DOES NOT help. Did I mention you are primarily doing DD on PEOPLE?
3) Based on what I have seen people who come here just get stuck. They can't move elsewhere cause you aren't really building an in-demand skillset. My colleague once joked with me that since we were so good at doing DD on people we could probably become head of HR at some MNC somewhere down the line.
No idea about pay but this will depend alot on fund size but in general. In the PE FOF space, salary is a discount to what people in IB get. A steep discount. Not sure about VC FOF.
4) Exit ops I have seen are (a) restart all over in a different field (b) IR (c) nothing else.
As you can tell I fucking hate the role I am in. Made a mistake of getting in and now am finding it next to impossible to get out. Not sure what your considerations are but definitely will never do this again....
Honestly, just reading you post I think you should avoid this. Look at it this way. You are taking a PAY CUT to do a role that will severely restrict your future exit opportunities. Where is the upside in this for you??
This was really helpful - thanks. Ended up turning down the role and a great opp came up at a PE fund to do principal investment so thanks for the note.
Congrats dude! Glad you didn't make that mistake :)
While I agree with laughing_man, it will be hard. You should listen to the Podcast, 'Origins', the Truebridge Ventures episode. They talk about partiicpating in secondaries and direct investments. VC fund investing is interesting because traditional LPs aren't going to want to pay fees on fees to FoF forever, but a few that are really good make great returns and are the number one call for most VCs. I know a guy personally who went from VC FoF > GE > Top Tier VC > MP of his own Microfund ($15m fund size)
Venture is about the people. If you can invest in funds while getting to know the investors, entrepreneurs, and business models, you'll be in good standing to land a job elsewhere. PE FoF and VC FoF are pretty different as one is a game of consistent returns vs. outliers. Like I said, that guy I know has LPs in his microfund from the connections he made hustling at a FoF.
In reality, chances are slim you make it into another fund based on your profile and this could be a good starting point. If you're interested in venture, analyzing the funds could be cool. If it were me, I'd do it.
Thanks for sharing. By GE you mean General Electric? What kind of a role did he do there?
Growth equity. Sorry
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