VC versus Public Equity

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Determined

1mo

Most Helpful

I'd suggest asking yourself these questions given that both avenues have very different success criteria that you may or may not be well suited to achieve.

What types of problems do I enjoy solving?
What skills am I naturally predisposed towards developing?
What am I categorically bad at?

For each of these roles that you're considering, map out their requirements and see if it aligns with your answers here.

The challenges of VC relate to pattern matching, gaining people's trust, and gaining conviction with minimal data -- Do I like these types of problems?
The role demands someone who's skilled at building interpersonal relationships, can evaluate markets, and communicate with a high level of clarity and confidence -- Are these skills I want to develop?
You will fail in this role if you don't like interacting with people, you're highly pessimistic, require lots of information before making a decision, and aren't comfortable with ambiguity -- Do these line up with my shortcomings?

The challenges of AM are primarily sifting through lots of data/noise for signal, differentiating between a good company and a good stock, and assessing upside/downside risks for key catalysts -- Do I like these types of problems?
The role demands someone who's skilled at identifying sentiment and fundamental drivers, can back up assumptions quantitatively, and can convince a PM to make changes to the book -- Are these skills I want to develop?
You will fail in this role if you can't process lots of inputs quickly, you're unable to maintain a consistent investing framework, and cannot sit down and focus on solo work for extended timeframes -- Do these line up with my shortcomings?

I worked in ER at the beginning of my career and spent a lot of time with our AM clients and after that I left to join a later-stage (series B -> pre-IPO) VC team.

AnalystAddict

1mo

This is amazing, thank you!

Would it be alright to ask what were the factors for your pivot to VC and if it was challenging?

Determined

1mo

Pivot to VC was purely opportunistic. I was deep in the MM HF interview process. Heard from a friend that there was a role was open at a top firm that valued an ER background so I found the search firm they were using, reached out and then hit up a bunch of people that had either worked in the role or interviewed there to get an interview. The process was very rigorous and I ended up having 10 interviews before I got an offer.

Hankers

1mo

Regarding VC and whether there is as much systematized rigor around analysis and model-building like in PEAM, it depends. If you join a seed or early-stage venture firm, there may not be. The startups that these firms evaluate usually have little to no traction and/or data to evaluate, given their early stage. You're often making investment decisions with a lot of emphasis on your evaluation of the team, the tech they've build so far, and your analysis of the market potential. Later stage firms (B, C and beyond) will often be more systematized in their thinking. But firms tend to operate within their own frameworks and investment strategies, and not all behave the same.

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AnalystAddict

1mo

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