Corporate Venture Capital or IB?
Short background
I am finishing my MSc this summer at a well-known European university and have ~1.5 years of internship experience at boutique IBs (1 year as a working student, 0.5 year as a full time student). I have an offer from a corporate venture capital and a tech-focused boutique IB in the DACH region, but I am having a hard time choosing between them. Pay is comparable.
Corporate venture capital
- Analyst level position
- Venture Capital Arm of a leading insurance group
- Fintech, Insurance, Digital Health focus
- They have around 150-200M EUR in AUM, they will be launching their next fund when I would start, which means I would be able to see through a full lifecycle of a fund
- They were established ~5 years ago
Boutique IB
- Not sure how big the deal sizes are, but I'd say around 20-100M EUR max
- Focus on various kinds of growth-stage tech companies
- Let me know if you need any other info
My thoughts
Long term, I would definitely like to be on the buy-side, but I am wondering how much would the fact that I was at a corporate VC instead of a traditional one limit me career-wise in the future. I'm also not sure how much IB experience would be considered "enough". I already have 1.5 years M&A experience (although internship), so I'm not sure whether I should still work on building my CV, or just jump straight into what I would like to do in the long-term anyway.
I have worked in both CVCs and pure IB. Personally, I prefer the real banking culture, but that might be me because my comp, culture, structure, etc were not comparable at all back then.
disadvantage of CVC, in my opinion:
- you are still working under the global culture and guidelines of the firm, not of pure banking culture
- comp was lower for me in the long run, therefore if money is the goal I'd pick IB
- weaker processes around deals within CVCs or different processes you/I/anyone might disagree with
- I would say exit options are worse in a CVC (unless you really like the industry you are in and want exposure to that specific exco)
but there are also positives ie lower hours, less stress, maybe nicer people, less politics, etc
I would only plan to stay at the CVC for 2-3 years max, but I'm quite sure I want to stay in the VC/growth equity space in the long term. Do you know what the exit options are like from CVC into these spaces? Would IB or CVC position me better for these kinds of opportunities?
If I pm you the CVC and the boutique IB companies, could you give me your opinion on them?
If that CVC regularly works with other VCs, if they allow you to attend key events and you can meet all key people... then yes, it might be a good way to find VC opportunities. I would say I met almost no VC people during my IB days, the deals were much larger.
You can PM me anytime, but I can't guarantee I know the CVC or the insurance space (I have never worked in insurance before).
You say you want buyside, but what kind of buyside? If you're thinking you'd want PE/HF/AM optionality go IB. If you know you want VC in the long-term I'd personally go CVC.
Im interested in VC or growth equity. Which option do you think would be better for the latter?
It can be a toss up, because growth equity could be very technical or very BD-ish depending on the shop. Technical being more favorable to the IB background, a more sourcing heavy role being maybe slightly better off coming from VC. Broadly speaking I think technical skills are pretty easy to pick up if you're willing to put in the reps.
If you’re sure that venture/growth is right for you - I would definitely take the CVC role, unless the firm is an elite boutique. Breaking into VC is very difficult and there’s no guarantee that it will be easy coming from a boutique IB. Whereas it’s much easier to move from a CVC to a VC IMO.
Some CVCs are highly regarded and act like proper VCs, while others are fairly dumb, misaligned, cyclical investors. Questions to consider that will directly impact exit opps within VC: does the CVC operate more like a financially driven VC or a corp dev arm? Do they take board positions and would you eventually be able to get that exposure? Are you investing off balance sheet or out of a fund structure? Does the firm require a contract or internal business sponsor to invest in a funding round? How competitive are their portfolio co’s and do you think they’ll have some serious exits? Does the firm lead rounds?
Thanks, I appreciate the answer.
Does the CVC operate more like a financially driven VC or a corp dev arm? - Not sure about this. I would guess they are financially driven.
Do they take board positions and would you eventually be able to get that exposure? - They do, and based on the fact that associates are board members in some of the portcos, I think would get exposure too after a while
Are you investing off balance sheet or out of a fund structure? - 90% sure that its out of a fund structure
Does the firm require a contract or internal business sponsor to invest in a funding round? - Not sure about this.
How competitive are their portfolio co's and do you think they'll have some serious exits? - They have some pretty good companies, one just became a unicorn. They only had 2 exits though so far out of which one was a failure.
Does the firm lead rounds? - Yes, they lead around 50% of their investments so far according to crunchbase.
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