AMA (Ask Me Anything): IB to MM PE to Strategy (In-House)

aw.ib's picture
Rank: Baboon | 130

Background
Hey WSO, I've been a longtime lurker (for some advice, but also for the laughs) and thought it's probably time to contribute back (as I also have something somewhat valuable to contribute now). Some general background about how I got where I am below:

  • Target undergrad (top 20 university)
  • Summer intern at EB IB (received return offer)
  • Returned FT at EB IB and stayed for one year before transitioning to MM PE
  • Stayed several years at MM PE before ultimately moving on to do Strategy in-house at an established start-up (>$1bn valuation)

Ask Me Anything
I remember reading on the forums when I was in school to see what working in the industry was really like or getting a few laughs once I started working. Happy to answer any questions about my experience (hopefully it's somewhat different than the traditional path), whether that's the recruiting process (IB or PE), on-the-job advice, reasons for switching careers, etc.

Comments (50)

Aug 6, 2019

For someone who got on the IB track late and didn't intern at an IB firm over summer, what are the best steps to landing a full time offer?

Aug 7, 2019

This goes without saying, it'll be difficult to recruit for full time positions in IB without an internship (I.e., lack of IB specific experience, no return offer to leverage against other candidates, etc.) but it's definitely not impossible.

Personally the best approach, assuming you have the pre-requisite credentials (good school/gpa, interest in finance, some relevant experience though not IB), is to reach out to friends/acquaintances who just finished their internships and figure out which firms will have openings for FT positions. It's important to try and get a lay of the land before any process kicks off - from my experience, FT recruiting usually goes off referrals and starts almost immediately after internships end.

Aug 8, 2019

I am doing the same right now. I started lining up every coffee chat I could as of Monday and have a list of 20-30 Associates and VP's who are allegedly looking to fill slots.

I am coming from the industry I am targeting and have a lot of M&A experience from companies who operate in that space, so I don't think I am a stretch. And I am graduating from a top 5 school that doesn't usually go to IB in my industry in our industry 'Capital'.

I know it will be hard. A friend of mine who killed it this summer at an elite BB this summer says I am a jackass for trying. Gotta try, right?

Aug 8, 2019

Your friend who killed it is a dumbass then.

Plenty of people in the industry who learned in their own time, networked their asses off, and broke in.

Keep ripping it.

Aug 6, 2019

Thanks for doing an AMA.

What was your motivation to pursue strategy at a startup versus other options, sticking in PE, MBA, etc.

What has your experience been like so far working in strategy?

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Aug 7, 2019

Thanks for the question. To be honest, I think it's a natural progression in my career - I've always thought I'd be somewhat differentiated if I had the full breadth of finance experience (advisory, investing and operational).

I debated (only a little though) on whether I wanted to possibly transition to a larger firm to execute bigger buyouts, but ultimately I really didn't want to jump through hoops and go down a full recruiting process. I think I knew I always wanted to move in-house eventually - I had a very fulfilling experience working with a few portfolio companies and that sort of reaffirmed it for me (it was something that I was good at and enjoyed doing).

With that being said, I obviously had some concerns making the move - all-in compensation, forgoing my MBA, success rate of the start-up, etc. Ultimately, I thought this was a compelling enough opportunity - competitive comp., seasoned management team, proper fundraise, among other things.

Aug 7, 2019

Makes sense, thanks for the response. Good luck in the new role.

Aug 6, 2019

What kind of positions at start ups would you say are more challenging and worthwhile pursuing? Similar to other industry roles (strategy, corp dev, strategic finance)?

Aug 6, 2019

Comp at your current strategy gig? And city (or at least tier) would be helpful for context - thanks!

Aug 7, 2019

Tier 1, West Coast.

Annual cash comp is 80%+ of LY all-in comp in PE, but I received significant equity.

Aug 7, 2019

At least 200 then right, assuming 250 all in which is probably conservative. Honestly a lot better than I would have imagined.

Aug 7, 2019

What is considered significant equity? I would think that a start-up valued over $1bn would be far enough along that you would only get some options with limited upside...unless you're in an executive role?

Aug 6, 2019

Do you wish you had started your career at a start up instead?

Aug 7, 2019

Interesting question. Most likely not. I don't really see finance as the premier component of many start-ups so I think experience for my younger set would've been limited. If I joined a start-up initially, I'd say I'd want to be focused on product as that's where a lot of the action is happening early one.

Aug 6, 2019

Thanks for doing this! Would you say that it is better to take more relevant Finance and Accounting classes in college and gain some knowledge, or is it better to take easier classes and boost our GPAs for buy side/corporate development/other job recruiting? Appreciate it!

Aug 7, 2019

Undoubtedly, I think you should always take classes that interest you - it usually leads to better grades. With that being said, I think your gpa is a key factor to securing a job so do what you can to keep it up. Quite frankly, a finance job isn't the hardest job to attain - lawyers need school and the bar, doctors need school and the MCAT/boards, etc. - getting into finance simply is being able to get through the door. Nobody could care less if you have a 4.0, but they may care if you have a 3.3..

Aug 7, 2019

Thanks for helping out! In your opinion, what is the best position for sophomore summer to break into BB or EB IB in junior year?

Aside from BB IB which is extremely competitive for sophomores unless diversity, could you rank the options to pursue between local PE and HF, local boutique IB, BB PWM and S&T, corp finance, etc?

Aug 7, 2019

It's been a while since I've interned and recruited for internships so take this how you will (others pls feel free to chime in as well). A sophomore internship at an IB/PE/VC isn't a must, but it certainly gives you a little edge on paper when it comes time for recruiting. In reality as far as I'm concerned, no one really expects to have done anything substantial. When it comes time for jr. year summer internship recruiting, all I'm looking for is a competent individual who is someone I can bear to spend 12+ hours with. To be competent, I think it generally means you've 1) taken an interest in finance and have studied it (so if I test you on the book or about the latest news, you're able to hold a conversation and form coherent thoughts), 2) have some knowledge of the job (long hours, quick turnarounds, etc.) and 3) is comfortable being in different scenarios (might need to lean in on me for guidance but can overall be autonomous with enough time).

Side note: Frobe is one of my all-time favorite hoopers. Cudos.

Aug 7, 2019

Thanks a ton for helping us- Do you think name recognition is more important than the responsibility given in early stage of a career? Is it at a disadvantage to start off a career in MM vs BB?

Aug 7, 2019

All else being equal, yes. Similar to colleges, no one bats an eye if you go to Harvard, but questions could be raised if you went to BC/BU (which by all means is not bad).

If you go to a BB, you'll be able to leverage that for other opportunities (which are incrementally better). At an early stage especially, you're not going to have significant responsibilities so with that being said, a lot of your value is driven by the firm you're at.

If you're at a BB and basically doing nothing (which I'd be surprised by) then your experience is likely not worthwhile. But I think you'd have to actively try to be doing nothing to really not have an experience to lean on at all. Whereas at an MM, you'd need to be having an extraordinary experience and be able to speak to it in order to assert your value

Aug 7, 2019

@balmainmaybegucci cant reply to your question for some reason. Response below though.

Hard to say which is "more challenging and worthwhile pursuing" as I think that's all up to personal preference.

Personally, the things that interest me most are executing new initiatives and building the product. Obviously my background is in finance and I still do a lot of that, but I also think strategically about where the company is today and what the goals are tomorrow, few months from now and later - this gives me the opportunity to work with other teams and learn more about the business from the people who know them best (product, marketing, etc.). Everyday is trying to understand if an idea is feasible and worthwhile pursuing.

If you come from the investing side, I think generally you'll lean towards strategy in somewhat (whether it's a mix of finance and strategy or purely strategy) as you bring a certain skill set and thought process. I think Corp. Dev. is equally interesting, it's obviously acquisition-focused and looks outside to generate value whereas strategy is trying t generate value internally.

Aug 7, 2019

How has the day-to-day work intensity and work/life balance of the start up compared to your past experience in banking/PE?

Aug 7, 2019

Definitely better/more relaxed lifestyle than IB, but comparable intensity to my last role in PE I'd say. This may be that the Finance and Strategy teams here are all ex bankers, consultants, HF, etc. people. Culturally, I think everyone is more relaxed and outgoing though.

On a day-to-day basis, there's always something new and we're constantly looking at new projects and prioritizes the most important ones to execute. I'd say the work pace is similar to before but you're all motivated equally since we're trying to build something the best we can (also, our equity is tied up in it.. haha) The work is also different - I'm not necessarily doing DD to find flaws/opportunities but working in concert with other teams to help them understand the financial impact of their decisions and what strategies we may need to change.

Most Helpful
Aug 7, 2019

Thanks for the AMA! Your path almost exactly what I'm considering, and it sounds like you've had similar thoughts around the move (comp, success rate of the startup, etc.) - so glad you made the decision. Would definitely love to hear your thoughts on the following:

  1. How did you end up getting to MM PE after a year of banking (and coming in as an associate?) considering the structured recruitment process of the industry? Why did you leave? Did you have any regrets about not finishing out your 2-year program?
  2. How many years did you stay at your PE firm? Was there a path upward if you wanted to take it?
  3. How was your experience in PE firm? What you liked / disliked about the job?

3.5 What learned skills you felt were most useful coming out of this experience?

  1. What did you find surprising about PE that you didn't expect coming in?

4.5 Did you have an idea of moving in-house before you started PE? What were your rationale for this?

  1. How did you ultimately find this opportunity?
  2. What were your thoughts around leaving PE for strategy, and ultimately got you comfortable with all the potential "upside" you might be leaving? (Esp if you have friends who thought you should stay in PE)?
  3. What do you do in your current role? How has your role changed as you worked at the firm?
  4. Skills one needed to have for your role, or to be able to communicate properly to the firm founders? What made you stand out? I'm assuming there aren't that many spots available nor many people applying for these opportunities with similar backgrounds, but please correct me if I'm wrong.
  5. What is your typical day like?
  6. What you like/dislike about this job? What did you find surprising about your current role that you didn't expect coming in?
  7. What are your thoughts about next steps? Stay with the firm until IPO?

Know I've put a lot of questions here, but really looking forward to hearing your thoughts! Thank you again!

    • 9
Aug 8, 2019

Wow! Lots of questions, but all excellent. I'll preface here to say I'll be light around on details for a few of these as I'd like to keep my anonymity - the finance community is quite small.

  1. I had actually seen several people in the industry do this when I did my summer internship, so I knew it wasn't impossible. However, I didn't go through any formal process. I actually followed a partner from my firm that I worked closely with. At the time, I will say I was pretty eager about the transition (still lived under the allure of being in banking) but I don't regret it - had a fulfilling experience working on interesting types of transactions. Looking back, I think because I was at an EB, I would've had a good shot at recruiting for a MF (if that was something I wanted). You just have to weigh your options at that point.
  2. Don't want to be too specific here, but <4 years (take that how you will). There was an opportunity for me to advance, at my choosing.
  3. Overall, I think my experience was very worthwhile. I got to grow with a job and eventually was able to test out things to figure out what I enjoyed and disliked. I also think the work/life balance was fairly reasonable - became autonomous and had a say in my own schedule.

Things I liked: Exposure to highly impactful people with specific expertise (partners, strategic advisors, management teams), developing process and critical thinking skills (understanding how to incentivize/move parties along and thinking strategically about the position we held), almost (if not all) the transactions I looked at were interesting to me (whether that was the sector or type of transaction we were doing).

Things I didn't like: The biggest thing for me was always thinking of the minimum return threshold and what the downside case could be. Understandable, we are investing to make a return and need to know in the worst case scenario, will we meet our hurdle. However, it just gets less and less exciting when a lot of what you're working on surrounds this. Ultimately, I made the move in-house with the belief that I'd be building towards a goal and that was the focus (not disregarding the risks/downside, but that's not what the focus of my work would be on).

3.5 Critical/strategic thinking, effective communication, interpersonal relationships

  1. The LPs that support your fund. At least when I first joined, I just kinda assumed we'd just have all this money to play with at our finger tips - that's wrong. There's a process to get funds each time, but there's also an inherent cost to it - yes, make returns to your LPs but you also have to maintain those relationships and that requires extra leg work at times.

4.5 Before PE, didn't really think about anything tbh. I was a banker and basically everyone wanted to do a 2+2 somewhere so I just looked at the next "2" as another checkmark to get. Eventually decided I wanted to move to strategy through my experiences in PE (working with PortCos, wanting to build something).

  1. Referral through a friend.
  2. Answered in a post above on my thought process/concerns about switching. In reality, I was actually more concerned about skipping out on b-school than leaving PE. The "upside" I was missing out on in PE wasn't too important to me - I knew early on I'd never really want to be a partner (thought process here is that the eventual next move would be to raise your own fund and I think that's where the train stops for me).
  3. Haven't been here long so difficult to say how it's changed. I've talked on another post what my role entails. I'll always be intimately familiar with the company's health and forecast, but I'm focused on helping other stakeholders think about the impact of their strategies and how to execute (competitive analysis, pricing or market funnel analyses, unit economics, etc., even headcount optimization). It's a lot of different hats but essentially the finance team in general is to be the beacon of truth in the whole company.
  4. Skills I learned noted above. I think this is usual for most jobs a couple years out, your technical abilities shouldn't be questioned (i.e., modeling). People are more interested in understanding if you've gained experiences and developed critical thinking skills that would be value-add to what they are already thinking. It's a mix of being able to think deep and a step beyond what is asked - like if a product makes you a + ROI, how should you scale? Technically (from a book), you'd scale as much as you could until the ROI is zero (no incremental benefit), but in reality, you scale based on how the business is constrained (headcount/ops, facilities available, liquidity/financing, etc.).

I think I stood out in my interviews by having 1. a non-traditional path, 2. differentiated experiences and 3. ability to critically think about a problem.

  1. Hours: Arrive around 9, leave by 7 (typically). Normal day starts out by checking emails and responding to those with the highest priority + getting coffee, walk around/chat before setting up for the rest of my day. I'll spend the majority of my days doing a project (modeling, research, building a deck, etc.) before going to a team meeting or meeting with the stakeholder to discuss progress, assumptions, questions, etc. Wrap my day up by either sharing finished product or just sending quick notes to ppl noting the progress of things.
  2. Nothing I dislike so far. The biggest thing I found surprising was how intelligent and open the culture was. No one cares what you're doing really as long as things get done. Everyone is treated as an adult - there's no face time rule. And it's amazing working with highly intelligent people on a day-to-day basis. I was actually worried about this because IB/PE people are all generally pretty smart and on top of things and I just thought that might not be the case working with ppl from other industries. I was mistaken - they've hired top talent and everyone is on top of their game (ppl will follow up, let you know progress, not ask for random things to get made, etc.). It feels like everyone is well motivated and working in concert - that just boosts moral tbh.
  3. Difficult to say. Will definitely stay for a few years (need my equity to vest!). I'd only leave if say we got acquired early on (early payout) or if there was an opportunity for me to be like the head of a team at a ballooning start-up. Otherwise, I'm more than happy rn to grow into a more senior role here.

If you made it all the way to the end of this, I commend you. Lost some traction mid way through but hope this helps!

    • 5
Aug 7, 2019

Thanks for doing this.

Do you think it is feasible for someone with a few years of experience primarily in valuation and transaction advisory at an EB/BB to move into MM PE without ever being in a true sell-side role?

Also, is the CFA a worthwhile time commitment for someone looking to get into MM PE?

Thanks

Aug 8, 2019

Yes, I'd think so. Obviously a little more difficult, but if I was in your shoes, I'd try to get involved on one process just so you can have some exposure and know the ins-outs. If not, you could probably transition out of your group and do 1 year to learn the process then you'd have equal experience to all other candidates.

I feel like the CFA has lost some of its glow over the last few years. I'd say it's worthwhile if you feel significantly disadvantaged (no harm at that point). Otherwise, instead of working in the industry and studying to pass all 3 exams, you could probably just switch into a group/lateral to a position that puts you on an equal basis with everyone else.

Edit: I should note here that for "MM PE," I essentially limited my thinking to LMM firms as that's where you'll likely have the best shot. I think UMM firms will be more difficult as most of them run formal processes.

    • 1
Aug 7, 2019

Thanks for all the questions! Didn't think I'd get so many being it's my first AMA.

Will continue to provide responses later tonight. Been doing all this on mobile, so a bit difficult to answer long/multiple questions.

    • 1
Aug 7, 2019

How did you find your startup opportunity? Were you interviewing with several opportunities for an exit?

    • 1
Aug 8, 2019

All opportunities I've ever pursued have been through referrals (whether personal or introduced through a friend/colleague). This goes without saying, but I think your network is probably one of the most important factors when looking at a new opportunity.

I was parallel processing several opportunities but this was the leading one - made the final decision effortless.

Aug 7, 2019

What title do you or other peers who left PE general have at a startup? Are you at Director leading a team or more of a manager?

Aug 8, 2019

Not a director leading a team. I think when most people decide to switch careers from IB/PE, they vary anywhere from Analyst to VP. Generally the titles line up similarly - Analyst to Senior FA/Associates to Manager. When you are senior enough, you're typically the "Head" of a division or hold a management position.

Aug 7, 2019

any advice for a junior in college looking to go into VC/Growth Equity down the line? Recruiting for tmt ib positions now. Also how much does the group matter/is it ok to start at smaller, but still reputable tech group (lower BB/ solid Boutique(not EB))

Aug 8, 2019

I didn't specifically do VC or growth equity so take this as you will.

First, VC/growth equity doesn't have to be tech. If you'd like to do tech VC/growth, then yes, TMT IB will likely be the best route.

Second, regardless of the group/firm you're in, it's possible to get a VC/growth role - just depends on the type of person you are and quality of firm you want. A little confused with how you phrased your group - if it's a BB, it's a BB. No need to worry unless you don't have real deal experience.

From a recruiting POV, people only care how you spin the story to fit their narrative. Obviously being at the top group at the top firm gives you the best chance, but not everybody is going to have that. Importantly, I think funds want candidates that come from a reputable bank with relevant deal experience - that doesn't necessarily mean you need to be from GS, but it definitely helps if you're in a coverage group at a good bank and matches the sectors the fund you're interested in invests in since your actual deal experience/knowledge will be applicable.

Aug 8, 2019

Thanks for the advice man. One of the most helpful amas I've seen here!!

Aug 7, 2019

Is it easy to exit into corporate/start-up roles from MM PE? I plan on doing the 2 + 2 path, but wanted to know what options lie after that.

Aug 8, 2019

I wouldn't necessarily characterize any process as "easy." The opportunities you're likely seeking after your 2+2 are highly competitive and coveted positions - Strategy and Corp. Dev. teams are kind of a luxury for most companies so naturally they'll be comprised of high caliber individuals.

In my opinion, I will say it would've probably (just my intuitive feeling, not 100% sure on this) been more difficult for me to jump to a MF. I'm sure I could have lateraled to an incrementally larger UMM fund, but I'd think going multitude of billions higher is more difficult.

From IB/PE/HF + consulting, I think there are an almost infinite number of exit opportunities you could pursue. I think the reputation and skills you build from those careers goes without saying, but if you wanted to make a drastic change, you'd likely have the intellect/preparation to do so - I've seen people do coding bootcamps on the side and become programmers/software engineers. The more traditional exit opps that are finance related would likely be FP&A, Strategy, Corp. Dev., Product Manager.

    • 1
Aug 8, 2019

thoughts on strategy vs corp dev

Aug 7, 2019

Podcast!!!!

Aug 8, 2019

Actually never listened to a podcast from WSO, gotta look into it.

Podcast possibly for my next AMA - hopefully I'll have tons more perspective then!

Aug 7, 2019

Kill marry fuck

Janet yellen Janet yellen Janet yellen

Aug 8, 2019

Do you think going the consulting route would have been better for strat roles? I'm currently debating between IB/Consulting and wanted to know what your thoughts are.

Aug 8, 2019

Yes and no. Consulting is obviously more relatable to a Strategy role so you inherently build skills for it. However, I would pick the job that most interests you - for me, that was banking. Don't get me wrong though, when it came time to recruit for a Strategy role, I prepped like a consultant (if not more) - I read Case in Point to make sure I trained my thought process and spoke with my friends from McKinsey, Bain, etc. to make sure I grasped how they thought about problems in the real world and could learn/apply to my own.

If Strategy is something you want to do, you'll learn and prep for the skills required for it regardless of the specific finance industry you're in.

Aug 8, 2019
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Aug 8, 2019
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Aug 9, 2019
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