Big Four Deal Advisory --> M7 MBA --> PE or VC. Possible or am I being overly optimistic?

I'm currently at a good non-target university (One of the UCs, but not UCLA or UCB) with a job offer to go full time at a Big Four firm in Deal Advisory in the Bay Area. I'm viewing Deal Advisory as a chance to learn FDD and improve my resume for a few years before potentially applying to grad school and transferring into PE or VC.

Do I have a chance to get accepted to a M7 MBA program? I interview well, have a 3.8 undergrad GPA and expect that I'd do fairly well on the GMAT (99th percentile on SAT).

If I were to get accepted to a M7 program, would it be feasible to transition into PE or VC?

My goal here is to get into PE or VC without first having to do IB. How feasible is this plan?

 

To be completely honest, it’s definitely possible if you’re looking at very LMM PE firms, but close to impossible if you’re looking at anything larger. To be honest even LMM funds may be difficult. Post-MBA PE is typically reserved for those who have done Pre-MBA and even then people still have difficulty finding Post-MBA PE jobs even with previous PE experience.

 
and0ne101:
To be completely honest, it’s definitely possible if you’re looking at very LMM PE firms, but close to impossible if you’re looking at anything larger. To be honest even LMM funds may be difficult. Post-MBA PE is typically reserved for those who have done Pre-MBA and even then people still have difficulty finding Post-MBA PE jobs even with previous PE experience.

I realize this is over a month old now, but this comment is likely correct. If you think about what experience and skills you bring from FAS/TAS to PE, it is somewhat limited in scope and breadth compared to those with prior PE experience (obvious) and those in IB and Mgmt Consulting.

That being said, I've seen LMM shops hire these individuals within the past year or two because they need someone that understands the nuances of GAAP: revenue recognition, inventory adjustments, etc. are important topics and at times, those firms may rely on subpar external advisors (cost reasons), so having in-house expertise can be quite valuable.

 

Dude, relax. You're doing fine.

I'm not a PE expert plus I'm based in Europe where funds aren't as stubborn as in the US, but I'm someone who's doing Big 4 Deal Advisory --> MBA business schools">M7 MBA. Big 4 isn't IB where headhunters call you with MF opportunities 3 months into the job (admittedly they do call with lots of shit jobs). That being said, I started pushing for buy-side opportunities after 2 or 3 years and ended up with an offer from a $5+bn fund. (I didn't accept it.) While it wasn't KKR or Blackstone, they're a leader in their niche (think infrastructure, real estate,...). So it is possible in Europe at least.

If you really want to do classic PE, you can still:

  1. Recruit for IB next year and go from there.
  2. Directly push for PE in a year or two.

Option number 1 is the safer bet, but you do lose some time. Option 2 is the faster but riskier one (maybe someone with US PE experience can elaborate on how feasible this really is).

Non-PE --> MBA --> PE is quite hard to pull off, so the MBA will not put you in a better position. Try breaking in before your MBA if you're dead set.

 

I'm not in VC but spent some time networking around the space prior to my current gig (BD for PE).

You don't need an IB background to get into VC, especially the earlier stage you go. The skillset needed is much more relationship management and general business strategy sense than it is "financial engineering."

However, for that reason, accountants are often a bad fit for VC (along with the perception by entrepreneurs that they're rigid / conservative / dull, etc.). If you are focused on VC, I'd recommend trying to go from your Big 4 to a management consulting role and/or an early stage startup.

 

You're all morons. You can literally do anything as long as you network and hustle. You want to be in VC in ~3 years? start writing down every company that catches your eye. Start a forum. Write and be noticed. You think your FDD experience will be overlooked? Go to a growth shop and source all day.

 

Everyone on here has given him advice for how to best position himself for a job in VC / growth. Big 4 is not the ideal position for VC or growth - anyone would tell you that. Can you please tell me who is being a moron on this thread, as everyone I see has given very sound, well-reasoned arguments for why an extra step may be required to make the jump. Fetch me one bio from a top VC / growth shop of an associate that came straight from transaction services and on my life I'll buy you a copy of Daniel Goleman's Emotional Intelligence. By your logic, I can be walking on the moon taking space samples next year - just gotta network.

"Rage, rage against the dying of the light."
 
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Venture and buyouts are two different beasts. A lot of people outside of venture seem to view it as simply being private equity but earlier in a company's lifecycle. While that may be true technically, in practical matters it's not.

I've written extensively about how to get into venture before. Here are a couple of other posts I've made on the junior roles (analyst and associate) in VC: 2015, 2016, 2017. Also one I made on "Private Equity Vs. Venture Capital In 2018".

For PE, I'll echo the first reply in this thread. It's pretty hard to succeed on the road you've proposed.

The immediate point is that it's a numbers game. You can do this math yourself. Look at every M7 school's (a) incoming class profile / (b) career report for the graduating class. Note that most schools don't publish the career report until 12 months after graduation so they can show higher placement percentages.

This means you should zero in on Class of 2017. They graduated in June 2017 and the report got published in summer 2018. Scroll back and look for the incoming class profile (usually posted in June 2016 three months before everyone shows up on campus).

What you'll find over and over is that something like ~20% of each incoming class is from PE/VC while ~15% of that same class places back into the industry. It's a game of musical chairs. Some people get left without a seat.

The odds of convincing a fund that's recruiting for a partner-track role that will be expensive to them on both a salary and carry income basis to forego someone who did the tried-and-true banking-to-buyouts path at brand-name shops in favor of you are not high at all.

The second point is whether you'd have the skill-set to succeed if you somehow did get the role. I'm a huge proponent of always pushing yourself to reach for things at the margins of your current ability (otherwise how do you grow), but I sure as shit marry that with a pragmatic assessment of myself (domain knowledge, ability, interests...).

If I didn't, I'd expose myself to reputational harm and economic loss.

You can define reputational harm two ways. Most people think of it more typically as someone having an actual negative view of you. You can also think of it more expansively as someone having any view of you other than very positive. Numerically, if the range was neg-5 to pos-5, the first definition would be any view of you from neg-5 to 0; the second definition would be whatever threshold you set for yourself (e.g. anything other than pos-3 to pos-5).

My deal flow, general industry perception, and overall relationship capital is entirely based on how people perceive me.

Say I make a minority investment in a fast-growing life sciences business that has a technology component. I may understand a ton about technology businesses if that's my focal area, but if I'm not a trained scientist with some measure of domain expertise in the area of science the business is built around, I probably don't want to press for a board seat if a specialist fund can use that seat better than I can to drive equity value. If I did push for it, did soak up the last seat, and did run my mouth in every board meeting and highlight how little I know relative to other people in the room, that's negative for me on both reputational and economic dimensions. Every other fund on the cap table, founder or executive from the company, and service provider (lawyer, perhaps banker) would be able to accurately say something less-than-flattering about me if prompted in the future.

The point I'm trying to make is that you should be thoughtful about what role you put yourself in, because the further from your current ability you reach, the progressively easier it is to hang yourself with the rope you asked for.

A smarter path might be to try to network really aggressively for an investment banking, family office, or middle market private equity role after you finish your first year in Big 4.

Investment banking doesn't need much said about it. With your grades and a Big 4 name at the top of your resume you have pretty good odds at getting into one of the brand-name shops in SF/Menlo, at which point you can recruit for pre-MBA private equity opportunities the same way every banking analyst does. This is thus the equivalent of doing three years as an analyst, which some of the smartest guys I know did at the start of their career. They were being judicious both in choosing their next role and in making sure they were prepared for it.

Middle market private equity is also self-explanatory. If you can get into a pre-MBA private equity role, you're in the best position possible for post-MBA private equity. The only wrinkle here is that the type of shop that's likely to accept you directly from a Big 4 role probably does not correlate well with consistently strong placement into the HSW MBA tier.

A family office may be the less conventional but higher-probability outcome. Family offices recruit in weird ways. Some go through headhunters. Some pluck from the ranks of the service providers they use. If you wanted to go this route, spend some energy finding all the family office community events in the Bay Area. There are a ton. Start going to them all. Read up on the space. Learn all the topics and issues: the current focus on generational transition to Millennials (who care about ESG and impact a lot more than their predecessors), digital security and privacy, digital assets (the broader world of blockchain), the increasing push toward direct investments, etc. If you are sharp, polished, and proactive and you don't trip over your tongue when talking to people at these panels or mini-conferences, it's not hard to get an email dialogue going where someone's eventually going to ask you about "the next steps you've thought about in your career".

The upside of this path is that a lot of smaller or mid-sized families are dramatically less prestige-oriented and more relationship- or individual-oriented, so your profile matters dramatically less than it would to a big buyout shop. Secondly, this will open every path up to you in the future. Private equity, venture, business school, or a different family office.

Good luck.

I am permanently behind on PMs, it's not personal.
 

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