Corporate Development vs Venture Capital
Hi All,
I'm currently an investment banking analyst and am starting to think about exit opportunities. Through a few years of work experience, I've decided on a few priorities/things I would like in a future job:
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I've never been the most comfortable with numbers and actually find modeling relatively boring as an analyst, so would preferably want something that isn't that quantitative (I actually enjoy creating marketing materials more and crafting a pitch centered around knowledge of a company). This is partially the reason I find MM to upper MM private equity unappealing and haven't been looking around for those types of roles
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Would like something less than 60 hours a week
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Something that is in less danger of being automated/disrupted by technology (i.e. not asset management, or anything market based), such as M&A or corporate investing, which is more governed by relationships
So far, the career paths that mostly seem to fit those criteria are corporate development and venture capital (possibly growth equity, and real estate private equity, although the latter I am more unfamiliar with). If anyone had any further input or ideas that would be much appreciated.
Thanks.
Hi Lazara, any of these threads helpful:
Calling relevant professionals! eekonomist Mitchell-Bayne Sam-Gulland
Hope that helps.
Dude. Both CD and VC involve modeling, 60+ hours especially on live deals, and getting comfortable with your numbers. You are investing $XXM of dollars after all...
If you want to do more marketing / pitching, try IR, Marketing, Biz Dev or early stage VC (piggy back investors)
VC giving you easier hours is a myth. VC does however give you easier modelling as you're mostly reviewing models sent in by investee companies, or doing portfolio management where you're reviewing FP&A or management reports. As such there would be lesser need to start the models from scratch but that is possible as well if the partners or yourself decide that the projections sent in are too aggressive. Also, usually they split the work between analysts, associates and ADs, Usually you are supposed to be good at writing pitchbooks and doing modelling, but there are cases where they split the work (1 analyst on modelling, 1 associate on the pitch, AD on overview etc.)
Source: 1.5 years in a startup, 3 years in a boutique VC
Look at business development. You need the ability to look and evaluate other company's business models, financial acumen but not heavy modeling, instinct, persistence, and social skills. you likely have many of these raw characteristics from your IB experience.
I'm in growth equity VC and would caution against it if you don't like modeling and numbers. That said, seed/series A may be more up your alley or even jobs in accelerators/incubators. GE is an interesting intersection where you need a combination of relationship skills and financial know-how while early stage VC is more on the relationship end and about market sizing and judging on qualitative factors.
As a poster mentioned earlier, VC having better hours is kind of a myth and is a function of the job becoming more of a lifestyle than just a job. Those that do well really breathe the ecosystem and enjoy getting coffee/dinners with entrepreneurs and talking about trends in the space for fun.
Bizdev definitely sounds more along your alley though. I also heard good things from people doing Operations & Logistics at Uber
^ Agree with above on VC being a lifestyle. Even when you have more “downtime”, you generally need to shift gears going from live deal to business development / sourcing / networking or relationship building through introductions or helping startups in ecosystem / thesis-development or research (getting an update on the market and opportunities). And because it’s constant, you really have to enjoy it.
OP - per others have said already, there’s modeling in VC. There’s less of it if you’re earlier stage because there’s less information to forecast and model, so maybe that’s something to consider. On the earlier side it’ll be more driven by your thesis on market trends, and whether you think the management can execute on a vision. The later stage you go, the more info you have on the firm (and how they perform in market vs peers), and therefore can model. That said, it’s not that arduous... potential portfolio companies typically will have some operating model (of varying degrees of detail and complexity) and you’re just reviewing it and tweaking with your assumptions for the more modest or downside scenarios. And it’s also just figuring out their cash burn. There’s also cap table analyses, which is not modeling, and fairly straightforward... but occasionally you’ll run into things like treatment of convertible notes and how they impact pre-money valuation (depending on whether investors and company agree on when the conversion happens when there’s a fundraise).
Anyway, Corp dev also has modeling too. Maybe consider something like Corp Strategy - which doesn’t have much modeling (unless they double up as Corp dev) but is more focused on enterprise and business strategy and tactics. Kind of like an in-house consulting team. Corp strategy can (sometimes) also be a bit of a swat team that works closely with business unit leaders to develop gameplans on certain intuitive or projects. Though YMMV.
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