Downsides of PE VP Roles

Hi Everyone, 

Posting this from a burner account for identification purposes.

A bit of background

I am coming to the end of my first associate year at a reputable MM PE firm. Recently, my firm offered me a third year as an associate, with the potential to come back post-business school as a VP to the extent that the firm is hiring. The VP role would also put me on a partner track. While the VP spot is not guaranteed, the firm has experienced really rapid growth since inception ~15-20 years ago and I was told that a VP spot would be 90%+ certain if I did three years as an associate and then business school. Further, in the 2nd half of my 3rd year, they would notify me if the spot would be available, so I can hit the ground running in business school if I need to recruit. 

My current thinking

I can leave to go to business school in 2 years, if I wanted to, but given the potential to skip the VP recruiting cycle, the idea is very attractive to do 3 years as an associate and just come back after a b-school stint. That being said, I do not love my current role. While I have closed a platform already, and am close to wrapping up a second in the next 2-3 weeks, the past year has been a bit of a let-down in terms of expectations. That being said, I have never been in the shoes of a VP, and want to gather more information about the role itself. While I know the day-to-day and deal-related tasks, what do most VPs struggle with, especially at larger MM shops? What are the worst parts of the role and for those of you that have committed for the long term, what outside aspects of intellectual fulfillment (and probably money) convinced you to do so?

For context

If I ultimately choose not to stay in PE to try to become a VP, I will probably leave for business school after 2 years as an associate. 

I realize this is an extreme 1st world issue, but want to go into the decision with my eyes wide open. Thank you all for the consideration and thoughtful answers. 

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Comments (17)

  • Associate 2 in PE - LBOs
May 17, 2021 - 12:03am

Interested. Good question. I'd be curious if you could expand on what elements were let downs so that people can maybe compare and contrast those to expectations of the VP role.

  • Associate 3 in PE - LBOs
May 17, 2021 - 11:45am

As far as downsides, it is arguably a tougher role than the associate position.  While you can step away from much of the actual work creation, you are entirely responsible for the quality of the work product.  Take that and add on quarterbacking the deal (including managing third parties), plus more involved portco management, and you can quickly find yourself underwater if not delegating efficiently. 

Other downsides include increased travel for deal sourcing/LP meetings/board meetings and pressure from underperforming portcos given much of your comp potential is carry-based (as an associate all you really care about is the fund not blowing up).   

Some insight a partner gave me - while the hours in the office decline as you move up, the job increasingly becomes 24/7 and the ability to fully unplug decreases.    

  • VP in PE - LBOs
May 17, 2021 - 12:56pm

Other poster (Associate 3 above) has outlined the general pitfalls quite well and don't have much to add. Without knowing what you felt the "let downs" were this past year, it is tough to offer more specific data points-- I, for example, really enjoy working with my sideways portcos and got a chance to do so as an associate as well. As a third-year, I also got to lead 3rd party workstreams, quarterback sizeable add-ons, and spend more time working with a partnership that I valued as colleagues/mentors and friends. That said, I did not go back because of a timing mismatch/seat availability.

In general, I am a fan of taking a third year offer for (a) MBA burn rate mitigation and (b) the opportunity to step up into VP-lite roles if your firm offers that potential. (b) in particular, if backed up by a strong reference, can be a differentiator in MBA recruiting versus folks who just churned CIMs for 2 years (even though those folks were likely superior to me in business evaluation / model creation reps). Both of those are independent from the potential of a partner-track role post MBA, which, as you correctly point out, has material option value.

Two questions you should know the answer to [this may not be germane to your specific question, but I would be remiss to not raise]: (1) are there recent VPs who have followed this path at your firm? and (2) who would pay for the MBA if you do receive the return offer?

May 18, 2021 - 9:50am

I think this is the first finance comment I've seen from you


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May 17, 2021 - 3:02pm

So as far as challenges of being a VP go, I would say the biggest is this is your last chance to grow up to be an MD. You're going to start sitting as an observer, maybe even taking board seats, and the pressure to bring valuable relationships to the table (sourcing) will increase too. This is your time to prove that you deserve a shot at principal so it is a very up or out role. 

That all being said, I don't think taking a third year as an associate will harm you in any way. As others have said, you will be able to take on VP-like responsibilities and learn in a low-risk environment. The additional experience will help you even if you decide you hate PE and want to go in a different direction. Happy to answer any specific questions. 

  • VP in PE - LBOs
May 18, 2021 - 2:06pm

If they want you after 3 years + bschool, they should want you with 2 years + bschool as well.

Most Helpful
May 20, 2021 - 9:53am

Since it looks like you're just looking for someone to tell you why being a VP sucks, I'll have a go at it to make your decision easier if you really want to leave. As a VP you are in the most awkward stage of your career where you have to transition from a worker bee associate to a revenue generating principal. When things get tough if you aren't bring in revenue you really think they are going to keep you over an experience associate who is cheaper and perfectly capable of deal execution? Fuck no. And yet if you are generating revenue by bringing in deals for the firm, you think they're going to give you credit for that? Lol gtfo bro. Some MD is going to show up as the subject matter "expert" and hijack your deal and relationships. And you have to go through an MBA to do all that? There goes $700k of potential earnings elsewhere in the meantime. As a VP you will realize that you are responsible for everything when things go wrong and just a helping middle manager when things go right. And if you want to try to make it ENTER OFFICE POLITICS. The big dogs aren't going to let you get up on their turf and hunt for the companies they hunt for. The fund has a mandate to invest in X Y and Z? Turns out the partners just happen to already cover X Y and Z. And fuck you if you are so stupid as to bring something tangentially related to the investment mandate. Want to spin out to another firm where you don't have to deal with this bullshit? Turns out you cost $500k+ and no one wants to pay for that u less you have closed deals under your belt.

May 20, 2021 - 2:35pm

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