Elite Boutique IBD vs. Sourcing Role at Well-Known VC/PE firm
Hey everyone,
Currently deciding between 2 summer offers:
1. IB at a boutique (think Greenhill/Evercore) and
2. Sourcing role at a solid VC/PE firm (NOT Summit/TA) with clear opportunity for advancement
Given that #2 is what I want to do in the long run, should I break in now? I don't mind calling up companies but I'm worried that I'll lack the skills I would have learned after 2 years in banking. FT pay would be similar for both companies. Let me know what you guys think.
This is a tough one. I have never heard of a sourcing role directly out of undergrad, and frankly it would make me a bit uncomfortable to be on the phones all day with entrepreneurs/CEO's without having some solid professional work experience under my belt. With that said, if you can avoid the pain of banking and think the prospects at the firm are good, I say go for it. I'm sure you will receive solid training and mentorship.
Perhaps Insight Venture Partners? Given that these are SA offers, take the IBD one - even though you want to do growth in the future, IBD will give you a more complete skillset so that you can eventually place into a range of places (from buyouts to early-stage VC), while Insight may pigeon-hole you into growth or early-stage VC (no real chance of buyouts or hedge funds).
Take the elite boutique. Greenhill and Evercore are two of those banks that provide some of the best modeling experiences on the street. If you have enough drive to go for VC later on, you'll get there with the IBD position on your resume.
Elite Boutique IBD.
Another vote for the elite boutique. Elite boutiques like Greenhill and Evercore will set you up for a broader array of opportunities in PE during PE recruiting season. You'll also get more formal training and build up a good foundation. Sourcing role may not give you the opportunity to build those skill sets and your experience would depend on if you could source a deal.
Evercore/Greenhill by far. It gives u a broader range of exit opportunities to PE/VC/HF.
While my gut reaction was to go with the Elite Boutique - OP specifically mentioned he was interested in growth equity/VC long term. I would be interested to get more specifics about the "clear opportunity for advancement" but I think some of you guys are being a bit narrow minded in considering the 2nd option. Why slave away for 2 years of banking if he can do what he wants straight out of undergrad, with the opportunity to stay long term (potentially)? Sometimes 2 years IB > 2 years PE > business school isn't necessary to get where you want to go.
Granted getting specifics on clear opp for advancement would be helpful for the weigh in on the two, but I think the reason for what you allude to as narrow mindedness is because it's a sourcing role - which can potentially leave the OP with a less than desirable experience if sourcing doesn't go his/her way.
If it were a more standard PE role (be it MM PE or megafund) where the OP could get more broad experiences across the board, then I would weigh in differently. But otherwise, the training and experience at an elite boutique (unless you're at say a very low dealflow regional office or something) should be pretty standard and at least gives the OP more of a foundation to build his career on.
I don't disagree with what you are saying, and if I was in OP's shoes I would certainly take the elite boutique. I'm more playing devil's advocate based on the fact that 1) OP wants to do growth equity/VC long term and 2) there seems to be opportunities for advancement.
@SSits
As for sourcing vs. Execu|Searchtion - I think that is really more a personal preference than anything else. Someone who is very sales-y might very much prefer a sourcing role. I find myself falling in the middle of the spectrum and know people who would rather pound the phones than pound excel all day.
I've done some work in PE sourcing (although not in the US). It's not dissimilar to doing constant pitching work for advisory roles, except that you waste more time and money chasing leads only to find out they won't work, only to then get shit from your bosses for wasting time (despite wasting time being an inevitable consequence of checking leads).
I much preferred my exe cu tion work to sourcing work in PE. Sourcing was painful.
Don't set yourself up for a frustrating job. Go boutique advisory and build a professional network first. It makes origination much easier later in life. Otherwise, you're risking making the switch too early in your career, failing at it and then burning out/never establishing a network that you need to do the job successfully later in your career.
EDIT: WSO forums go crazy when you write exe-cu-tion as one word.
@duffmt6 - good point. I'm very much a desk monkey and have an aversion to pressing the flesh on opportunities. I've met others who love the risk/reward balance of prospecting in a way I never could.
That said, I think origination is still going to be tough unless you're going into it with either or both a strong network and good experience to help you sort the wheat from the chaff.
Really appreciate everyone's responses. To give you a better idea, when I mentioned a clear progression, I mean to say that, assuming you perform well at the VC (I think I would, even in a sourcing role), there is a well-trodden path from Analyst>Associate>VP>Partner.
To be honest, I would prefer pounding the phones to pounding Excel, but I am also hesitant to give up a) the opportunities that the boutique will provide and b) the technical knowledge that I would gain. On the flipside, I am eager to work in an industry I'm actually interested in (half the hours is nice too).
I guess the one question I would have is, of the people that make the transition to Associate then VP and beyond - are the ones that are successful typically the ones that started this trek early (re: join at the Analyst level) or are they the bankers --> PE --> Post-MBA Associates type? And to be promoted, what are the attributes that are most important in a sourcing heavy type role?
If it's 50/50 between the ones that come from banking/other PE shops vs. the ones that started right away at the sourcing PE shop and you aren't disadvantaged in any way, then it makes the decision harder.
The one worry I would have in your shoes is whether the quality of experience my first 2 years at the PE shop will appropriately prepare me for the next 2 yrs at said PE shop. While it's a bit counter-intuitive (i.e. why not just join the shop you want to be at directly, and shouldn't working at said shop already prepare you best for the Associate role), depending on the shop, you may or may not get adequate training.
I think if you can get an idea of how well analysts that joined the team right out of undergrad fared vs. the lateral hires, it would help answer the question.
I would strongly suggest taking the IB opportunity and approach any sourcing role cautiously. Why? I tend to believe your average IB is better set up to help you develop the skill-set necessary for any future role you might pursue. Your average PE shop is quite lean (lacks headcount) so you'll be thrown to the wolves. No one has the time to sit down, teach you how to build a LBO, which in turn will eventually allow you to make the jump to the associate level.
On your mention of "clear opportunity for advancement." Make damn sure you know what's their fundraising cycle. If VC/PE shop isn't raising another fund for a few years, you are probably getting your chain yanked (not always true).
As for my background I worked for a MM PE fund for 1.5 years as an analyst a year out of undergrad: read no prior experience. A large percentage of my role was spent pounding the pavement. For those deals that I sourced I was a part of the exec.ution team, but you need to realize very, very few deals make it that far. You'll essentially be organizing phone calls for the higher ups [then hoping it all works out]. It's a very frustrating process being so far removed from the actual decision making.
To give you a feel of success rate; over a 5 year period we had two "sourced" deals, one of which I was lucky to bring in. Can't tell you how many got to the LOI stage then crumbled in diligence. Closing is a fickle beast.
While I've walked away with phenomenal soft skills, in hindsight, I wish I had gone IB first to PE rather than made the jump immediately. Feel like I got pigeonholed as a result of my decision. The soft skills will come with time and maturity. And at the junior level, origination is more about hustling than it is about having an established network.
Gotta ask, is this VC/PE firm in the Mid-Atlantic region? If curious, I am no longer in IB/PE, transitioned into a great CF role.
Thank you for the first hand insight. Changes my perspective a bit.
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