Equity Private Placements
Have been seeing a bunch of roles pop up on LinkedIn for “Private Capital Markets” doing private fundraising (series b, series c, etc) for non public issuers. This sounds like ECM, but a bit more interesting. Doesn’t seem like there is much financial statement modeling, but looks like there is IRR, cost of capital, etc modeling especially when the securities get a bit more structured. These teams look like they do some SPAC PIPEs as well, but doesn’t seem like the primary focus.
Was wondering if anyone had any insight / thoughts on the group? I’m interested in VC or mid-later stage Growth equity longer term, so was wondering if that would be viable - seems like those buy side seats are more qualitative from a modeling standpoint vs building an operating modeling for a capital intensive business in industrials.
Thank you!
Bump. Also, would a private placement for a publicly listed company fall under this group?
Have done maybe two of these, both tech, so I won't make sweeping generalizations. Just my observations and experience.
On the later stage ones I worked on, modeling / financial diligence was a mixed bag because the universe of potential investors was so mixed - late stage VC, early stage growth and strategics. Generally, VCs were mostly focused on market opportunity and differentiation and corporates on product, roadmap and cross sell. Growth guys were really heads down on the near term and that's where the modeling came into play. Typical buyside diligence - deep dive into sales funnel, revenue, gross margin, op costs, KPIs etc. Mostly focused on near term
Clients I worked for didn't have the pull to dictate terms. We went out with an ask but were ultimately beholden to whatever terms the market offered. Some of it was was structured or unconventional - multi tranche, earnouts/triggers etc. Was super interesting. Some modeling here, but more to help client decide which way to go
On one, business was very early stage, just starting to crank out it's first period of revenue. Buyside didn't even look at our model, did their own. Was a PE-backed strategic.
Working on a SPAC one now, operating business with a ton of blue sky, and the modeling diligence is very VERY granular.
First and foremost, thank you for the thorough and thoughtful response. This seems in line with the deals this team does.
From what I gather, the equity private placements team partners with the coverage team on these deals. It sounds like coverage does the operating model, and handles due diligence requests, while the private placements team does the investor outreach, discussions, and then the actual term sheet modeling (I.e. IRR, MOIC, etc) when the deals get a bit hairier with some downside protection.
Given that the coverage team handles the model, I was wondering your thoughts on the equity private placements / private capital markets team. I am currently in vanilla ECM, and this sounds a lot more interesting given how closely you work with those later stage VC/early stage growth investors . With that said, I am cognizant of ECM’s somewhat narrow exit ops, so I am wondering if you had any thoughts on how this group would stand in that department.
Have seen JPM, Guggenheim, etc advertising these “Private Capital Markets” roles, so am wondering if this is something worth pursuing (with exit ops to VC/growth in mind given less operating model exposure w/ the trade off of term sheet modeling which is more simple).
Bit outside my wheelhouse but I'll try. My view is you'd probably have a better shot than vanilla ECM.
Even without the modeling, you're getting exposure to the private capital deal structures which can be quite tailor made. It's quite interesting to see how these funds evaluate risk and structure around that. The cap structure / waterfall modeling is also quite useful as most of these early companies have some pretty complex, often fucked up cap tables. I would think there is some value in that experience. Also if that group is driving the outreach, you'd be front and center with these funds. Probably some networking value there.
Given how large the private capital universe is, there has to at least a few I would wager who would value that experience. Especially if this group has some good deal flow.
What you would miss is the industry knowledge that comes from being in a coverage group. I'm honestly not sure how much that would handicap you. I guess it really comes down to how well you craft your story.
This may sound cynical, but with all the BS spattering on this website - people and posts like you are why I am on here.
Thank you.
Would you be okay if I PM’d you?
Autem quia aut est facilis in. Voluptas reprehenderit dignissimos deleniti inventore.
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