IBD---> VC or no?

Hey guys My cousin actually went to goldman IBD then left ( after analyst ) worked Corp Dev at yahoo, then started hes own tech based business afterwards, well after that ( prolly at 30 years) started, founded his own VC and many famous guys in silicon. I was just wondering if that is the correct and most effective path to reach a high position of a VC. Or should u just try to get an analyst job at a VC and try growing there. Or would it be better to do IBD at a BB and then see if you can leverage yourself to a VC?

Thanks for the help!

 

idk I like starting businesses and helping other people start businesses it seems very interesting to me. BB seems great too idk I feel like the VC side seems more fitting for an entrepreneur mind set. But at what grade levels do VC's give internships? like freshman year, soft, junior, senior? Also you think that corp dev or BB/PE is a better option for people who want to help and deal with business leaders?

I appreciate all the help

 

Depends on the kind of VC... Alot of tech-focussed VC is populated almost entirely by engineers, former entrepreneurs, straight-from-undergrad VC people, and former managers from the industry involved. Check out some Accel (not Accel-KKR) and KPCB bios. Almost none have banking backgrounds.

‎"Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to become the means by which men deal with one another, then men become the tools of other men. Blood, whips and guns or dollars."
 

start your own company, work in business development of a tech corporate or in a start up. IB is not necessary at all, a lot of people get an mba if they want to learn more about business and finance but even mba is not necessary in VC.

cubiclecrowd.com blog.cubiclecrowd.com
 

Think of your career as you would any investment. If you have a strong belief in this firm and your fit, go for it.

However, given the pay cut, I imagine you'd want to join with the expectation of future growth. Unless the fund grows its AUM significantly and has outsize returns, with standard management and performance fees, the overall comp. pool just isn't that large right now.

 

I'm usually one of these people that argue that one shouldn't put to much emphasis on pay or a pay cut when moving to a different role, especially if the new role is more exciting or more aligned with personal interests. But $300k vs. $85k, that's a huge paycut and I wouldn't do it tbh.. But then again, I don't know about the growth opportunities at this VC firm so I don't know..

Maybe someone more experienced will have a more insightful advice for you. Still wanted to bookmark this topic.

 

A bit perplexed by your description of the fund as VC world as I'm sure you know, and I can't think of too many reputable shops with fund sizes below $60m. Are these well known and reputable partners? Would be a pretty bad move to leave $300k comp, especially post MBA, to move to a fund that's not near the top decile (my opinion obviously, for what it's worth).

 

If you're at a Tier 1 BB and doing well there will future VC opportunities down the line especially as you get more senior you're rolodex will grow, especially with VCs (they are your clients after all). I just moved to a reputable VC and in our meetings with potential co-investors I rarely met one who had AUM VC consumer. Send me a PM if you want more info

 

Would be interesting to learn more about the firm - if recently started and performing well this could actually be a great opportunity. Prestige and brand name are the result of strong performance (and not necessarily a reliable driver of outperformance in the future) so I wouldnt reject the offer "automatically because it's not KKR / Kleiner Perkins".

You want to diligence whether (a) these guys are / will be able to make excellent investments and thus returns (ie have they proven in the past that they can pick the right firms and can they really help teams they backed succeed) and (b) if they have access to LPs that will support them with capital until that point where everyone believes the firm is good indeed.

The right answers to these questions (happy to detail in PM) should really help lower the risk of this career move. Your interest in these points should only irritate them if they're got something (terrible secret?) to hide.

 

Thanks for all the advice guys!

The one point I differ with is the availability of VC offers to associates in IB. I haven't heard of (in the history of my group) anyone making that move at any level from A1 - A4.

Furthermore, the senior associate / associate level is the only entry level position to break into until a partner opportunity would come up (would also require bringing in $mm to the fund). As an A3 - VP, it just wouldn't be smart to move to the VC associate level. A1 / A2ish is probably the last year I'd make that jump.

 

This is crazy that you're even considering it, to be honest. The fact that they haven't offered you carry means they don't give two shits about you or the position. Imagine if you were them...would you offer someone a 70% cut in pay to lure them to your firm with no sort of optionality attached? You should be insulted.

 

This is not a post-MBA role. I have no VC experience and wouldn't be able to land one of those. I know I have to take a step back to enter the industry and am willing to take the pay cut.

There is a bonus. Expected around 25 - 50k.

Pitchbook's 2014 VC / PE comp report states associate (pre-MBA) roles pay on average 90k + bonus w/o carry in firms with AUM under 100mm. Senior associates earn $125k + bonus +

 
assocMonk7:

This is not a post-MBA role. I have no VC experience and wouldn't be able to land one of those. I know I have to take a step back to enter the industry and am willing to take the pay cut.

There is a bonus. Expected around 25 - 50k.

Pitchbook's 2014 VC / PE comp report states associate (pre-MBA) roles pay on average 90k + bonus w/o carry in firms with AUM under 100mm. Senior associates earn $125k + bonus + < 5% of carry. That's what I'm using as "market" comp.

You're a post-MBA banking associate and should use post-MBA positions as a comp. Post-MBA VC associates do not usually have prior VC experience so it doesn't make any sense that you have to take this much of a step back just to get into VC. It keeps sounding like you're way too experienced for this role. I know VC analysts directly out of college making more than this. Compensation is correlated with the quality of the firm. Don't sell yourself short here just because you want to break into VC. It's extremely hard to move upstream in VC, i.e. from a microfund to a larger firm. If you're confident this firm will outperform over the next 5-10 years then go right ahead but otherwise don't settle for a no-name shop just to get into VC.
 
cjl2g:
I don't know too much and I don't know anyone in the industry.

If you really want it you should start reading and learning more about VC and the tech industry in general.

Robert Clayton Dean: What is happening? Brill: I blew up the building. Robert Clayton Dean: Why? Brill: Because you made a phone call.
 

The OP wasn't asking for headhunters, but for very generic advice that was covered ad nauseum in my AMA on this exact forum. The reason I did that in the first place was so people could use it as a resource and not ask the same 5 questions over and over.

 

And I would say there is nothing to lose (despite what others may say) about reaching out directly to partners at VC / growth equity firms in parallel to working with recruiters. Worst thing they can say is we don't have space or not interested. Your job in VC / growth will almost certainly be focused on sourcing, so they won't be bothered by your outreach.

 

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