Growth Equity at Entry Level and Lateral

I am currently a junior at a non-target school. I am interning for a growth equity firm (>$1B in AUM) this summer. This position has the opportunity for Full-time employment if expectations are met. I was wondering if anyone had any thoughts on this opposed to a typical IB internship and two years as an analyst then transferring over to Growth Equity.
Also was wondering what lateraling or exit ops would look like when you start out in Growth Equity?

 
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If you want to do growth equity and can start in the industry at a reputable firm, then you should definitely pursue it. Starting in investment banking is more preferable if you are looking for more exit ops in different industries outside of growth equity. If you want to do buyouts one day, then joining an investment bank would make more sense. The formal training program at a lot of the top investment banks may also be enticing. If you join a growth equity shop that does not hire Analysts/Associates yearly, then they will probably have no formalized training program for you. This could be great for somebody who rather get thrown into the fire though.

Joining a growth equity shop will limit your exit ops to venture/growth in the investing world for the most part. It's not impossible to exit elsewhere, but your story will have to be compelling as to why you want to leave.

As for the lateraling or exit ops after a couple years, you could have a lot of options. You could end up staying and become a third year Analyst or promoted to Associate if your firm allows. You could also leave and join another venture/growth firm as an Analyst/Associate. If you want to stop investing, then you could join a portfolio company. In general a lot of startups like hiring junior investors, so you could join any tech company, not just a portfolio company of your current fund.

Business school is also an option after growth equity, but you may be too young to go back. Getting an MBA is probably more appropriate for an Associate after they completed two years in growth and two years in investment banking. If you know you want to get an MBA early on, you could apply for one of those early admission programs during your senior year and immediately get your MBA after two years in growth equity.

 

I interned at a respected GE shop as a junior, and ended up hating it, adding a 5th year to my degree, and recruiting for IB.

It will be all sourcing. I thought I wouldn't mind that, but I couldn't believe how boring sourcing was. The worst part is that, in the 1/1000 chance you actually manage to get in touch with a company that is interesting and doesn't have terrible financials, a senior person will swoop in and steal them. Chances are, analysts won't get to touch a model, or even get trained on it (this depends on the shop). You might do some diligence market research type stuff, but that is also pretty simple and not really a good skill.

I think exit ops are a little bit unclear (GE as an industry has really grown recently, and most of these analyst programs are pretty new). I personally chose IB because I thought the exit ops would be better. Apparently going from IB to GE is relatively easy, and IB also opens doors to PE, Corp dev, HF, etc. Growth equity is really only going to exit to growth equity, meaning either you get promoted at your firm or lateral to another firm, probably after a few years where you could get hired as an associate. You could maybe lateral 'upstream' to a more VC role, especially because many GE shops have earlier stage arms. Lateraling downstream to a buyout shop is possible, but apparently it's pretty difficult and you will only have a shot at LMM/MM PE, not UMM/MF levels. Another exit op that is pretty common from GE is to a portfolio company (ie you invest in a company and work with them a lot over a few months, end up joining in some sort of a corp dev role). This path can obviously end up working well if the company does well, but it can also be a dead end if the company flops.

I ended up going for IB because I thought it just kept my options open, and starting directly in GE doesn't really accomplish much (either do 2 years in GE and get promoted, or do 2 years in IB and come in as an associate), so IB just made more sense. Also, I talked to a bunch of people at the firm I was at and in the industry about this so I feel pretty knowledgeable about it, but obviously I'm just an intern so anyone please correct me if I'm wrong.

 

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