Hedge fund vs Venture capital
I am still thinking which road to take. Can anyone ex?lain them apart.
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I've worked at both. It really depends on your personality type, skills and career goals.
HFs usually have a lot more assets under management and are defined by strategy (of course the huge ones have multiple strategies). If you're strong in math and computers (love working with data) then HFs may be more interesting. I worked at a relatively small stat-arb fund (I wasn't a quant behind the strategies but rather a trading assistant) until it went under in 2008. The vast majority of funds deal with public companies but the transactions can become quite complex (plain vanilla or OTC... depends on the strategy). There are also more roles on the HF side (trading, risk management, IT, research, investor relations, HR, etc.).
VCs tend to be more entrepreneurial and defined by industry. I work at a VC specializing in alternative energy (especially solar projects) and commodity business. Most roles are analyst related but instead of doing number crunching and crazy amount of financial modeling as you would at a HF, you do more due diligence type research. Some VCs prefer investing in shovel ready companies others (i.e. angels) invest in negative cash flow firms. Obviously a lot of the companies are private, but depending on the timeline they could also be public. Most VCs invest in equity only but a handful also do debt (really depends on the industry).
PM me more about your personality, ambitions, dream job, etc. and I may be of better help.
mb666,
can you talk about how you made the transition? Surely the skill-set is completely different from your role as a trading assistant to analyst at a VC. Did you have much knowledge in the alt. energy space before this role, if not, how did you convince the VC that you could add value/self yourself, etc.
My fund seized to operate so I was forced to find a new role. I actually worked in prop trading for a little over a year before joining a VC. I sent my resume all over the place and interviewed at various firms (a handful of funds). My current boss comes from old money and is involved in a lot of different businesses, one of which is in dealing commodities throughout the world. During the interview we casually talked about crude, gold, etc. and their impacts on the economy. We shared similar opinions about macro events so it was a good ice breaker. Also, unrelated but very important, you would be amazed how connected the major players are across industries (IBs, HFs, PE, VC, Commodities)... always network.
I was rather knowledgeable about energy (crude oil & nat gas) but I didn't know much about alternatives. My gf's uncle has been in the solar business for several decades so his information helped me during the screening process but other than that I don't have any magic formula. I will say that I have strong analytical skills, can make independent decisions and have no fear in doing so. I previously had some serious responsibilities handling time-sensitive orders so proven execution helped (recommendation letters). Ultimately I really believe that I was offered the role because the main boss enjoyed my personality. In finance people underestimate the human element, so be yourself and not a robot. Yea it sounds corny but employers respect it and can filter the b.s. I was also told (during my interview) that I spoke well and I would be entrusted to handle important calls and presentations so I assumed that helped too.
Hi mb666,
Just curious for an update - are you still at the same vc fund and where is it based geographically? Would be interested in hearing more about your experience if you still check this board..
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