Path to Operating Partner/Executive Role

ThatOtherGuy's picture
ThatOtherGuy - Certified Professional
Rank: King Kong | banana points 1,072

Hey everyone. I would appreciate some insights on how to go about thinking through this...

Long story short, I find myself really interested in becoming an operator and would like to pursue the path towards an operating partner role at a fund or an executive at a startup. I currently work at a growth equity shop where I've been doing a ton of portfolio company support, from recruiting to strategic finance. There's definitely more support needed in other functions down the line but I'd really like to know what kind of operations I should be focused on gaining responsibility in so that I can develop the proper "executive skillset."

An idea I had was to contact executive search firms and develop relationships with headhunters so that they can help steer me towards the work that will get me there. Ideally, I develop a good relationship with them on the way as they see my track record with the current portfolio companies and start to refer me to positions they feel I can take on.

If there's any suggestions or thoughts as to what kind of roles I should support in my fund's portfolio companies to get me to an executive operating level, that'd be greatly appreciated

Private Equity Interview Course

  • 2,447 questions across 203 private equity funds. Crowdsourced from over 500,000 mem.
  • 9 Detailed LBO Modeling Tests and 15+ hours of video solutions.
  • Trusted by over 1,000 aspiring private equity professionals just like you.

Comments (3)

Jun 4, 2018

Most operating partners are semi-retired C-suite execs. The most direct route from finance is probably to a chief of staff type role at a startup (goes by a lot of names - management associate is another name for the same type of job - see link below for relevant article). Then you do that for a really long time and maybe become a C-level exec, and then maybe you develop enough expertise in a specific area and a buyside firm you're familiar with decides to take you on as an operating partner.

In a lot of ways it's analogous to the path that some retired pro athletes take to becoming a color commentator in that no one really sets out to become a color commentator; it's just kind of a good gig once your playing days are over.

https://medium.com/lightspeed-venture-partners/sof...

    • 1
Most Helpful
Jun 4, 2018

Operating Partner is a title reserved for people that usually aren't part of the Investment Committee and thus, by extension, the overall carry pool.

It tends to be guys in their 60s or 70s who spent a couple decades in CEO roles in an industry relevant to the fund's investment focus. Former consultants are the second most common group.

They are old and experienced but aren't going to be logging 70+ hour weeks like a CEO does. They are an extra set of eyes on deals before they go into the portfolio, and an extra brain that can be lent to the company's C-suite once it's in.

They tend to get paid a comfortable salary ($250-1,000,000) and phantom equity on deals they're involved with. Co-investment is also another thing they enjoy, they can choose to cherry-pick deals to deploy cash into if they're involved.

In terms of day-to-day responsibility it varies a lot. Some are more hands-on than others. It can be purely board-level work, or it can effectively be having a McKinsey consultant on call 24/7. Others are really proactive and work hand-in-glove with management on everything from pricing to budgeting, business development, recruiting, overall strategy, executive coaching, or anything else.

You can see from this that you're not really in a position to pursue this right now. You're lacking at least two decades. I assume from the 'VC' industry tag on your profile that you're in a late-stage / growth equity shop. These funds tend to have 'EIR' or 'Venture Partner' more frequently than 'Operating Partner'.

If you want to be an operator, go get an operating role at a company. If you're in venture / growth equity, this is very easily done by approaching one of your portfolio companies. They are never going to say no to an employee of one of their current investors. The only risk you run is that they circle back to your seniors to make sure it's cool before you even mentioned your interest internally.

Venture to portfolio startup is an incredibly common path. Pick the company that your fund is most excited about (presumably because it's the best performer) and take the CEO or other founder(s) to coffee or lunch. Ask them what they're working on, what they're most afraid of in the coming year, and what they wish they had more time to work on personally.

Then go handle each of those things. Produce deliverables that map the market, segment, or product they're considering entering or launching. Attack the bogeyman they're scared of (e.g. figuring out whether writing new code or using an existing big player's API is the smarter decision). Do the thing they wish they had time to do personally.

This is all top-notch portfolio support you should already be doing for the companies you're responsible for covering. Once you've spent 3-6 months building some rapport with the guys you picked (you could do this for two companies at the same time, by the way), ask if they ever considered hiring a 'strategic operations' or 'head of business' guy to focus full-time on the Seal Team Six stuff you've been covering them on.

The answer is always going to be 'oh, I never thought of that' or 'I never knew if I could trust someone'. Then you offer to make a shortlist of strong candidates they could talk to. Then a month later you say 'here are the best four I could find, but then I realized I could do it way better, do you think this makes sense too?'

Assuming the work you've done is halfway decent, they'll obviously light up and agree, then all you have to do is go float the idea with the partner(s) you report to. They'll be happy. It's easy to find qualified junior investment staff; it's harder to find the right senior talent to stick into a fast-growing portfolio company, and everyone wants their winners to win faster.

In short, forget the Operating Partner thing until you have more gray hairs than whatever color you were born with. Follow this route to get into a 'build your own' role in the best company in your portfolio.

Modify your approach if there's a company you have the hots for that isn't in your portfolio; the same logic will apply, except you will have to be more adept at preserving relationships with your fund when explaining the next step you want to pursue.

Good luck.

    • 6
Jun 5, 2018