PE LBO vs GE vs VC

Quick question,

Between Private Equity Buyout shops, Growth Equity shops, and Venture Capital firms (all associate level), which one:

1) is hardest to break into/most prestigious?
2) offers best compensation for associates?

Understand the first question is a bit low quality, if you wanna answer it cool, if not, cool. More interested in the second question. Between buyout, GE, and VC firms, which provides best compensation to associates?

Comments (12)

 
Jun 20, 2020 - 2:46am

All the above are incredible options. Anyone who makes it into any of those fields is incredibly fortunate and is sure to be well off financially. Don't worry about prestige (you'll soon realize that prestige doesn't equate to happiness), figure out which is most interesting / plays to your skills and pursue that.

 
  • Intern in IB-M&A
Jun 20, 2020 - 3:11am

Appreciate it. Any idea on how comp varies between the three fields?

 
Jun 20, 2020 - 9:55am
  1. PE
  2. Growth
  3. VC

As a general rule, comp will probably shake out something like this at junior levels (assuming you're holding fund size & geography constant). At more senior levels (where serious money starts coming in via carry / co-invests), comp is most dependent on fund performance (and as an asset class PE tends to perform best).

 
Most Helpful
  • Incoming Analyst in IB - Ind
Jun 20, 2020 - 12:00pm

I'm sorry but why is this a question? Are you really going to make a career decision based purely on comp / prestige / perceived difficulty?

Further, there isn't even an answer to this question. If you're at the top, all of the brand names are going to be equally "prestigious" (partner at Sequoia vs partner at KKR vs partner at GA) - all of those jobs are extremely difficult to get and anyone who's judging you because "omg KKR >>>>> everything" isn't worth listening to. If you're at the junior level and have a particular interest in a certain sort of investing (and want to make a career out of it), being an associate at Greylock vs associate at Blackstone vs associate at CaptialG are going to give you similar opportunities to move around within VC / PE / GE, respectively. Perhaps this isn't the case if you're at VC firm> vs PE firm> vs - maybe it's easier to move around in PE without a brand name shop on your resume than it is in VC, and maybe working in GE for a random firm is a death sentence. I'm not quite sure, but I doubt that that's the case - I can imagine that if you want to make a career in any of these spaces, what matters the most for your long term trajectory is how well you perform in your junior role.

Seeing as you're an intern, I'm guessing you're asking about this to evaluate either FT roles or post-banking roles. If you're truly agnostic (which, imo, is sort of a problem - the types of analyses / what makes a good deal across these asset classes are all pretty different), then you're probably not set on staying in the role as a career. What you then should be thinking about is a. Where you think you'll succeed the most (is your strength in financial "engineering" / structuring deals / etc? Maybe go for buyout. is your strength in higher-level market reasoning and evaluating founding management teams? maybe go VC. is your strength analyzing a firm's current trajectory and potential organic and inorganic growth areas? maybe go GE) and b. What want to do afterwards (bschool? work for a startup? corporate? who knows?). Once you've nailed down those two things, that's when you should start thinking about which sort of investing you should pursue.

 
  • Intern in IB-M&A
Jun 20, 2020 - 2:12pm

I agree, the prestige/perceived difficulty part is silly. I updated my post.

However, the comp part I actually care about. Appreciate your insight regardless.

 
  • Incoming Analyst in IB - Ind
Jun 20, 2020 - 3:54pm

I think the above poster was spot-on in terms of the comp breakdown. VC is notorious for not paying that well (well, relatively so - you'll be making about as much as a third year analyst from what I've heard) at the junior level, GE is all over the place, and buyout is fairly high. From what I've heard, "good" buyout offers are >250k all-in

 
Sep 29, 2020 - 1:26pm

Thanks for the detailed response! 

 

On your last point regarding business school, I was hoping to ask you what the prospects of M7 MBA Programs while in GE are like; obviously, MF and UMM place very well, but was wondering how the more "pure play" GE firms place?

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