Hi everyone!
Some of you know me as a long-time poster on WSO, but this time I am seeking advice and would greatly appreciate any insight from people who may have been in a similar situation.
To put it in a nutshell, after a couple of years in M&A I moved to a large cap fund where I work on a mix of VC, PE and public investments. On paper, the job is awesome but for plenty of reasons we spend our lives screening investment opportunities and never end up investing (unlike the other teams) despite sitting on a huge pile of cash. I feel like I am wasting my time, neither building the right skillset to move up the ladder, nor the network required to move to another fund.
My job quest has proven to be incredibly challenging as I am either too senior or too junior for most roles, not to mention that traditional PE funds blame me for my lack of deal experience as an investor (I have completed over 30 deals as an M&A banker...).
So now the real question is what do I do next? Staying at my current company is not an option because developing skills at this stage of my career is way more important than earning lots of money. I genuinely love being surrounded by entrepreneurs and love the investing process, so whatever the route I choose the idea would be to stay / move back / go to VC/PE in the long run.
Here are the options I have in mind, but there might be others:
1) Going back to M&A at the VP level is the easiest option, but I kind of dread the idea of working extremely long hours and not be able to develop my network. Obviously, there is the financial upside but I see it more as a trap than anything else. One possibility would be to join a firm advising startups and young Tech companies, but they tend to require a TMT background that I don't have
2) Joining a fast growing startup in a corporate development role. I can't pretend this is the most exiting route, but it seems this is a path usually greatly appreciated by Seed / VCs. If so, I guess it would be a temporary move (18 months or so), but query what happens if I can't move back to an investment firm.
3) Sticking to my original path and looking for a PE/VC job whatever it costs, although that may mean being unemployed for a fairly long time. Holes in the CV seem to be extremely badly perceived by both recruiters and employers in the UK, so not sure this is a very smart option.
4) Joining a startup as a co-founder and seeing where things go.
I must confess I am really in the dark right now, so any help would be greatly appreciated!
Thanks,
Camondo
Paging APAE for OP, who if available will definite do a mic drop of advice here, as per his MO.
I’ll start this off with some questions - what are some of the reasons that stop the fund from pulling the trigger on the opportunities you screen? Is it political? Is it level of risk (that is, saying they want to do VC deals at various stages but ultimately are never willing to do so)? Is the fund’s relationships / sourcing a bit weak not resulting in good opps?
Before you go anywhere, is this a place where you - with a smarter approach to developing relationships and sourcing opportunities - can differentiate yourself and move up from there?
With VC, it’s a lot about going out on your own and developing relationships with startups and other investors. It’s something where the investment in yourself (and your own brand), would in turn help your fund, and also something that you can carry with you when you move to another shop. In VC, there’s a lot of focus on the investor as an individual, in PE there’s greater focus on where the investor resides firm-wise. So if you can start developing yourself as an individual (with a Rolodex of relationships with startups), moving to a different VC shop is possible.
I get the too senior or too junior for positions issue. But is this something that they are imposing on you, or would you be willing to take a step back (say become a PE associate again at a busier shop) and have explicitly addressed it?
Hi Kanon,
Let me address your different points.
My team does not invest because my boss can't make up his mind. He is terrified by the idea of making bad investments (he's made a few terrible ones in the past), so he does the very strict minimum to live on his extremely comfortable package without being fired (although that will happen eventually). To put it simply, he doesn't have the investor mindset and that's a massive problem... Given the brand name, we don't have any problem sourcing deals, but people don't want to deal with him because they know it's a waste of their time.
The organisation is extremely rigid and even if you source deals, they will be dismissed by the guys at the top.
Re VC, that's exactly what I have been doing for the past two years. I am advising on the side a number of tech entrepreneurs on many aspects and trying to build my creds book. I now sit on the board of an AI startup, so things are going in the right direction.
That's indeed something they are imposing me. Despite being Senior Associate / VP, I would be more than happy to join at the Associate level to secure a good job... Apparently, that's not the way things work in the UK.
Thanks for your help! Camondo
On the coasting boss and hierarchy part:
So that really sucks... but should the boss get canned, is there a good, assertive second in command that does have an investor mindset that would take his place and position the group for investment? It just seems weird, did I miss something or is this the conpany’s house money or a pension / SWF? Because otherwise you need to make investments to be able to raise again with existing or new investors going forward...
I’m assuming that if the guys at the top are also rigid, the above question probably means there is no one internal they plan to bring in that will shake things up. Everyone is in on the move to sit and collect...
If the fund is a big brand, but known for not doing deals, is there at least prior co-investors / funds you’ve dealt with that you can jump over to. Maybe have worked with other senior associates or VPs at other firms, Developed good rapport with and etc. Can you grab a coffee with those guys and see if there are openings there?
On the VC part:
Sounds like you’ve done a lot on your own in developing your reputation in the startup ecosystem and providing value add there. Can these startups give you some color on VC funds that are hiring and provide warm intros?
While the operating or direct startup experience would be useful, unless you’re playing a huge (maybe officer /exec) role within the startup that you join FT, I don’t know if doing an 18 month stint would better position you title wise at a VC shop vs now. I feel like whether you get something now directly, or 18 months from now at a startup, you’d still be a Sr Associate or maybe jr Principal / VP. Unlike PE, I think VCs are more forgiving of the lack of deals with your current firm since you’ve also proven your background in M&A, coupled with you being proactive in the community on your own. I think they will care more about whether you are willing and capable of developing your own relationships (which you are doing), and if you have a view on trends and an investment thesis (which you can research and develop, without having done deals).
On the PE recruiting and titles:
Because it's going to take another 12 to 18 months given how slow things are... On my side, I have been there for over a year and haven't executed a single deal...
That's extremely frustrating. Do people internally recognize that he is being gun-shy about investments as well?
I've worked with similar individuals in the past. One even managed to gain the nickname "Dr. No" because he would be quick to kill of deals he didn't want to spend time diligencing.
People know there is a problem, but he has inherited a great portfolio with very strong performing assets, so he just needs to hide behind the fact valuations are very toppy right now. In addition, he makes us work extremely hard, so people don't question his skills and just assume he is only looking for rough diamonds.
"Dr. No" is such a good nickname...! That's exactly the problem and that's so hard to explain during screenings / interviews that the problem comes from your boss not you or your institution.
Have you heard that you can go back into banking as a VP? I thought most BB/EB would require you to come in as an associate at some level.
I second kanon's question - what fund type are you at? Most realize that they need to make investments or they will go away.
I'd pick #2 or #4 but caution that #2, i'd advise going against a BD role. Go for product if you can. My day job is PE but pretty plugged into the VC world.
Are you US based? if so, feel free to PM me and we can chat further.
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