Q&A: FIG ER to Consumer Growth Equity to Cannabis Startup

Hey everyone! I've finally moved out of the finance life very recently into a more operationally-intensive role but this forum was tremendously helpful to me for years so I want to share my career path and thought process since I took some unconventional approaches.

Brief background
- Started college in a non-target majoring in accounting -> transferred to a target school after a year
- Did summer internships after freshmen, soph, and jr year (business valuation, investor relations, BB ER)
- Stuck with BB ER firm after college and joined FIG coverage (~stayed 2 years)
- Networked for 6 months and joined an operationally-focused consumer growth equity fund as an Associate
- Fleshed out my network while in growth equity and was referred a finance & operations role at a cannabis startup by an angel investor I befriended

I'd rather not dive too deep into the cannabis role just yet but happy to answer any other aspects of my background. I'm a pretty neurotic strategist when it comes to my career path so every move I did was quite deliberate and thought out. One area I struggled a lot on and hope to help people on this forum with is the art of networking, particularly developing networks from scratch as a junior person because I'm a firm believer that networking SUCKS and is a slow grind but can help you make pretty aggressive career leaps/pivots.

Comments (31)

 
Apr 9, 2020 - 3:12pm

Thanks for doing this. Did you specifically target Consumer funds or just happened by chance? If the former, can you please talk a bit about your networking / recruiting process?

Currently in PE but in a sector not related to Consumer. Long term goal is to do Consumer PE / Growth.

 
Most Helpful
Apr 9, 2020 - 3:53pm

Consumer was a high preference of mine but I mostly just wanted to be in VC/Growth Equity. Given how tricky the transition is from FIG ER, I was sector agnostic and went after everything/anything where I could spin a story out of FIG. Even if I was truly agnostic, however, I always tell people I'm networking with that I'm specifically targeting their industry and make sure I have a relevantly crafted story ready.

Story: For consumer funds, I crafted the story that my work in FIG let me see the serious spending banks were making on streamlining and enhancing the consumer banking experience. Some banks were able to charge lower-than-market interest rates on checking accounts simply because they had a better consumer experience designed so deposits were stickier. This led me down a fascination into consumer behavior and ultimately innovations in the consumer space, hence my "passion" for consumer VC/GE.

Recruiting: I had a terrible experience in recruiters/headhunters for anything except FIG hedge funds. There were no bites since FIG ER was just too far removed to them for anything VC/GE. Thus, I took the pure network-for-a-job approach and reached out to my alumni base, people on LinkedIn, and people I meet in person at pitch competitions/networking events. If I feel like the VC/GE investment person I met is a great long-term asset, I'll send them relevant deals and information I pick up every now and then so they keep me top of mind for when openings roll their way.

How I got my job: One tactic some on this forum would consider aggressive is asking for introductions to other people that may be relevant to you. I've gone so far as to picking 3-5 people in their LinkedIn network and asking if they happened to be comfortable providing intros to any of them. I found that early stage investors are far more likely and willing to go out on a limb like this, and this was actually a HUGE aspect that sold me on continuing the recruiting even when I felt very defeated. Anyways, what eventually happened was that an alumni in VC helped intro me to a corporate VC and in the middle of my conversation with her, she got a group email from my fund-to-be searching for an Associate and she forwarded me that email. Fortunately, the person doing the recruiting for my fund-to-be ALSO started in the same BB bank I was doing ER in, albeit he did banking. Still I believe that commonality helped me stand out for an interview and the rest is history.

Check out my blog EjAhead.wordpress.com
  • 6
 
Jan 21, 2021 - 10:31pm

One random thought...

Fwiw, by no means trying to shit on OP as I found this thread very helpful.

 

Once I was networking with an alumnus, and I wrote "Alumni reaching out" in the email title.

He only responded by saying "Hi, the singular form of 'alumni' is alumnus. Best, (FUKYOU)"

 

 
Apr 9, 2020 - 9:52pm

Back in my ER days, I had access to a portal where I could see every Analyst's research notes and fully downloadable models. That was a good starting place for me to understand modeling processes and drivers in the consumer space while having written notes to back them up. Prior to pursuing growth equity, I was shooting for hedge funds so I was also already building reps by finding random stocks to model out and checking against analyst models.

In terms of free resources, check to see if your school or a friend still at school has free financial data resources. My school used to have a barely-working portal to access Thompson but it did the trick. I also suggest you check this link out: https://www.toptal.com/finance/freelance/bloomberg-terminal-alternative

Toptal in general has some pretty in-depth financial knowledge articles that I find quite insightful and they're from certified CFO's, bankers, etc.

Regarding moves, I wanted to be a cannabis operator from the start but there's enough horror stories out there about the industry that I knew my move in would need to be very, very well-vetted. So to your point, I went to GE to (1) develop a good enough network that could lead me to the right move in cannabis and (2) so I could see the startup landscape and understand how good/bad companies operate and think. Fortunately, my experience in consumer has a lot of overlap with the operational challenges I'm currently being hired to tackle and being able to tap my network has been tremendously useful.

Check out my blog EjAhead.wordpress.com
  • 3
 
Apr 9, 2020 - 10:34pm
  1. I originally wanted to do ER -> hedge fund but I was quickly started to realize I didn't have what it takes to beat the market lol

  2. Consumer growth equity really gave me an appreciation for a company's financial performance relative to actual performance and execution on the ground floor. This pushed me further towards the operating front, especially when I started noticing how critical strategic finance is to running a company, particularly consumer/CPG.

  3. My original retirement goal was to be a cannabis operator after making a ton of money on the buy-side

Even though I "left" finance, it's still a core competency of mine and being an investor is still appealing, albeit I find myself more interested in small private deals vs big fund investing.

Check out my blog EjAhead.wordpress.com
  • 1
 
Apr 10, 2020 - 1:14am

How was the interview process for the COnsumer Growth Equity firm? I know for traiditonal buyout shops there's usually a case and LBO component. Did you find your process to be traditional along those lines, or was there an operational component to the case as well?

Also looking to recruit at PE shops that have the investment associates also take part in operational improvements across PortCos, but unsure where to start in identifying funds with that strategy.

Array
 
Apr 10, 2020 - 1:47am

The interview process at the growth equity shop was kind of traditional yet unique on its own. First round was a phone interview with a partner, asking about my "why", the type of work I'm expecting, and other typical first round questions. Second round was an in-person case study where I had to structure a thesis, valuation, and financial projections for an apparel startup solely based on a 2016 pitch deck. I also had to prepare a presentation on my favorite and least favorite company in their portfolio without any inside information about the companies. No LBO's since we don't really do debt outside of convertible notes.

My overall takeaway from my interview process was that my fund wanted someone who was able to solve problems with limited information known and yet still structure a credible argument.

PE that gets their Associates involved with operational improvements tend to be smaller funds where roles are more loosely defined. The need also tends to arise because the portco or the fund does not have the money to throw around for big name professionals and executives so resources are more scarce and Associates have the opportunity to pick up slack. You'll find that consumer-focused funds tend to have more opportunities for operational involvement work because unit economics, cash flow management, and working capital are incredibly important operational finance concepts in CPG.

Check out my blog EjAhead.wordpress.com
  • 2
 
Apr 10, 2020 - 3:53am

ER progression is standard: 85k, 90k, 95k each year starting as Analyst
Bonus can be 5k-35k from what I've seen

VC/GE varies tremendously based on fund economics
Smaller seed/series A funds can take you as low as 70-80k with 10-15k bonus
Typically once you get into growth stage and several hundred million AUM, you see $100-150k base and $20-60k bonus. Hard to give accurate gauges since comp can truly be all over the place.

I have a VC compensation survey I can share if you DM me that divies it up based on position and fund size

Check out my blog EjAhead.wordpress.com
  • 2
 
Apr 10, 2020 - 1:09pm

Would appreciate that VC comp survey as well! Thanks again for doing this.

I have a similar non traditional background (consulting and IB) that may not be the most cookie cutter route for certain growth equity roles but very reassuring seeing someone else make it through aggressive networking. Very impressed with how you form fit FIG ER as well.

I know you just started but hopefully one day you can expand upon your current role. Growth equity to cannabis startup sounds like the dream haha

Array
 
Apr 11, 2020 - 7:56am

Cheers for this mate.

Any comments / tips on how you moved from ER to FIG Coverage? Because that's a S&T position to an IB position & something that I might consider doing at some point in my career.

thanks again!

 
Apr 11, 2020 - 1:40pm

Oh to clarify, I was covering the FIG sector in ER. That said, the move from ER to IBD is not uncommon. Historically, I've been surprised how often IBD ends up using ER coverage notes and models to pull info for their deck slides, so having knowledge on an ER level is definitely helpful to transitioning into IBD. I've seen multiple people make the move and it's especially easier if your firm promotes internal mobility.

Bottom line, if you KILL it in ER, especially with management access and relationships, you can make the move to IBD. IBD at the later levels is all a relationship management game and being a trusted critical thinker who can tend to clients needs ASAP or even before they ask. If you're working under a good team in ER, you're already developing these skills as a ER Associate. What you'll have to make up for at the junior level is mainly understanding transaction processes and having the granular efficiency in Excel/modeling/Powerpoint that bankers have.

If you're lucky in ER and already cover an M&A-heavy sector, chances are you're already engaging in banking requests too.

Check out my blog EjAhead.wordpress.com
  • 3
 
Apr 12, 2020 - 1:48am

TBH, my time in FIG ER was a ton of grinding and updating data points for routine research notes lol. There was a terrible lack of overlap between my job and my job search but this was unique to me and the team dynamic I had in ER. That said, your shortest story bridge to cross into growth equity would be FinTech and understanding innovations in whatever subsector of FIG you occupy.

If the growth equity fund you're talking with is worried about deal experience, try speaking to any deals that happened that remotely relate to your FIG ER coverage universe. Take a position as to whether the deal was good or bad on a financial & strategic level. Also make sure you flex that you're close to the startup ecosystem and call out a few companies that are worth noting for the fund to pay attention to (ex. A Fintech startup that raised a series A about 1-1.5 years ago in which you think their tackling of a certain problem is done very well; extra points if you know for a fact they're currently raising and can make an introduction to management)

For your resume, focus on areas like:
* Deep dives into your coverage space, especially anything to do with innovation and startups
* Development/defending/creation of investment thesis
* Creation of presentations, research writing, and other client-facing outputs
* Creation of financial models
* To your point, ANY analysis of deals, acquisitions, fundings, and other transactions

Check out my blog EjAhead.wordpress.com
  • 3
 
Apr 12, 2020 - 3:21pm

Other than networking and these forums, did you find any other resources to be useful in filling the info gap about growth equity? Realize there's a lot less info out there about this space versus traiditonal LBO shops.

Array
 
Apr 12, 2020 - 4:50pm

https://johngannonblog.com/ is a fantastic resource for those looking to get in VC which I would argue overlaps with growth equity far more than LBO PE. They got job postings, guides to breaking in VC, career path stories, and a newsletter.

I also recommend the Youtube channel Gartner for Marketers (previously known as L2) run by Scott Galloway. There are a TON of videos that deep dive into various analysis, market sizing, case studies, competitive landscapes, etc in the innovative world including players within the growth equity space. Yes, Scott has strong opinions and lets his political views seep a bit into his analysis but he does frequently make credible arguments that will help you think in a growth equity mindset.

There's a ton of good stuff in the podcast realm as well:
* 20 Minute VC: Amazing podcast for those who are new to the space and it will let you realize how many different flavors there are of VC/growth equity investors. For me, their Founder Friday segments are the best.
* a16z: The official podcast of Andreessen Horowitz. They do some serious deep dives into topics of innovation, moreso geared towards the technology side.
* There are also a TON of sector-specific podcasts that frequently interview growth-stage companies: Taste Radio, Investing in Cannabis, Brand Builder, etc.

Note on the podcasts: Sometimes near the end of episodes, the guest speaker will indicate he/she is open to talking more with listeners and may even give their email out. I've only reached out twice but one of them was a founder of a cannabis fund who I ended up in early-stage talks with on possibly joining their team.

Check out my blog EjAhead.wordpress.com
  • 2
 
Apr 12, 2020 - 7:31pm

What drew you in to the cannabis industry?
What was the interview process like for that?
What kind of cannabis startup? Are you plant touching or non-plant touching?

If plant touching - what kind of product offerings?
If non - which aspect of the vertical do you serve?

You mentioned cannabis operator is kind of where you want to land for the remainder of your career - do you think an MBA could benefit you?
Do you see your current position as a stepping stone to another position in the industry or do you think the company has a good shot at taking off?

What are some of your networking strategies?

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