Q&A: Leaving PE After 2.5 Years for Corporate Finance

Just locked down an offer to join a startup as a Senior Finance Manager and figured I'd have this Q&A before I start my new gig later this month. Going to keep this post short and sweet and open up the floor to questions - happy to provide more color about my prior job, decision to move to an operating role, interview process, etc. Quick background / context below:

  • Left after 2.5 years in PE at a large family office
  • Did a mix of LP investing / co-invest / secondaries / occasional direct deals
  • Was an early promote to senior associate
  • Previously spent just over 3 years in IB at a MM (left as an A2A)
  • Bay Area-based

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Comments (49)

  • Analyst 1 in PE - Other
Mar 11, 2021 - 12:35pm

Hey - I'm just about to join a secondaries firm as an analyst. They focus mostly on GP-leds but also do a bit on the LP-led side. What motivated your transition to the operating side? It doesn't seem like a very common move, so I'm curious to hear your response. Thanks!! 

Mar 11, 2021 - 6:02pm

From below: Came down to a combination of better WLB, wanting to do something more meaningful, getting hands on operating experience and truly understanding how businesses are run and work, and just being a bit disillusioned with the world of "high finance" in general. 

But to expand on the operating piece - wanted to be intimately involved in the daily operations of a single organization instead of jumping from deal to deal (personally found PE to be too transactional still), and also understand how a business really works because we all know that a lot of things aren't just a % of [insert whatever metric here]. It's also easy to say "CAC is too high" or "need to reduce churn" as an outsider and maybe giving some advice on how to solve those, but firsthand being involved with executing on both of those problems is a very different story.

Mar 11, 2021 - 1:14pm

Thanks for doing this - just a couple of questions here:

1. What were you specifically looking for from your pivot away from PE (i.e. WLB, new skills / operational exposure, something that was lacking in your PE role? etc.) 

2. Why a start-up vs a later stage / F500 public company? What sealed the deal / attracted you in terms of the this Company that you're joining (i.e. comp, product belief, intelligent people

3. Is your role in Corp dev, strategic finance, FP&A or a hybrid of those given the size of the Company?

4. What was the interview process like - case-based / modeling, what kind of technical questions. Did you find it challenging and how did you prepare for it?

Most Helpful
Mar 11, 2021 - 5:58pm
  1. Came down to a combination of better WLB, wanting to do something more meaningful (especially compared to the firm I worked at where the clients were so wealthy I could've lost every $ I deployed and it wouldn't have made a difference to them when it really comes down to it), getting hands on operating experience and truly understanding how businesses are run and work, and just being a bit disillusioned with the world of "high finance" in general.
  2. Startup over F500 because of increased ability to make an impact, more exposure to senior management and potential investors, broader responsibilities instead of being siloed into one specific function or business unit, the prospect of building / growing a company appeals to me, greater potential upside via equity, and just feeling like at a F500 or even like a late stage startup I'd be bored and more of a bean counter if you will. Generally speaking was looking to target "established early stage startups" (think Series B-D+, $50M+ raised, less than 500 people overall and less than 5 people on Finance team excl. accountants / controllers ideally) that were leaders in their space and either were truly disrupting a market / industry or had a mission-driven mindset. Picked my new company due to impressive management team (including w/in the Finance org - did some of my own ref checks), belief in the business prospects / area of the market the firm is trying to disrupt, incredibly fast growth to date, strong investor base, and then combination of comp + title + lean team + culture fit. Something I was really watching for is what "tier" of citizen the Finance team is w/in an org - in some places it's really just a cost center focused on backwards looking financials (typically led by ex-accountants), whereas I wanted to be at a place where Finance was truly helping drive business decisions and shaping the company's strategy and vision. Company culture was also a big thing for me, and really it was a holistic view instead of focusing on any 1 or 2 specific factors. 
  3. Officially role is w/in FP&A, but given stage of company and size of team is a hybrid role that will be involved w/ everything from fundraising to forecasting to market analytics and whatever ad-hoc requests / strategic initiatives that may come up. Will be fairly focused on owning the revenue model and forecasting for sure, but there should be a ton of variety from day to day.
  4. Started selectively recruiting in Q4 but didn't really kick off the process until after the holidays. Applied to 29 companies (mostly through online apps), interviewed at 13 places, had case studies at 10, and final rounds / hiring panels for 8 (withdrew from process for 2 firms otherwise 100% conversion from case study to final round). Each process was fairly similar - initial phone screens and if a recruiter / HR handled that, then a follow up convo w/ somebody on the actual Finance team, then case study. If HR wasn't involved then it would typically go straight from 1st round to case study, but did have a couple places where 1st round was w/ somebody more junior and 2nd was w/ team lead or other senior member. Some places had a case study debrief and then a separate hiring panel, while others combined the hiring panel w/ the case study debrief session (less common). Case studies included modeling a public company, modeling the actual company itself, recreating some real world exercise (e.g., evaluating hiring plans or new geographic expansion), and also had 1 place that was more of a Biz Ops hybrid role which was a data analytics exercise done all in SQL. Toughest part for me honestly was juggling multiple case studies at once which got pretty rough at times timing wise, and also giving presentations over Zoom sucks since it's so hard to read the room and it feels so much more artificial. 
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  • Analyst 1 in IB - Ind
Mar 11, 2021 - 7:46pm

Hate to be that guy, but comp #s at the family office and expect comp ( base / bonus / equity ) at the startup? Thanks for doing this

Mar 12, 2021 - 12:25pm

Associate: 135 base + 130 bonus

Sr. Associate: 150 base + 160 bonus

New role: 185 base + 5k options w/ annual refreshes, no cash bonus

Edit: Opus has some good resources on comp ranges - 2019 breaks out by location, 2020 doesn't (https://drive.google.com/file/d/1nF8wPb7tw5LrH7yGvw1TXh2XC6DZiG9W/view and https://www.joinopus.com/startup-compensation-guide)

Mar 12, 2021 - 12:32pm

Thanks and to be clear, directs were rare since my team was incredibly lean and were pretty much always for minority stakes, definitely wasn't staffed up enough to lead majority stake txns. IMO team was fairly sophisticated but there was a pretty big spectrum - certain members were incredibly impressive w/ high pedigree IB, PE, operating, and LP experience. Others you could tell got lucky in following the right people to be at the level they were at and were often figuring things out for the first time / had a fake it till you make it type approach to things, or talked a big game but really couldn't back it up that much.

  • Intern in IB - Gen
Mar 12, 2021 - 9:51pm

Have a question related to coinvestment/minority investment, what can one do as a minority investor to drive returns for the deal? Heard in one Temasek presentation that even they are not involved in the day-to-day operating decisions, they still hold conferences for the company to generate business leads that way. What are some other options that you've come across?

Mar 12, 2021 - 1:04pm

Been contemplating a similar jump to corp dev roles (2 years IB, 3.5 years of PE) but have run into two big road blocks.  My experience is pretty generalist focused and I get the sense these roles are looking for deep industry expertise at the more senior/manager roles (versus the post-IB roles).  I've also been told directly that I don't have enough experience for a role that would report directly to a CFO but too much experience to work two levels below.  Did you run into these issues at all?

Mar 12, 2021 - 5:47pm

I definitely came across seniority problem a lot - perceived as too senior for more junior roles, too junior for more senior roles.

At the end of the day it's a #s game and I applied to everything from analyst title roles to director titles and got interviews spanning that entire range. Some people care more about potential / horsepower, others want you to fit into a specific mold. Just got to find a place that is willing to hire good athletes and not just checking boxes to make sure all the exact parameters of a JD or fulfilled. It was funny to be rejected from an associate role at 1 company and then get an interview for a manager role at another, when both companies were very similar in stage / size and core job responsibilities would've been very close other than the seniority factor.

And I don't think being a generalist is really an issue, except if you're applying to tech firms a lot of them drill in on familiarity w/ SaaS business models, which makes sense. Was luckily able to pull on a couple of past experiences even though I wasn't a SaaS-focused investor + a lot of self studying online of course. Fintech was honestly the sector where people seemed to care the most about prior industry experience. But yes, biotech will probably also care in making sure you understand like the drug discovery process and how to model things out since so many outcomes are binary (or binary-esque).

  • Analyst 1 in IB - Ind
Mar 12, 2021 - 7:09pm

Mind sharing what resources you used to get familiar with SaaS business models / tech in general? Interested in recruiting for similar roles in the future from a non-tech coverage group.

Mar 12, 2021 - 1:16pm

Congrats on the move. I am in nearly identical shoes right now - 2.5 yrs into PE and considering moving to a Corp Dev / Strategy type role at a late stage start-up. I want to leave for similar reasons too. Seems I'm looking at a lower ranking title and a bigger paycut though. 

A few questions out of curiosity and seeking some perspective. Feel free to answer with yes/no or more detailed responses.

1. Were you up for VP any time soon at your PE shop? Did your firm try to dangle any carrots to entice you to stay?

2. How far, if at all, did you negotiate comp / title for the role you wound up taking (and any others that reached that stage)? Were companies generally open to negotiation on this front? (asking cause I always intend to negotiate for these roles and have had mixed experience so far)

3. Again on comp, was cash bonus and/or higher equity comp an option at all? Did you prefer to take a lower risk (IE, more cash base, no bonus, less weight to options) or was that just what the firm said was available?

4. Were all the roles you interviewed for similar seniority to the senior manager level?

5. Is the new role directly focused on the same industry/sector/vertical your PE/Banking experience was focused on?

6. Was the final role your top pick from the initial broad opportunity outreach?

Mar 12, 2021 - 6:07pm
  1. The promote structure at my old shop was pretty fucked up and they tended to try to hold people back as much as possible. They actually removed the VP title for my team so the jump would've been straight from Sr. Associate to Director (of course now it looks like it might be being reinstated? Total shitshow and amateur hour). I actually didn't have anything lined up when I left and I wouldn't have wanted to keep working under that team culture anyways.
  2. Decent negotiations primarily on comp. Especially when applying for more junior positions that was something both the companies and myself usually hit on fairly early knowing I was on paper overqualified and would be more expensive. No point going through the entire process just to have things fall apart due to differing comp expectations. Title was less focused on personally, more making sure the role and responsibilities were right and understanding how promotions / career pathing looked. So would've been ok coming in as an associate for example as long as it was understood that if I proved myself I didn't have to stay x years just to be promoted.
  3. There certainly was some flexibility in terms of cash vs equity, but at some point there are caps on one or the other, or both. Like the offer I accepted had way more leeway to push on base than equity.
  4. Everything from analyst titles to director, but primarily manager level. Title structures vary though and usually checking years of experience was a good way to see if I'd be a fit or not.
  5. Completely different from my banking group and my PE experience was fairly generalist.
  6. To be honest it was not at the beginning. But as I went through the interview process my conviction increased over time as I got to know the people, got a better sense of the business and its growth trajectory, and ability to make an impact. Certainly top 2/3 by the end (didn't have a strict 1, 2, 3 as each role had pros / cons over the others).
  • Analyst 1 in IB-M&A
Mar 12, 2021 - 4:50pm

Do you think you would've been better off going to a startup immediately after Banking? Currently unsure what route I want to take post-analyst stint and PE and Corp at series C-D are at the top of my list. Thanks in advance.

Mar 15, 2021 - 1:05am

I think if you're dead set on going corporate, joining directly post-banking can make sense. But given you're considering PE as well, you should do PE first IMO. I'm sure you know this already, but PE -> corporate is a fairly easy move and it's a story that makes a lot of sense to people (many of your interviewers will have taken a similar route themselves. But going corporate -> PE is much harder and you'll probably have to get an MBA along the way or make that move once you're much more senior.

Personally I'm glad I had my stint in PE first as I learned a ton and having actually sat in an investor seat will be really valuable when being involved w/ anything related to fundraising. And in the grand scheme of things it was only a couple of years and I've never been somebody that planned their life out step by step. Sure I'll probably not be as familiar w/ certain corporate-specific concepts / tasks, but PE improved my personal toolkit / playbook a bunch.

Mar 18, 2021 - 11:25am

I personally only looked at strat fin or FP&A roles with the exception of 1 strategy role and didn't apply to any corp dev roles. Wasn't that interested in corp dev due to a combination of me wanting to move away from a transaction-oriented seat, looking for a role where I'd be working across the entire company, and also targeting earlier stage firms where there often weren't dedicated corp dev roles. Strategy roles I just didn't think I'd be as competitive if going up against any ex-consultants and also just didn't see as many of those roles (likely because of the earlier stage orientation of my search as well).

Personally strat fin and FP&A were perfect for me because I wanted to get a comprehensive view of an entire organization and not just being responsible for 1 part or a subset of the business. Wanted to learn how all functions of a business truly work and understand the key drivers of the full company - the comprehensive view was really important to me in what I wanted to do next. For later stage or any like F500 companies I would not have wanted to join a strictly FP&A role since you're likely going to be siloed into pure FP&A work which is less interesting to me. At startups strat fin and FP&A often overlap a bunch or there is no distinction at all and it's a broad role with a lot of strategy elements to consider. 

Mar 15, 2021 - 4:14pm

What recruiters / websites did you use to find roles? I know of Opus and Built In New York for startup jobs but unfamiliar with others.

Congrats on the new role. Currently a senior associate and starting to consider doing something like you are pretty soon.

"My name's Ralph Cox, and I'm from where ever's not gonna get me hit"

Mar 17, 2021 - 12:48pm

Traditional finance recruiters weren't very helpful at all - Opus probably the best and even then didn't see that many compelling opps from them. Had some other random headhunters such as DeWinter Group reach out to me who were more helpful, but otherwise relied on a combination of job boards from Angel List, Built In, and Linkedin - beauty of corporate roles is they're not usually gatekeeped by some rando HH and it's usually very transparent to see which roles are available online. Hit rate online was actually super high, certainly way higher than what you'd ever expect for finance roles. Also regularly looked at Google's jobs listing features. All this w/ the caveat that I was looking at startup roles primarily.

Mar 18, 2021 - 7:14pm

Thanks. How did you get your role if you don't mind me asking? LinkedIn? Built In?

"My name's Ralph Cox, and I'm from where ever's not gonna get me hit"

Mar 18, 2021 - 10:18pm

Not really, figured this would be the best stage of my career to jump to an operating role and really wanted to do something that wasn't so transactional anymore. Co-invest doesn't interest me that much anyways since you're not driving the deals (although not having to deal w/ bullshit like HR diligence is nice), timelines can be insanely accelerated at times, and there's always the adverse selection risk. Secondaries potentially more interesting but still transactional and seems like a lot of places have terrible work life balances.

  • Associate 1 in PE - LBOs
Mar 17, 2021 - 1:03pm

Looking to make the same move myself. How did you diligence opportunities given the volatile nature of startups / equity comp? Were they open to sharing financial data / fundraising decks, or did you have to scrape stuff together yourself?

Mar 18, 2021 - 10:29pm

A lot of it was thinking like an investor and trying to reach my own conclusion about the company / product and if I thought it would be a truly viable business or not, supplemented by reaching out to my network and seeing if they had thoughts on different businesses (ex: if I was looking at a company w/in my old banking coverage, would ping my old MDs and see if they had any thoughts). Leveraged Pitchbook a lot to get a sense of latest valuation, growth trajectory, and who was in the investor base. If you have LP friends, they can likely be helpful as well and see if there are any case studies they have from the GPs themselves about the companies.

Then a lot of it was just doing diligence throughout the interview process based on my conversations with people, asking questions such as "when do you anticipate your next fundraising round to be." Often the case studies will be modeling the company itself and you can kind of see where the companies are at approximately, or at the very least really understand how the business model works. There were certainly cases where I completed a case study and thought "this seems like a stretch to get where they want to be." You can definitely get a sense of how open some people are to talking about things also - some interviewers were very open on fundraising process and where their last valuation mark is and would straight up offer up what multiple increase most recent term sheets they received were from the prior round.

Mar 22, 2021 - 3:13pm
  • When I joined: Probably averaged 60
  • After new group head took over: Probably averaged 75-80
  • During COVID w/ new group head still in place: 80-100+, with worst week less than 30 hours of sleep, so do the math

Group head changed culture A TON and people started quitting as a result which didn't help w/ morale and hours when we were already stretched thin to begin with, and then didn't prioritize backfilled hires at all or do anything to fix the problem, taking the tone of "you should just be happy you have a job" blah blah blah and treating everybody as a commodity, not as team members in any way.

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