I'm currently finishing up my first year at a BB - got an offer to join a start-up VC beginning next month. The founders are very accomplished in the field, and have deep connections in the VC/PE world - all have either started their own company or managed other funds (though not big funds). But then again, it's a newly formed company.
A note about my bank - almost all the MDs in my group have either been laid off or went to boutiques. The bank has been struggling and has had 2 rounds of layoffs already. I'm afraid if I stick around that first I'll get canned as well, and secondly, deal flow will be way down and I won't have much to bring when speaking to PEs. I've been in contact with headhunters about 2010 PE/VC opportunities but seems that they have been pretty quiet.
If I go VC, the upside is big but also risky. I doubt with the partner's backgrounds that it will "fail," but if it's just mediocre, what would my options be coming out? I know VC skillset isn't totally transferable...
Can't give you any insight, but thats an incredible opportunity. I'd take it in a sec.
It seems that you want to take the VC position, but just need some of us to tell you that it's a good move. Well, based on what you're saying about your group, the bank, and the fears, it sounds like a good move. With a strong VC senior team, I'm sure you can land some solid recs to go back to B school or pursue another opportunity if you would like to in the future. Then again, if the firm picks up steam and does well, you may not want to move on anyway. Make the move, don't regret it and enjoy.
IBanker www.BankonBanking.com Articles, News, Advice and More Break Into Investment Banking
Take the opportunity. The biggest downside of joining the firm should be the lack of job security, but it sounds like you have even less job security at your current bank. If VC is what you want to do after your 2-years, may as well make the transition now. Besides, it will get you out of your second year as an analyst!
~~~~~~~~~~~ CompBanker
Damn I would take it just for the thrills..
Thanks for the advice guys! BankonBanking, you're right in that I do want to take the VC but need some reassurance from others in the field. I think going into a BB I was pretty name obsessed as far as trying to go for perhaps a more well known firm after two years - and not limit myself too quickly by going to a small fund. But I think since this is a startup with well respected partners it's a different story - and always exciting to be part of something new. Plus my bank is a piece of crap now and will probably screw me over soon! Pretty sure I'll go for it...
If you have faith in the founders than go for it. I once worked for a tiny five person firm and the owners seemed happy with what they had, i.e. didn't want to work too many hours and that meant not having too many opportunities to advance or make more money.
I saw a great opportunity with that firm, but lost faith in the two partners and walked away.
Some things you need to consider:
Do you plan on pursuing an MBA later on ? If you do, then I think the VC position is a plus
Do you have an interest in the sectors they focus on ? I'm angling for a position in VC too but honestly, I wouldn't work for a VC firm that focused on SaaS or Biotech.
If you have a genuine interest in VC, potential career path for you could be to join a portfolio firm and later transition into a Associate role.
Know what you want though, PE is vastly different from VC obviously and the skill sets don't really transfer. So if you want to do PE, hold on to your current role and wait for your time.
All in all, it sounds like an excellent opportunity.
I'm assuming the small firm already has their fund raised? If not, there could be some trouble ahead for such small fund trying to raise money from LPs in this environment. If the fund is raised, I'd definitely go for it. I'm moving into my 2nd year as an analyst at a small VC firm. You will get to meet interesting people, check out a ton of companies, and most likely be involved in all aspects of the investment process with such a small firm.
Working at a startup VC fund (Originally Posted: 11/20/2013)
I have an offer to join a startup venture fund run by a former partner and relevant professionals in the industry. Right now, I'd be helping the fund raise its first round, and sourcing deals after when/if this happens. I've been told this could very well translate to a full time VC analyst/associate position after I graduate, and I'm wanting to get some advice on how exactly I should vet this VC prior to jumping on board.
My view is that you should closely examine the partner's track record and experience - a lot of whether or not the fund will be able to raise capital will depend on that.
Can you give a little more background? So are you still in college? When you say "a former Partner", of what? A brand name fund or a random group with 1-2 funds in its history?
I jumped to a new fund as it was in the last 3 months of fundraising, would be happy to provide some perspective if I feel it is relevant.
Sent you a pm @TheBigBambino
If you're still in school you have nothing to lose. Go for it. Interning at a VC, even a no name fund, while still in school is really impressive. If it works out you'll be in early at a growing fund. If not you'll still have the experience on your resume to be in great position to recruit full time. I don't see why you wouldn't take this opportunity if you're still in school.
VC Start-up (Originally Posted: 05/10/2013)
So, I recently came across an opportunity at a VC start up. It was started by an ex big 3 consulting guy. From what I can tell, the firm is in the process of raising money and has invested in one tech start up (very small think 5million). Given this infancy, job security seems pretty bad. But, I am new to VC and was wondering what the chances for a VC like this to go bust in the next 3-5 years. I am currently working at a very stable company but i do want to venture out for more challenges and want to weigh my options before I do so.
Also, during the interview, is it acceptable to ask how much money the firm was able to raise?
Upwards of 80%. VCs back on average 15 projects, 10-12 of which they expect to fail, 2-4 of which they expect to make their money back on, and 1 which they expect to be a blockbuster and justify the rest of the investment.
So chances are a start up vc won't pay you that much in salary? I don't expect to make banks but still want to be able to pay my bills on a regular basis. The opportunity seems very exciting but I sadly do not have rich parents or a lot of savings to fall back on. ^ are you in VC any chance? If so, can you share some of your experiences?
You shouldnt expect to make bank, no. Some of these places, particularly the more well funded ones, can be very competitive, and often are with programmers and designers. Im not sure what youre applying for but in general I think the idea is that you can get more responsibility early on and as the company grows, though its my impression that this idea is overstated. An mit guy I know who worked at a startup for a year didnt get payed at all there, before he switched to an investment bank - he later attended hbs. So even smart guys going in to these places dont necessarily make out as hoped.
togepi, I think the OP is referring to working at a venture capital firm, not a VC-backed start-up.
Just because the VC has just started raising money doesn't mean job security will be bad. Many VC's, at least when they start, the partners/founders actually fund the VC and/or new investments themselves out of their own money until they can raise a proper LP fund. The success of the VC is highly variable on the founders/partners...
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