Venture Capital and Growth Equity: Pipeline and Industry in general

I'm wondering if anyone has any insight into getting into VC or growth equity out of undergrad. Is there a proper pipeline to get into one or is it all based on who you know/previous work. I find VC really interesting but from everything I've read, it seems as though to work as an analyst out of undergrad you really have to know someone. Also, I'm currently interning at a PE firm and from people I've talked to they all seem to say that PE is a smarter choice than VC but I just don't find it super interesting. Growth Equity seems to be similar to both and kind of a mix of the two. Does anyone have some insight into the relation of growth equity to VC and PE? Also, any insight into the pipeline process would be very appreciated.

Comments (23)

Aug 5, 2017

Insight venture capital is a good start for NYC growth equity. I was in a similar situation and straight up cold called analysts/LPs. It worked and got some interviews. They value persistence and knowledge. You gotta really grind to find an opportunity if you don't already know someone.

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Aug 5, 2017

I was planning on just compiling a list and cold calling/emailing alumni and analysts. Did you end up working in VC post undergrad? If so did you get an internship with a VC firm first or just apply for a full-time position?

Aug 5, 2017

I had an offer with a "b level" firm, but ultimately decided to go into consulting instead. In order to get to a great firm with heavy deal flow you really need to have experience within startups/tech/finance. It is unlikely a place like sequoia, first round, union square vc, etc will want to hire you if you have no real experience. You definitely can get a job within vc, but I thought it would be beneficial to do the whole consulting --> startup --> mba --> vc or ib/vc thing.

I spoke heavily with a guy from a large tech/news company that worked as one of their 6 analysts in their internal vc group. He kind of advised me to steer clear of the b list places if you want a career in vc at a top firm later. However, if the right company gave me an offer, I would do it in a heartbeat. It all depends on your goals. Call everyone and be persistent. Make them want to have you!

My path doesn't have to be yours and I know plenty of people who work in vc out of undergrad. I also had an internship/coop while at school.

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Aug 5, 2017

Thanks for the insight, I really appreciate it.

Aug 5, 2017

Getting into growth equity as an analyst is much easier than getting into VC proper. A lot of growth equity firms hire analysts to source all day and do small supporting diligence stuff. Typically the real meat of the work goes to associates. If you don't really care if you get into VC or growth, you'll have a much easier time with growth. There are a lot of growth equity firms in SF, LA, NYC, Boston that would take an analyst. Just find a list of firms, check if they have analysts, and reach out.

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Aug 5, 2017

Do analysts at GE places get promoted to associate and get more DD/technical/financial modeling work or are they kicked out after 2/3 years

Aug 5, 2017

It varies a lot. Stripes Group does it. JMI more often. Level Equity gives their analysts and associates the "associate" title so you can't tell. There are firms that internally promote but you'll have to do your research to find them. Often, when I'm getting drinks with someone that did 2 years as a growth equity analyst, they'll either say it was an incredible way to break in early (because they were at the right firm that developed their skills and gave them real deal exposure) OR they were miserable cold-calling all day.

It seems pretty split as the first group are typically at larger, better firms and the latter group wish they had gone into banking and then broke into GE as an associate. Some firms still have their associates cold call a bunch. You'll have to check out LinkedIn for internal promotes and glassdoor for reviews. Also look for former analysts at a firm and see where they end up. A lot of growth firms have decently structured systems that bring in 2-10 analysts a year per office so data should be abundant.

Aug 5, 2017

Do you know of anyone that got into growth right out of undergrad?

Aug 5, 2017

Yeah. Like 10ish people. It's not popular but positions are out there.

Aug 5, 2017

Did you know if they had prior internships at a VC, PE, or growth firm? I'm definitely interested in getting into VC or growth out of undergrad but I'd rather have experience as an intern first. I'm a rising junior right now and am interning at a lower middle market PE firm. I'm just trying to gauge as to how others went about doing it to see how I should try and handle recruiting this fall.

Aug 5, 2017

They all interned at the place they worked at full-time except for one. That one guy went to a top school and had a top BB internship he didn't get an offer back from. MF PE roles usually go to someone who has banking internships and then does a PE internship. MM PE firms tend to hire analysts much less. VC firms hire many associates and very few analysts. Growth is where the most open roles will be and the bar will be lowest. Pay will also be lower though. Expect to work 9-7ish at the more established growth firms with sourcing focused analyst roles. Very few weekends and 70-100K first year all in.

Aug 5, 2017

Thanks so much, this was very helpful.

Aug 6, 2017

Everything @jamiegreylongman said was spot on. I know 2 people that are in GE roles, one loves it and thinks she has the potential to make associate and really have heavy deal flow while the other is pretty unhappy and wishes he went consulting or banking prior. Do it up young blood

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Aug 7, 2017

Starting out in VC/growth directly out of undergrad is a double edge sword. On one hand, if you want to stay in venture/startups long term, you have a leg up in being able to focus on it from day 1 instead of having to grind through a banking/consulting program first. On the other hand, you lose the optionality of starting out in banking/consulting. If you decide later you'd rather do PE or hedge funds, or switch industries away from tech, it's really difficult to do that coming from a VC analyst role.

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Aug 9, 2017

Agree

Aug 9, 2017

This!

I started VC almost out of college as well. You will be pigeonholed into working for tech companies or other VCs for largest part of your career and switching will be much harder than starting out in consulting/banking. Given that I do want to stay in tech. It was been quite alright for now till now.

@ OP: Feel free to PM me.

Aug 7, 2017

wow great article

Aug 7, 2017

I did it. I would not recommend it. I've wrote about it extensively in the past. Can you do it, yes. Will it likely lead to your favorite outcome long term, no. I'd highly recommend IB/Consulting for 2 years and then go fight for an associate spot. It made my life much harder and pigeon holed my experience set. I'm saying this all even though I did just fine after my VC analyst stint so I know it can work out fine too, but it made my life just about 50x more difficult.

"If you want to succeed in this life, you need to understand that duty comes before rights and that responsibility precedes opportunity."

Aug 7, 2017

I worked at a small growth equity / vc firm in Puerto Rico; $120MM AUM but the experience was top notch. Although the fund co-invested in large deals with Advent/TPG, etc... , a lot of the deals were growth-equity plays with majority positions and I was able to work on a couple of startups founded by the funds Managing Partners. I've worked in various buy-side roles and it has been the best experience I've had because it is not purely transactional; there is a lot of hands on work (from marketing to operations, to HR), it was like starting your own business.

Something I miss a lot is working with entrepreneurial guys, purely focused on executing and getting shit done; different from the corp world where c-level executives are the first ones that kill the entrepreneurial spirit and promote boring politics.

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Aug 7, 2017

Did you work at this firm right out of undergrad? If so, do you think it held you back in any way for future job prospectives?

Aug 9, 2017

I worked right out of undergrad, since it was not a BB IB or recognized PE fund and given location,exiting was a little hard. Nevertheless, I could always tell the story that we were at some point minority owned by Advent International which automatically helped me get more credibility.

The hours were 70ish, and work on weekends so it was ok.

PROS:
1. Exposure and decision making at a young age. I was involved in hiring general managers, i was involved in selecting equipment suppliers, participated in BoD meetings as an observer.
2. A lot of hustling. My boss wanted to get into an industry and he basically told me, figure out who are the players bring in a couple of possible sellers to see if we can do something. I packed my bags, went on an excursion through the island meeting people in that specific industry (Agriculture related- I can PM you for more details).
3. Low-Risk mindset. These guys were all about executing so there was not much risk assessment donde; it was more like: the market needs another competitor for company x (monopoly) lets do it.

CONS:
1. Very hard to adapt to a corporate environment afterwards. I worked for a commercial bank afterwards, and then jumped to a telco to do M&A and corporate finance, even though both companies had revenue under $1b, you can see that mindset is very different. Not much ownership mentality and many executives are more focused on keeping it safe and doing good enough to get their next paycheck (and so on so on). I hate politics so it didn't work for me.
2. Less Transactional - of course i did due diligence, reviewed contracts, hired consultants, blah blah blah, but the work was more focused on executing business plans and growing the companies than making the investment or transaction as smoothly as possible. If your end goal is to be a transactional professional, i wouldn't recommend it. If you want to become a business person in all senses and understand all components of the business in detail, it is good.
3. Less prestige- pay was very bad but i decided money wasn't the main factor at that moment. I am sure I am qualified to work at many companies that right now would not hire me given that it is in Puerto Rico and the fund is not a KKR or Blackstone.

So based on my goals (work in M&A- corp dev for a couple more years and grow my business until I can leave my job) i think it is worth it. If you want to be a corporate guy or an investment banker, it might be ok but there are other career paths that might prepare you better.

Sorry for the grammar, im freestyling right now. Hope this helps you.

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Aug 9, 2017

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Best Response
Aug 7, 2017