I'm wondering what is it like to sit in an investment committee (from the perspective of an associate all the way up to partner). Is it fun? Boring/long? At what point do you push the button to invest? What are the memos like? How do you know if everyone has exhausted listing all the risks involved?
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This varies a lot by firm, but from my experience is pretty anticlimactic and usually involves preparing answers to a lot of questions which (a) usually aren't very important and (b) don't get asked -- purely so your principal and VP can CYA in the event of a black swan partner question. ~~ Grain of salt: only been to a handful, and level of anal retentiveness and BS varies by firm
That is a great wonder. Saturo Iwata is a great example to start the wonder. He started as a programmer at subsidiary of NINTENDO up to become a CEO of NINTENDO. He is the first one who was not a family considering NINTENDO was running by families.
In reality this scenairo is only happens one out of millions. What am I saying is, from an associate there is no way to become a partner within 10 years If you are not a family member.
The "memo" was a 30-40 slide deck that had another 60-80 slides in the appendix. This was an ultra-dense behemoth that explained everything about this company from industry analysis to personality tests conducted on top management to legal minutiae about the transaction structure. Usually walked through it in 90 minutes with partners constantly asking questions throughout and then another hour to ask questions and drill into everything. I was the lowly intern that had my piece that I knew really well and partners were not hesitant to smash my face in and make sure we were 100% confident about every conclusion I came to. I probably only spoke for about 5 minutes total but it was tough keeping calm. Their insane IRR over their decades of investing speaks to the efficacy of the process though.
There was a formal checklist of items to get through and everyone would have it in front of them. If they literally had all the boxes checked off then they moved to vote. I forgot the % needed to get something to pass. Dissenting opinions would have to be formally expressed and addressed. Probably took about 3 hours total to come to a conclusion.
More or less a joke where one partner tries to justify his deal to the other partner(s) and advisors. It's really nothing more than a formality.
The investment memo itself is obviously extremely important (as it summarizes your investment thesis and 3ish months of diligence work that has gone into proving out said thesis), but in my experience, the discussion typically deviates from the memo or it focuses on a singular point for an overly long period of time. I'd like to think this is because every investment committee member has spent at least a few hours studying the memo, but my cynicism leads me to believe that's not the case.
This is so painstakingly true. I don't think any partner or adviser has ever read past the few summary slides of my memos
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