Growth Equity Without Cold-calling
I have a background in IB and am very interested in working on the buy-side, specifically with young and innovative companies. I think that growth equity would be a great fit given that companies are young enough to still be very fast-growing and innovative, but still old enough that there is a significant financial aspect in the investment process.
However, it seems that at the junior levels at many growth equity funds, you job is basically just to cold-call. I'm more interested in the analysis, due diligence, valuation and investment parts rather than sourcing by cold-calling. Are there any growth equity shops where you don't spend a significant time cold-calling? Primarily looking for input on London, but US-based input is much appreciated as well.
You're not gonna like GE if you're against sourcing. Even seniors at the best growth shops are involved in the sourcing process at some level.
^ Above commenter nailed it. Not a knock on the OP specifically, but I see so much naive glamorization of "modeling" and financial analysis on this forum. Not a huge surprise considering it's tailored towards banking analysts. Guess what? No matter what field on the buyside you're in, but especially in VC, what gets you promoted and builds your career is not hard financial skills. That's commoditized. What will set you apart are relational and sales skills - can you consistently find great deals? Can you build a network that refers them to you early? Can you win over the entrepreneur and win the deal? Can you evaluate talent? Can you convince your partnership to vote for your deals? If I were in school today, I would kill to start at a GE shop where I sourced all day. That skill carries over forever. The 3-statement modeling, accretion/dilution analysis, endless comps, & LBO modeling are all things you'll stop doing once you're mid-level. Sourcing is an amazing skill to develop. Consider it a gift that you have the option of doing that early.
Great feedback, thank you. I guess that coming from a purely financial background from GS / MS and some internships at large PE funds, relationship building is new territory for me. The thought of betting my career on being good at sourcing and building relationships is scary as I have no idea whether I'd be good at it. Sounds like PE might be a better fit for me after all, given that the type of work in growth equity might not be what I'm looking for even if the companies themselves are extremely interesting.
In a growth equity seat, sourcing-focused but work on what you find. Everyone from associate to MD is oriented around sourcing day-to-day and will have 1, maybe 2 signed up in a given year - so the more important muscle to build is finding and building relationships with great companies vs. crushing an LBO. If you are good at your job you shouldn't feel like it's blind cold-calling but instead building thematic understanding of dozens of interesting verticals by having conversations with hundreds of CEOs a year. Nothing wrong with loving the analytics more, but that's more a fit for pure LBO fund territory or in some cases pre-IPO / crossover investing (though dry of late)
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