A Job in Venture Capital and Private Equity Firm: An Overview

Meta Description: People who are focused to have a career in finance may look into options like private equity jobs, jobs in Venture Capital or Hedge fund firms.

Private Equity (PE) firms and Venture Capital (VC) firms invest in companies and exit by selling their investments. The difference is that they buy stakes in different types and sizes of companies, invest different amounts, and claim different percentages of equity in the invested companies.

What are PE and VC firms?

PE Firms:

PE firms buy established companies facing downswing. They increase operational efficiency and sell them for profits. They can invest around US$ 100 million in the companies they buy. PEs buy companies belonging to any industry. They use both cash and debt as well while buying the firm.

VC Firms:

VC firms identify the start-ups or other companies in need of money, invest and share revenue or sell the stake. They may invest about US$ 5 million or higher in startups. VCs restrict themselves to certain industries that are usually dominated by biotech, technology, and clean technology. They use only equity while buying.

So, both the firms are different from one another and likewise the careers too. Depending on the profile, the careers in these finance industries vary.

Hiring in PE and VC firms

PE firms: PEs attract investment bankers and MBA graduates. They hire operating partners from a pool of senior managers having experience in various industries. During the interview process, they focus on your financial modeling skills.

Getting into private equity jobs is challenging. The companies look for candidates straight out of college, professionals who have worked at an investment bank for two years, and candidates who have secured MBA programs.

VC firms: VCs attract professionals from various backgrounds such as business development experts, product managers, consultants, entrepreneurs, or bankers. During the interview process, VCs from biotech, healthcare, and clean-tech asks for technical questions to know your in-depth knowledge and opinions of the industry. They look for networking qualities, market understanding, and capability to bring deals.

You may get into the VC jobs with a pre-MBA, post-MBA or senior level qualification. At the pre-MBA level, they consider bankers, strategic consultants, and business development professionals. At the post-MBA level, you should have graduated from a top business school. At the senior level, experience in a big company and cultural fit is essential. A science or engineering graduate with experience in investment banking can also get into VC firms.

However, both PE jobs and VC jobs require good communication skills, source investments, and experience in deal handling and closures.

Career Path in PE and VC firms

To climb up the career ladder, you need to source good deals, build strong relationships with investment banks, recruit good management for portfolio companies. Above all, networking is the most important talent for both firms to stay ahead of the curve.

Exit Opportunities

It is difficult to go from VC to PE but it is easy to go from a career in Private Equity to VC. After a PE job, several consider joining hedge funds. After a VC job, many launch a startup or become an investor.

Wrapping Up

A job in PE or VC firms would suit you if you are good at finance and is a people person. Pursue your interests to steal the deal.

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