Growth Equity Sourcing Exit Opportunities
I’ve seen a lot of conflicting responses on this topic, so I’m hoping to start a fresh discussion.
I’m weighing a Sourcing Analyst offer from a top growth equity firm (TA/Battery/PSG/Summit). If you’re a top performer you’re generally able to transition to the deal team after a few years, but I’m curious what my options would be in terms of exits if I didn’t make it. Is switching over to VC feasible? What about other growth funds where associates do a mix of sourcing and deal work?
Navigating the landscape of exit opportunities from a Growth Equity Sourcing Analyst position involves understanding the nuances of the role and how it aligns with various paths in the investment world. Based on insights from the Wall Street Oasis discussions, here's a breakdown of potential exit opportunities and considerations:
Venture Capital (VC): Transitioning to VC is a feasible path from a growth equity sourcing role, especially if you've developed a strong network and have a keen eye for early-stage companies. Your experience in sourcing deals can be valuable in a VC environment where identifying and evaluating potential investments is crucial. However, the focus in VC is more on the potential for disruption and innovation rather than the immediate financial metrics, which might require an adjustment in your evaluation approach.
Other Growth Equity Firms: Moving to another growth equity firm where the role includes both sourcing and deal execution is also a viable option. Your experience in sourcing can make you an attractive candidate for firms looking to strengthen their pipeline of potential investments. The ability to transition into a role that includes deal work will depend on your ability to demonstrate strong analytical skills and an understanding of the growth equity investment process.
Internal Transition: As mentioned, top performers in sourcing roles at top firms often have the opportunity to transition to the deal team. This path allows you to leverage your firm-specific knowledge and relationships to move into a more traditional investment role. Success in making this transition often depends on demonstrating strong performance, building relationships with the deal team, and showing a deep understanding of the investment evaluation process.
Corporate Development: For those interested in a more operational role, corporate development within a tech or high-growth company could be an attractive exit. Your experience in identifying and evaluating growth opportunities can be directly applicable to helping companies identify acquisition targets or strategic partnerships.
Entrepreneurship: Given the exposure to a wide range of businesses and business models, some sourcing analysts may choose to pursue entrepreneurship, leveraging their insights into market trends and growth strategies to start their own venture.
Further Education: Pursuing an MBA or other advanced degree can also be a strategic move after gaining experience in a growth equity sourcing role. This can broaden your skill set and potentially open up additional opportunities in investment banking, private equity, or more senior roles in venture capital or growth equity.
In considering these paths, it's important to reflect on your long-term career goals, the skills you enjoy using, and the environments in which you thrive. Networking with professionals who have made similar transitions and seeking mentorship within your current firm can also provide valuable insights and guidance.
Sources: Tech Growth Equity vs Tech Leveraged Buyout Firms, Breakdown of Post-IB Exit Opportunities, Breakdown of Post-IB Exit Opportunities, Advice Please! Growth Equity Interview Questions?, Q&A: Analyst --> Associate at a VC / Growth Equity Firm
I’m still in IB but just pulled out of process for a sourcing program. I talked to former associates who went to business school to consulting and to VC. Not as great of exits just given the nature of sourcing programs is all talking and little execution.
Good to know thanks. Just curious - did they mention any exits specifically or did business school seem like the best route out? Also was their fund along the lines of the ones I mentioned?
I can just say, it was Battery, very sourcing heavy but good fund. Yes business school unless you wanted to ops at a portco.
I don’t understand this sentiment. Considering sales becomes more of a focus the higher up you get in any industry, why would a sourcing background not be as beneficial?
Again depends on what you want to do. If you’re passionate and exceptionally good at sourcing you can make a career of it. But if you’re just above average at it and don’t have technical deal reps your value, at the mid level (VP to pre partner) is not always recognized. Not saying I agree just what I heard from former associates.
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