o you want to work in VC or Private Equity, but you’re either not sure if you want to work directly at a firm or a fund, or perhaps you're having some trouble breaking in? After all, there are so few jobs directly inside private equity and venture capital funds, and the jobs that are available are incredibly competitive.
Lucky for you, there are several ways to earn money and work in VC and PE other than actually getting a job with a firm. Some of these include working as a consultant, an interim executive, a board member, a deal executive, an executive in residence, or as an entrepreneur in residence. Below, we’ll dive into each one of these in more detail. Some of these are onramps to joining a firm full-time.
David Teten, founder at emerging manager Versatile Capital, recently hosted a discussion for GoingVC on alternative ways to work with private equity and VC firms, other than just working directly for a firm. This post is a summary of his detailed essay and presentation on working with private equity and venture capital funds. You can see his video below and his full deck at the end of this essay.
Join an Expert Network
Have expertise in a certain subject or industry? VC and private equity firms are constantly looking for subject matter experts in certain verticals to share their expertise with their portfolio companies.
And how do they find these experts? Many turn to organizations called Expert Networks. Expert Network firms source subject matter experts from various domains and pair them with clients seeking relevant knowledge on a particular topic. They can provide VCs or PE firms with access to experts from all the forces that impact a company. David Teten was formerly CEO of an expert network, Circle of Experts, which he sold to Evalueserve, a knowledge process outsourcing company.
Typically you’ll share your expertise in five main ways: phone calls, presentations/in-person meetings, surveys, white papers, and sometimes in-depth consulting projects.
There are also many benefits of joining an Expert Network. Beyond the potential for healthy compensation (Expert Networks typically pay the expert $100 to $500 an hour) for minimal time investment, you also get to interact with world-class investors and corporations.
If you’re going to be a subject matter expert and member of an Expert Network, there are several things you can do to increase your chances of landing lucrative gigs from these networks.
For starters, it’s critical to keep a detailed, up-to-date profile. Also, make sure you’re consistently building up your searchable profile on Linkedin and your personal website. And highlight your past experiences and mention other firms you’ve worked with to increase your chance of getting gigs.
Among the largest and most noteworthy expert networks are GLG, AlphaSights, Guidepoint, and Third Bridge. Versatile VC’s first portfolio company is a new, highly-automated expert network, Xperiti. (David notes, for friends of Versatile VC who work at qualified consultancies or investment firms, Xperiti will offer a complimentary consult with one expert. Email sales@Xperiti.com and introduce yourself.)
Consider Becoming an Interim Executive or Consultant
Compared to an Expert Network (where engagements are typically very short), Interim Executives and Independent Consultants typically engage in projects of 2-6 months duration.
And if you really want to get in the consulting game, there are tons of firms out there who can act as intermediaries. Some firms go as far as setting you up with gigs, taking care of payment, and helping you build up your consulting profile. For this, it’s important to find and connect with the firms that specialize in your specific niche.
The consulting route can be especially attractive for folks who are in transition and might not want to commit to a full-time role. However, even if you’re working full time, you can build up a nice side hustle this way.
If you have prior consulting experience, especially at one of the big firms, you’re at an advantage. However, not having prior experience at a big consulting firm doesn’t mean you can’t be successful here.
Adjacent to the Consultant is the Interim Executive, who typically works with a specific company for 2-12 months. Compared to the Consultant, the Interim Executive gets a bit more involved with a company’s day to day. This has also become more common in the last couple of years with the economic recovery for executives to use this model as a foot in the door or way to test the waters for their next position.
A few, well-known networks to check out if you’re considering an Interim Executive role include Business Talent Group, Catalant, Eden McCallum (focus on UK and the Netherlands), EIM, Eleven Canterbury, Expert360 (Australia), ForteOne, HighPoint Associates, Impact Executives (UK), SMA, Talmix (UK), Umbrex, and 10EQS.
Join a Senior Advisor Network
Senior Advisors are an investor-sponsored group of senior executives who work closely with funds to source deals and/or portfolio companies and provide board service and mentorship.
Senior Advisors are tasked with helping senior management of portfolio companies solve some of the big problems they are facing with their company. They come on to share their business knowledge, networking connections, potential investors, and skills, so startup founders make fewer mistakes when building their businesses.
This position typically requires a monthly time commitment of 2 to 10 hours. Pay will vary based on the service given and may come in as a retainer or service fee. These jobs are highly coveted as the compensation can be very lucrative for working on a part-time basis.
Position Yourself as a Deal Executive
A “Deal Executive” (sometimes called an “Acquisition Entrepreneur”) is essentially tasked with looking for companies to buy and may even step in as CEO. As such, in order to become a Deal Executive, it’s imperative that you demonstrate a history of successfully leading a company at the C-level, or as a direct report to the C-level.
With this role, it’s also critical you offer a deal thesis or letter of intent to the investor when you approach a PE firm. A good investment thesis includes a few key elements:
- Clear definition of industry, in terms of niche, size, geography, etc.
- Transaction rationale consistent with the company’s growth prospects
- Basic financial markets analysis – trading range, feasibility, etc.
- Outline of value-creation opportunities and plan for pursuing them
- Explanation as to why you and your team are ideally suited to lead the effort
- Roster of 5-20 target companies
- Status of discussions with targets (if any)
- Thoughts on likely exit (IPO, strategic buyer).
Another important thing to keep in mind, is that PE firms are looking more for investments, not people. Thus, you should position yourself as someone who can bring in high-quality deal flow and the so-called “gatekeeper” for that deal.
The role usually pays a modest retainer with the incentive of a finder’s fee and/or CEO role in the new company.
Become a Board Member
Getting a board seat with a high-growth company is also highly coveted. Boards typically look for proven leadership, a squeaky clean record, synergistic industry expertise, and of course, the breadth of your network.
To join a Board, at a minimum we recommend sending your resume to all the major recruiting firms, as most top recruiting firms offer a Board placement service. Also get to work on building relationships with major investors in your sector, as that also increases your odds of getting invited to Board roles.
This space is also changing. Recently, there has been a massive push for diversity on Boards. Whereas before boards were primarily made up of older white men, now we’re seeing more women and people from minority groups on boards (although we still have a long way to go.)
Become an Entrepreneur in Residence
Certain VC funds, including Versatile VC, proactively seek out qualified Entrepreneurs in Residence. Although the role is constantly evolving, VC EIRs are usually previously successful entrepreneurs who are building a startup leveraging the VC’s support.
In addition, they may have responsibilities to support existing portfolio companies and/or evaluate potential deals. Many EIRs are compensated with zero income until they found a company, but there are some who are earning a retainer typically in the range of $90,000 to $150,000.
Join a Portfolio Company
This one is pretty self-explanatory, so we won't go into too much detail on this. But the last option we’ll talk about is getting a job at a portfolio company. If you’re looking for a job with a tech company, VCs can be a helpful resource here. They know exactly where the growth is happening amongst their portfolio companies and can make warm introductions.
It’s also important to mention if you're looking for a job at a startup, you should be tracking who is in the process of getting funded or has recently closed on a funding round. VC investment is a leading indicator that there will soon be a hiring surge at that company. Hiring is the number use of cash.
If you’re looking for some alternative ways to earn money and put your skills to good use other than working directly at a VC or PE firm, these avenues can be great to explore.
If you’re interested in more content by David Teten, check out his resources below, or see his blog at Teten.com.
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