Landing a top private equity offer with zero finance experience

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Private Equity Opportunity

Today I’m sharing the story of how my friend Sergei landed an offer with one of the most prestigious and elusive private equity firms... with zero finance experience.

Some brief context: private equity (PE) firms use billions of dollars to purchase large chunks or outright buy entire companies. They then use a variety of techniques to increase the value of the purchased company over 3-5 years, before selling for a massive profit.

PE firms typically run very lean, with less than 50 employees. As a result, these jobs are incredibly well paying and notoriously difficult to land. It’s not uncommon for a PE associate just 2-3 years out of college to make north of $250k in cash compensation.

Regardless of whether you’re interested in PE or not, this case study is worth the read. Sergei was able to successfully break into PE by applying general principles that you can use for any industry.

Take this as a real example that it’s possible to break into any company or industry, no matter how difficult or competitive it may seem. I’ve included my biggest takeaways from Sergei’s story at the end of this article.

Q: Sergei, can you tell me a little about yourself?

I grew up in Canada in a very small town with not many career options. My parents were both engineers so I followed suit and went to an engineering university. However, once I got there I realized I didn’t enjoy engineering nearly as much as the students who were good at it.

So instead, I decided to work find a job in Product Management. Upon graduation, I joined a big tech company as an entry-level Product Manager (PM).

Over a few years of working as a PM, I came into contact with many business school graduates. This inevitably made me reflect on my career and long-term goals, and I realized that I lacked a lot of business fundamentals. Long story short, I decided to apply and ended up getting admission to business school for fall 2019.

Q: You mentioned you reflected on your long-term goals… what are those?

My long-term goal is to build my own startup. But this wasn’t always clear to me -- I didn’t feel like I was born to do it. Remember, I grew up in rural Canada not Silicon Valley.

But in undergrad I was surrounded by entrepreneurial people. As a result, I ended up working on a bunch of startup ideas in college. None of them took off, in part because we weren’t very committed with competing priorities like grades, internship recruiting, and having fun in college.

But it was a good training ground.

Over the years as a PM, I had the opportunity to take a broad view of what it takes to build successful products. This requires being able to think and operate at a very strategic level and is something I really enjoy. The goal of building my own company became more obvious through my experience as a PM.

Q: What if you’re wrong about your long term goal?

The way that I think about my career is trying to figure out what I like by testing a bunch of hypotheses (no, I didn’t pay him to say this). Generally, I also try to keep my options open by not pigeon holing myself into one role. My path thus far, from engineering -> product management -> business school, still allows me to pivot in case building a startup is not what I want. I could always go back to a big company.

Q: So you got into business school and have this hypothesis of starting a company one day… why are you interested in private equity? Where did that come from?

I think 3 experiences pointed me in that direction:

First, during undergrad when I was exploring alternative career paths outside of engineer, I noticed a handful of engineering friends went into finance. I enjoyed hanging out and talking with my finance-oriented engineering friends. It was fascinating to see how they transferred and applied engineering skills to the field of finance.

Second, after graduating I had a lot of friends who attempted building their own startup. They asked if I wanted to invest in their startup through a friends and family investment round. It was exciting, but I couldn’t see myself invest $10-$20k into their company. It’s just too risky to do with my own money, but I realized it would be cool if I was able to invest other people’s money.

Third, I briefly lived in China and got to work with the CEO at a Chinese startup. It was one of the most fun and exhilarating experiences in my professional life. I got to work on a variety of cross-functional problems outside of product development. For example, this founder was running out of cash so I helped him make pitches to prospective investors. It was interesting to observe his business through a business/investor lens versus my usual product/engineering lens.

All of this made me realize that if I could get some investing experience I would better learn the investor’s mindset, which would make me a better startup operator. That, and it would just be fun to immerse myself into a new field and test a new career hypothesis.

Q: Got it -- you decided getting some investing experience was a goal.  What next?

I reached out to my network and was very transparent. I basically told people about my long-term goal and why I think investing experience will help me achieve that goal. Then I asked, “are you able to help me?”

Everyone I asked was very helpful. One of the key things I learned is that by putting my goals out there, people could see I was authentic and they were willing to help me. Because of this, I got connected to decision makers at 3 VC firms: a top early stage VC firm in China, a growth equity firm, and a massive US PE firm.

Q: Can you explain the details of how you started the conversation with these funds?

Yeah, at a high level the approach was the same for each firm: I reached out to a second degree connection and asked for a warm introduction to a decision maker at the fund.

For the fund in China, I got coffee with one of their more senior US employees. She was quite friendly and after a short but lively conversation she invited me to join her on due diligence calls with entrepreneurs. This was a test -- she wanted to see what types of questions I asked the entrepreneurs to assess whether she would enjoy working with me. My first conference call with employees from this fund and an actual entrepreneur seemed to go well.

But I didn’t know what to do next, and she didn’t give me any guidance. So I messaged my friend who made the original introduction to this firm and she told me that she usually writes an investment memo to send to senior staff of the firm within 24 hours.

I had no idea what an investment memo was, but I stayed up until 2AM that night drafting my first one. Before turning in for the night, I sent the memo to my contact at the firm and she replied back, “great work”. Ultimately, the position didn't pan out because of circumstances out of our control, but she continued to include me on a couple of deals and it was a great experience for me to further validate that I would enjoy this type of work.

Q: And how did you break into the massive US PE fund -- I’d imagine that firm has a lot more processes and barriers?

Yeah, that was more complicated but basically the same idea. It started when I reached out to a senior employee at my current company who I had gotten to know throughout the last several years working together. This was part of the outreach I did to inform my network that I was looking for investing opportunities in finance.

I went to him and said, “do you know anyone who could help me find a job in an investing role?”

Coincidentally, it turns out he was grabbing drinks the following week with an old friend who is an executive at a large PE fund. He said he would bring my situation up with this executive and feel the opportunity out for me.

One week later, this PE executive emails me asking to grab coffee. This is the kind of guy who is constantly on the road. He was traveling to eight cities across the world in entirely different countries -- so we scheduled a meeting one month from when I replied to his email. That gave me enough time to prepare for this conversation. I knew by then I had to have my pitch down.

First, I needed to learn more about this firm. I went through my LinkedIn profile to see if I knew anyone who works there. Unsurprisingly, I knew nobody -- but it turned out I had a handful of 2nd degree connections.

For example, I knew one guy whose roommate was an associate at this firm. I reached out to him and he connected me with his roommate. His roommate was nice enough to chat, and he gave me a lot of fantastic context about the firm. I asked this guy all the basic questions: firm size, how much money they had to invest, organizational structure, culture, etc.

This was my first time I talked to someone at a large PE firm about investing -- you have to realize I knew nothing about this firm. I didn’t even know how prestigious it was considered. To me it just seemed interesting.

I repeated this with 3 other people by following the same pattern -- I asked someone I knew for an intro to someone they were connected with on LinkedIn who was affiliated with the firm. Through this, I was able to learn more about the firm, what makes it unique, and most importantly, practice my pitch for why I wanted to work there.

By the time my conversation with the PE executive came around, I felt ready. I met him at his office and he proceeded to interview me. He asked questions like “what do you think about this firm, our investment strategy, the team, etc.” Nothing too crazy, but he was definitely testing me. I knew there was no way someone this senior would schedule an hour long chat with me without it being a test at some level.

After answering a few of his questions he told me to talk to one of the only previous interns at the firm to learn from her experience. I told him I already spoke to her and mentioned the 3 other people I also spoke with at the firm.

This really surprised him, and my initiative seemed to have sold him. The next step was to put me through a formal interview process with the team.

Q: What was the interview process like? Where there technical finance questions?

I had a total of 7 interviews over 2 days. The first 4 were about my background, basic behavioral questions, my investment philosophy, how I would analyze a deal, etc. At this point I felt prepared with these questions.

The next 3 were deeper personality interviews and stress tests. They asked me a lot of very direct questions to see if I could handle the pressure. But I think it went ok.

Luckily, I didn’t get any technical finance questions. I think this happened because I was very clear from the beginning about who I was, why I was interested in the firm, and what my goals were. I didn’t pretend to be a master of finance, and everyone knew I had no finance training.

It also helped that the former intern came from a similar background as myself and she had a stellar reputation, so I tried to associate myself with her by telling my interviewers that I want to follow in her footsteps.

After my interviews, I reached out to two other senior people in my network whom I had a close working relationship with and who also happened to be connected with this PE executive. I explained my situation and that I had just interviewed for this firm and was waiting to hear back. They were nice enough to directly reach out to this PE executive and vouch for me.

Q: When did you hear back? What was that like?

A week after the interviews, the PE executive called me and said the team thinks that I have potential. He also mentioned that they were concerned with my complete lack of finance experience.

But nonetheless, he was satisfied enough to extend an offer to join the firm as an investment associate.

He then ended the call by asking if I knew what I was getting myself into. He said this is a professional firm, and there was no time for anybody to hold my hand. I had to figure everything out and be resourceful. I had to be excited about the fast-paced work and not crumble under pressure.

He even said I could instead turn this opportunity down and enjoy the next few months traveling the world before business school.

I told him this was the opportunity of a lifetime and I was 110% in.

Q: That’s an incredible story… what was the biggest thing you learned in this process?

By biggest realization is about the power of our networks, and especially the power of weak connections. This would not have happened without all the weak second degree connections I was able to get in touch with through my stronger first degree connections. I was also surprised to find how expansive my second degree network was -- I thought I didn’t really know that many people in finance.

My second realization was how important it is to be very clear with my ask. I was upfront about who I was, my experience level, why I was interested, my business school offer, and where I wanted to go with my career. This helped get people to believe in me and feel invested in my future, while setting reasonable expectations. That being said, I think I was able to be so upfront largely because I got warm introductions to these firms through people I already built a relationship with over the years.

Q: Do you have any parting words for 2 by 22 readers?  

Yeah! First, don’t sell yourself short. Don’t take any options off the table before they’re actually off the table. Just because you haven’t heard of anyone with your background doing something before, doesn’t mean it’s not possible. Chances are someone has done exactly what you’re trying to do, you just haven’t heard of them yet. And if you find those people, they will be able to help you so much.

Second, realize that your network can come from surprising places -- not just who you work or go to school with. It can be people you know from volunteering, sports, alumni, clubs, and of course, second degree connections.

Finally, if you feel stuck, not knowing what role you want to pursue, I would just start somewhere. Try to pick 1 job that you have even an inkling of interest in and double down on it. If you don’t like it there are ways to transition from that to a role you’re more interested in. For me, I didn’t even realize PE is such a hot space until I did more research. This all stemmed from my genuine interest to invest in my college friends’ startups without using my own money.

Rohan’s final thoughts

I find these stories incredibly inspiring and hope you do as well! A few final thoughts:

  1. Sergei clearly thinks about his career decisions as a variety of hypotheses that he’s testing. This frees him up to try things that are way out in left field, purely because he’s “interested in exploring them”. It’s refreshing to see him maintain this mindset even after already working for a handful of years post-graduation.
  2. Our networks are so, so, so important to unlocking future opportunities. The worst way to find/land a job is to cold apply on a job board or company website. By learning how to leverage your network, there is no limit on the types of careers you can pursue. I also love how Sergei was genuine with his first degree network (friends and colleagues) about his goals. This was entirely authentic.
  3. Lastly, building your network and doing great work in life will always open unexpected doors for you. I believe this applies to everyone. But opening a door is not the same as an opportunity falling in your lap. The door to this PE fund was cracked open after Sergei asked his network for help. Once he saw the crack, Sergei sprinted through it. He got in touch with 4 different people at the firm, did his interview prep, and simultaneously got senior professionals to vouch for him. I find that most people don’t sprint through doors like Sergei did. And that, is the difference between the ordinary and extraordinary.

Figure out how to crack the door open... then sprint.

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