Weekly Reader Q&A: VC Internships, Private Equity In China And Visits To Firms
Reader Q&A is back with a vengeance this week. With many Mergers & Inquisitions readers having just started their summer internships or preparing to start soon, everyone is focused on getting the most out of their experiences and getting ready for full-time recruiting in the fall (I wish I was half this prepared when I went through recruiting…).
Venture Capital Internships
“I’ve been looking for investment banking summer internships this year but missed the recruiting season and was not able to find anything at boutiques or small firms around here.
I may get an offer to intern at a venture capital firm focused on renewable energy, via a family connection. Given that this is outside New York, how would a summer at a VC look compared to the typical i-banking internship?”
Inquisitor:
This is a great question and brings up a point that I have not addressed on the site (until now, that is).
A lot of undergraduates are interested in pursuing venture capital after (or before) investment banking. In theory, it sounds like a dream job - flying around in jets, meeting entrepreneurs and seeking out the next YouTube and then making hundreds of millions of dollars when Google swoops in and acquires your company for $1.6 billion.
The problem: that is not what working at a VC firm as a junior person is like. Instead, you’ll often be somewhere between an assistant and an investment banking analyst: you will support the Partners and handle administrative tasks. Sure, the hours and lifestyle will be much better, but you might end up doing even less meaningful work.
Case in point: I knew a girl who interned at one of the top VC firms a few years ago and spent most of her summer managing the Partner’s calendar, taking care of errands and traveling throughout the country. While the travel part may sound appealing, you don’t develop skills like financial modeling, sales, or even valuable relationships by being someone’s assistant.
As Guy Kawasaki pointed out on his blog, you want venture capital to be your last job - not your first (or second).
One exception: if you go to a later-stage VC or growth equity firm, those are closer to banking and private equity and will be looked upon more favorably/give you more options.
If this is your only option for the summer, sure, go ahead and do it - just don’t expect recruiters to treat a VC internship as “on par” with a banking one, because it is usually not even close.
On the New York issue, it doesn’t matter much for an internship - location is more relevant for the purposes of networking and deciding where you go next.
Private Equity In China
“I’ve been offered an internship at a small private equity firm in China. The team is very small (only 5 including me) and they focus on small and mid-sized businesses.
They said responsibilities will be similar to PE internships in the US - site visits, due diligence, financial modeling, meeting with owners, etc.
I have no previous finance experience, and would likely be looking for a job in the US once this internship is complete. Will this help me in terms of transitioning to a larger firm in the US?”
Inquisitor:
Internships abroad tend to be more “random” than ones in the US. I know because I interned abroad before and many friends have done the same.
So you usually don’t know exactly what you’ll be doing or learning until you’re already midway through the internship. It’s definitely more of a gamble than staying domestic and working at an established firm.
That said, I would recommend you go through with it and accept the internship anyway:
- You have no finance experience, so it will be quite difficult to break in unless you go this route.
- It’s just an internship and it can be spun any way you want during recruiting - expectations tend to be lower when describing internships vs. full-time jobs.
- There is the whole “China angle” aspect these days, which US firms will like.
Merely having the name “private equity” on your resume makes a huge difference and will get you access to recruiters and larger private equity firms, regardless of how much you actually learned.
Setting Up Firm Visits And Informational Interviews
“Could you explain the process of setting up a company/firm visit, and what I should expect? I’m living and interning abroad this summer and want to take advantage of the opportunity to meet with local firms here. I also wouldn’t mind working abroad in general.”
Inquisitor:
Expectations are not set too high when visiting firms, especially when you’re outside the US. It’s mostly about asking intelligent questions, doing some research beforehand and showing interest in what they do.
It’s about not screwing up more than doing anything perfectly (see: summer internships and proving yourself when you first start).
In terms of setting up a firm visit, I would just ask for it directly - “I’m very interested in learning more about your firm and will be in XX area on XX/XX - XX/XX - I wanted to see how we might set up an in-person informational meeting so that I could learn more.”
I definitely think it helps with recruiting, and more so at smaller companies than larger ones - very few people take the initiative to do this, so you can stand out with something relatively simple.
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Tags: China internships, informational interviews, investment banking, Private Equity, private equity jobs, understanding investment banking, Venture Capital
Coming Soon: Breaking Into Wall StreetRelated Articles:
- Weekly Reader Q&A: Summer Internships vs. Study Abroad, Low GPAs, Going International AND Local
- Weekly Reader Q&A: Law School Student To Finance, How Summer Analysts Are Judged And Turning Down Summer Offers
- Weekly Reader Q&A: The Age Factor, Finance Internships Abroad, And Fall Analyst Recruiting (And More Summer Internship Tips)
- Weekly Reader Q&A: Early Interviews From Summer Offer, Analyst Recruiting Post-College, And Was It All Worth It?
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