No matter where you are in the private equity world – just starting out, mid-level or in a senior position – networking is critical to your success. So much of the work is highly personal; it’s who you know that counts, whether it’s finding potential investors or uncovering the next investment opportunity. So it should come as no surprise that landing a job in private equity often comes down to networking.
Hopefully you started building your personal network while still in business school, one of the most fertile grounds for a lifetime of business contacts. Your classmates, and who they know in the industry, are your first source of leads even if some of them are competing to get into the same industry. If you share a source or referral with them that may not be a perfect match for you, they will remember the gesture and hopefully reciprocate in the future.
You need to begin a process of “informational interviews” with whomever you can meet in private equity to gradually expand your network and uncover private equity job opportunities.
By this point, you will have crafted an airtight resume that highlights your deal experience, unique abilities, education and other accomplishments. You may or may not present it at these information interviews, but you’ll keep it handy just in case.
Prepare and practice introducing yourself, your “elevator pitch” so to speak. Who you are, what you’re looking for, and whether or not you can speak with them for a few minutes to get their advice on the industry and their particular firm. Even busy professionals are often willing to give advice, especially since someone probably took the time to help them when they were job hunting.
First impression count. Speak confidently and clearly; offer a firm handshake. Be sure to have business cards with you at all times. Get used to striking up conversations with strangers. You may stumble upon an outstanding contact at the most unlikely places, perhaps at on an airplane or at a sports club.
The next step is to take advantage of your alumni networks, both from business school and undergraduate. It’s likely that they have alumni in private equity, and this common bond can potentially open doors for you. Many top business schools put on networking events during the year and invite well-known members of the private equity industry to speak at them as well.
Join online networking sites such as LinkedIn, Classmates.com and Facebook and see if you can find classmates in the industry and discussion groups of PE professionals. Join the groups, monitor and contribute to the online discussions.
Do a thorough online search for private equity events and seminars in your area and try to attend some. Or, you might enroll in private equity training or coaching classes. The teachers and your classmates at these events are also fertile ground for expanding your network.
You may want to identify a few recruiters who specialize in the private equity industry. While they may be more interested in placing more senior people, they may still offer you a few minutes of their time and advice. Keeping in touch with them and building a long-term relationship will pay off as your career unfolds. Recruiters often have access to private equity jobs that no one else knows about.
Next time, we’ll look at networking for venture capital jobs.
If you are fortunate enough to receive an offer for a private equity or venture capital job, never accept it on the spot. Instead, politely thank them for the offer, express your enthusiasm for the job and their firm, and ask to think it over for a few days. Try to buy at least a week to evaluate the offer and build your case for more.
This gives you time to build a case for your compensation package. You might mention specific skills that you’ve acquired, high profile or unusual deals you’ve worked on (M&A, IPOs, Convertibles, etc.), and the key skills you gained working on these deals (such as modeling, valuation, and others). In the case of a venture capital job, you need to demonstrate your ability to contribute to the firm, your passion for a particular industry, or the entrepreneurial culture overall. If you’ve started a business, worked on any deals, even part-time, or done any research for a local start-up or angel investor, you can build a strong case for a higher salary range.
Remember, a good firm is seeking high quality professionals who are able to deliver value. Never be afraid to ask for something. Employers are prepared to negotiate, and often feel more comfortable hiring someone who knows his or her professional worth. If you are as good as you say, they expect you to negotiate and are waiting for your counteroffers.
It also helps to negotiate from a position of strength. Knowledge about the market and compensation for similar jobs is one way. If you have more than one offer at the same time this obviously gives you a better bargaining position. You are able to mention that you are comparing compensation plans from both. Of course, this must be done diplomatically. You may want to indicate that you would prefer to work for their firm if they could match the compensation offer provided by another.
Finally, get the final arrangement in writing. Follow up your meeting with a letter thanking them again for the offer, mention when you’ll be starting, and outline both the salary and other compensation details that you have ironed out verbally.
Negotiating your complete compensation package sets the tone for your relationship with the company for years to come. How you handle this delicate task establishes how much respect they have for your abilities now, and the next time a compensation discussion comes up in the not-too-distant future.
References:
www.computerworld.com
www.bankrate.com
Even professionals who are used to negotiating multi-million dollar deals for private companies or start-up funding for new ventures find it stressful when it comes to putting a value on their own skills and experience, and negotiating for more.
Nevertheless, there are certain principles that industry experts and recruiters agree on, when it comes to negotiating compensation at a new firm. The first is that any mention of compensation should be pushed to the very end of the discussion, and only after a firm job offer is made.
You should politely and firmly deflect any questions about what sort of compensation you’re looking for until it is clear your skills match what the firm is looking for. If either side mentions a specific figure or range, it automatically creates a marker that is difficult to move away from. For instance, if you mention too high a range, it could end the discussions before you’ve even had a chance to demonstrate the full value of your skills and experience. If you mention a figure that’s too low, it opens the door for a low-ball offer or creates the impression that you do not value your skills highly enough.
Before the process even begins, you need to thoroughly research compensation ranges for similar positions. Use online sources such as Job Search Digest’s annual Private Equity Jobs Compensation Report. Or scan the hundreds of jobs listed at Job Search Digest for similar positions. Later on, you will need to link this information with your unique skills and abilities in order to justify asking for more.
Think beyond dollars and build your total compensation package. Put together a list of the perks and bonuses you might want to include, such as signing bonus, health and dental insurance, paid vacations, paid sick leave, retirement or 401k plans, tuition reimbursement, even things like flextime or remote work options. Entry-level positions at private equity or venture capital firms may be more limited in the salary ranges they offer, but may be able to offer a fair amount of flexibility in terms of other forms of compensation.
Next time we’ll talk about what to do if you receive a firm offer with the salary and compensation spelled out.
