Venture & Private Equity Backed Companies: How Do I Find a Job at One of These?

If you are willing to take on a little (or perhaps a lot) of risk, consider contacting private equity and venture capital firms about going to work for one of their portfolio companies.  These firms are frequently on the lookout for CEOs, and to a lesser degree for senior executives a step below the CEO, to run the portfolio companies that they own.

For a quick education: 

Private Equity Firms purchase established businesses and typically hold them for three to seven years before they flip (sell) the portfolio company.  The portfolio company could be sold to another private equity firm, to a competitor, or to a company in a similar line of business looking to make a strategic acquisition.  They could also launch an IPO for the portfolio company.  Most private equity (PE) firms aren't interested in companies with sales of less than $100 million; there are number of smaller firms that do buy companies smaller than that, even a few as small as $5- to $10-million, although private equity acquisitions of companies this small are rare.

Venture Capital Firms make investments in early-stage companies.  These investments often do not give them a controlling interest in the company, and they frequently make a series of investments in these companies as funding is needed and the company's products appear to be developing in a marketable direction. Unlike the private equity firms’ portfolio companies, the venture-funded companies are almost always small, often have no products that have been commercialized, and are inherently more risky.  The venture capital (VC) firm generally will exit after somewhere between three and seven years.

If you get into a private-equity- or venture-funded company at a senior level, you may not get quite the salary that you're expecting, but you should get a significant stock-option piece that could provide a huge pot-of-gold-at-the-end-of-the-rainbow when the company is sold.  The value of these stock options, of course, is dependent upon how much value you and the rest of the management team add to the company.  This can amount to millions of dollars, or nothing.  Or the business can collapse, resulting in early termination for you.  These kinds of deals are not for the faint of heart, but the reward for these risks can be enormous.

And what happens to you, after the sale?  That depends on who buys the company, your job responsibilities, and how much the new owner wants you.  If the company is being merged into a competitor, you might be given your $2.5-million in stock appreciation and be sent off happily.  In other situations, if the new owner wants you, they will do what they can to tie you up with some golden handcuffs before they buy the company.  In fact, many acquisitions will not go through unless the new owner is assured that certain key managers are going to remain on board.

You may be thinking that this we're still in the Great Recession, and that the private equity and venture capital bubble has burst. We're now well past the bust of 2008 and 2009, and  these firm owners have told me that companies they want to buy or invest are now overpriced - the market has changed.

However, the joy of private equity and venture capital firms is that regardless of the economic climate, they still own a portfolio of companies. If they're not buying companies, they are trying to figure out ways to make the ones that they own more profitable.  A weakened economy means some of those portfolio companies need people to help get them fixed.  So in a strong economy, these firms are buying companies, and frequently need CEOs and other top-level executives to run them.  And in a weak economy, these firms are managing their portfolio companies, which also means that they need CEOs and other top-level executives to run them.

But how do you reach these people? There are some direct mail lists available, although most are expensive. From these lists, you can do a mass mailing of your resume or even a mass emailing, as most contacts on the list have an email address provided. That will enable you to reach most of the firms in the industry coast-to-coast.  Their service is also searchable by portfolio company, so you can easily identify the firms that own medical device companies, for example,  if that is your field.  If you are going to concentrate on an industry sector, your  target list will probably be small enough that you can reach the firms by either networking or by direct mail, with telephone follow up.

Who to contact on these lists is a difficult question.  As a general rule, don't contact anyone whose title isn't either partner or managing director. Often it is the operating partners who concentrate on running the portfolio companies and who will be looking for people to shore up these companies.  If you have the time, look at the firm's website.  Nearly all of these have biographies of the partners, and these will tell which of their portfolio companies’ boards each partner sits on.  Unfortunately, each partner tends to concentrate on a small number of portfolio companies, and may be unaware of an opening in another of the firm’s portfolio companies.

I have recommended conducting this type of mass mailing or emailing to many executives; most who have tried this have received at least a few phone calls or interviews from doing so.

Dealmaker Portal has an online directory that will lead you to VC and PE websites across the country and around the world. Almost all of the web sites for firms in these two  industries have bios of their partners and managing directors on them, as well as lists of portfolio companies.

There are other, more personal ways to reach these people.  The Association for Corporate Growth (www.acg.org) has numerous breakfasts, dinners, conferences and other events where you can meet face-to-face with people in the private equity world.  They have a number of regional chapters, with Boston and New York being the largest chapters.  

Bear in mind, though, that these firms normally do not exclusively invest regionally.  A Boston firm specializing in biotech may have investments in one or two Boston-area biotech firms, and also have holdings in North Carolina, New Jersey, Frankfurt and California.  If you're trying to stick to your region, you may be better off determining which of these firms have portfolio companies in your region, regardless of where the investing firm’s headquarters is, and contact their partners, reminding them of your expertise in their portfolio company's industry, and that your home is within commuting range of it.

Jim Gilreath, a long-time friend and colleague of Job Magician, has made a career out of conducting retained searches for private equity firms.  He has written a book that describes in great detail how to reach out to these firms. His book, Skin In the Game, will also tell you how to prepare yourself so you will make the best impression when you do meet with a private equity firm. In addition, the book contains very good general job-hunting tips, and by following them, you'll be making excellent preparation if you're launching a job search in any industry. To order or learn more, click here: www.gilreathsearch.com.  If you're serious about reaching these firms, read his book.