Thursday, December 12, 2013

How to break into venture capital and the like?

I don't know the first thing about management consulting or finance (private equity or venture capital), so I thought I would ask. (I should note that I do understand that all three areas are separate, distinct and necessarily related.)

I am sure there are Ph.D. chemists in the field -- one of my first fun posts was tracking down the factlet that 25% of Harvard's chemistry Ph.D. class between 2005 and 2008 ended up in business/finance of some sort.

So I have a few questions:
  • The big management consulting firms (the McKinseys of the world, etc) are still hiring, and still hiring new Ph.D. graduates, right? Probably from top-tier programs? 
  • I presume that breaking into venture capital requires some amount of technical education (i.e. a M.S. or Ph.D.), but also some job experience in the relevant field (biotech, pharma, whatever?)
  • What do you do all day if you're in venture capital? I assume that you're constantly sifting through proposals from various people, looking for organizations that have a good idea that might make money. 
  • What entry-level positions in private equity firms would be relevant for new Ph.D. grads? 
Readers, any thoughts? Much appreciated. 

12 comments:

  1. I can only comment on your first question as a postdoc at Harvard. The big consulting firms (Bain, BCG, McKinsey, etc.) all recruit here very aggressively. They post recruiters here for several weeks where they have seminars and then go through the stages of recruitment. I did not attend these sessions since I've been here less than a year, but I know people who did and they said the general attendance was mixed between postdocs, grad students, and undergrads.

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  2. I was thinking about going in this direction right after grad school. I met with a VC who told me that with an MBA, he could hire me right away in an analyst/advisory role. With "just" a Ph.D., I'd need several years of professional experience.

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  3. The first comment also raises the question: what do people do who are NOT at the schools these firms target for recruitment?

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    1. They teach high school or community college Chemistry.

      I would imagine that "name recognition" is everything to these organizations. Who is going who higher a consulting firm that has consultants with PhD's in Chemistry from Montana State University?

      Its getting to the point that unless your terminal academic" training" appointment was in a top 5 university, your 8-9 years of scientific training will be rendered completely worthless to get a decent job. What a waste of time.

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    2. You are correct. Dumb people everywhere even in these top 5 schools. I was teaching a graduate student from 1st tier school in one of the biophysics meetings. He had no idea what he was doing. I was from ~150th school.

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  4. I didnt even know the rank of my dept when I applied and got accepted (its about 25th or so). I just went there because it was local. If only I had known better, I would have applied to something better. Its blogs like these that are needed to get the word out.

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    1. I agree. But scientists don't like posting, tweeting, or don't have time to do that, at least from my personal experience.

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  5. " presume that breaking into venture capital requires some amount of technical education (i.e. a M.S. or Ph.D.), but also some job experience in the relevant field (biotech, pharma, whatever?)"

    Oddly, not always. Looking at the VC team at Orbimed (http://www.orbimed.com/en/our-team/private-equity) 11 of 19 have an advanced degree in science. Based on my experience, this seems pretty typical.

    To be fair, oftentimes PMs/analysts with no technical background can be quite knowledgable, but their understanding is typically a mile wide and an inch deep. They drive better cars, and have much much better watches, than the poor schmoes who actually do science.

    "What do you do all day if you're in venture capital? I assume that you're constantly sifting through proposals from various people, looking for organizations that have a good idea that might make money. "

    Pretty much read a bunch of presentations and meet management teams from companies with pie-in-the-sky ideas to treat diseases with vastly over stated relevance. Also some modeling, with 2 decimal place accuracy, of projections based on facts that are unknowable.

    Investor conferences are also a LOT swankier than science conferences: nice meals, free drinks, big name enetertainment.

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    1. Thanks, BT. Was hoping you'd comment.

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  6. It's not VC but a related career at the McKinseys out there--being a generalist consultant, which i recently saw at a alternative-careers-symposium at my school.

    Apparently these places will hire some people with advanced degrees to do consulting entirely outside their field, after a bit of training. Sounded interesting and the person who had done it was not from an Ivy, but an engineering department PhD.

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  7. I know a few people from my former Chem Department (top 10, only emphasizing that because it seems to be part of the discussion) that went to work at McKinsey after finishing their PhD. I applied after post-doc experience and didn't hear back. It sounded like at least one of them was working on problems entirely outside their field, although I suppose the other was as well given that their PhD work was hardcore synthetic chemistry. One of my current colleagues said a chemicals company he used to work at hired McKinsey. He said none of their ideas worked, but they were paid handsomely, and they were all recent graduates.

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