Where Do You Sit In The Private Equity Waterfall?
When you feel you've mastered a skillset, it's time to learn something new — and let the old go — you mastered it; time for the next generation to assume the role.
A successful private investing career requires you to consistently evolve your skillset.
For those who make it to the principal/partner level and are expected to source deals, it can feel so daunting to make the Great Pivot from perfectionist doer to entrepreneurial dealmaker.
They are completely different skillsets, and require a 180 shift in psychology.
LEVELS 1 & 2
The decade of analyst -> associate ->VP tasks is heaven for controlling personalities who feel great when they deliver perfection. The fragile ego is coddled by the affirmation from senior colleagues and keeps many trapped in this hamster wheel.
MASTERING LEVEL 3
However, in order to source effectively, one must learn to put the insecure needs of the ego aside, and learn to be truly of service to your clients: target management teams, sellers and your investment committee / LPs.
All of a sudden, you go from delivering excellence as instructed / following a learned process, to never knowing what's coming next?
It's nerve wracking to be one of 20+ bids in a process, and get told "no" over and over.
This uncontrollable dynamic is fairly unsettling for the average professional.
Learning to "be of service" to target management teams, communicating their needs to your IC, and finding a market clearing price with the sellers is an art.
Models don't really matter anymore. The decks are confirmatory documentation.
It becomes a velocity of reps * deal instinct game. It also requires you to be vulnerable with your Partner group: to present a reasonable idea, and build consensus with the group as the process evolves.
Where do you sit in the private equity waterfall?
Are you gravitating to the lower value-added activities because they feel familiar and safe?
Does sourcing or fundraising feel daunting or hopeless?
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