5 Things You Must Know Before Getting Into Private Equity

Alright, let's do this video man. 50, 35 hours a week. I'm super old school here with my printed notes. People are asleep. What are we talking about today man? Excuse me. What do people need? Five things to know before working in private equity or venture capital. Nice topic. What's your name? Just a software update.

好的，来录这个视频吧。每周工作50到35个小时。我这里很老派，用的是打印的笔记。大家都在打瞌睡。今天我们聊些什么呢？不好意思。人们需要知道什么？在进入私募股权或风险投资之前需要了解的五件事。不错的话题。你叫什么名字？只是一个软件更新。

Alright, so this video can save you literally years of career mistakes. Alright, it's very important to know what you're getting yourself into. And this video is not only relevant for people who say I definitely want to go into private equity or I want to go into venture capital. It's basically relevant for anyone who wants to make big bucks in the future. Because sooner or later what you're going to become is you're going to become an investor.

好的，这个视频可以帮你避免多年职业错误。这非常重要，因为你需要了解你正在进入什么领域。不管你是不是确定要进入私人股本或风险投资，这个视频对想在未来赚大钱的任何人都适用。因为迟早，你都会成为一名投资者。

At some point you're going to stop offering services. You're going to start playing with capital. Allocating capital. Making money work for you. That's what you're going to do in the future if you're ambitious enough. So this video is very much relevant for all the ambitious people out there. It works. And I'm very happy to have you on my channel. So let's get right into it.

总有一天，你会停止提供服务，转而开始运作资金，分配资本，让钱为你工作。如果你足够有野心，这就是你未来要做的事情。所以，这段视频对于所有有野心的人来说，非常有意义。它确实有效。很高兴你能来到我的频道。那么让我们直接进入正题吧。

Five things I wish I knew before going into private equity venture capital. For the disclaimer I haven't worked in private equity ever in my whole life. Unless you classify the VC and the venture building game which is something I do. And venture building is like a small subset of what you can do in the VC space as the subset of private equity. Which it is technically.

在进入私募股权和风险投资行业之前，我希望知道的五件事。声明一下，我一生中从未在私募股权领域工作过。除非你把风险投资和创业孵化归类为私募股权的一部分，而这正是我正在做的事情。创业孵化实际上是风险投资领域中的一个小分支，而风险投资又算作私募股权的一个分支。

So I have the right to sit here and talk about it. Okay. So five things I would have liked to know. And plus you know of course I have a multitude of people that I coached in the past that I'm good friends. And et cetera that are working at top funds like Blackstone, KKR, whatever. Also on the other side of the aisle I have so many people from venture capital that I'm interacting with on a daily basis and part of my job. Or even have to help them get their jobs.

所以我有权利坐在这里谈论这个话题。好的。我想谈五件我希望自己早些知道的事情。此外，我曾经指导过很多人，我们关系不错，很多人现在在像黑石、KKR这样的顶级基金工作。同时，在另外一边，我每天还与很多风险投资领域的人打交道，这也是我的工作的一部分，甚至得帮助他们找到工作。

So here are my two cents. First of all the selection of the fund makes a big difference. Much more than choosing the firm in management consulting or choosing the bank in investment banking. Okay. If you are starting out your fresh graduate you have the dream of going into consulting or banking. Then it's like yeah.

以下是我的一点建议。首先，选择基金会产生很大的影响，这比在管理咨询中选择公司或在投资银行中选择银行的重要性要大得多。如果你刚刚毕业，心怀进入咨询行业或银行业的梦想，那么情况就类似。

I mean it kind of makes a little difference here and there culture wise focus wise which consulting firm for example you pick or which investment banking pick but then again. Not that much. But I mean if you are in BCG or if you're working in McKinsey it's basically different people. That's it. I mean there's only so much of a difference whereas in private equity car.

在某种程度上，从文化和关注点来说，选择哪家咨询公司或投资银行可能会有些细微的差别，比如选择BCG（波士顿咨询公司）或麦肯锡实际上就是面对不同的人，仅此而已。因此，这两者之间的区别并不大。而在私募股权领域，情况就不同了。

It makes a huge difference. You have mega funds you have mid market. You have funds that are mainly focusing on this trust game. They are focusing on restructuring turnaround investing. You have funds that are mainly focused on growth focused on LBOs. There is a huge universe of things.

这有很大的区别。你有巨型资金，也有中型市场的资金。有些基金主要专注于信任游戏，关注重组和周转投资。有些基金主要专注于成长，专注于杠杆收购（LBOs）。这个领域有很多种类。

Firstly that a fund can be focused on terms of what private equity games is he playing. What kind of investing. And then also in terms of the fund size that makes again a very big big difference especially in terms of the work load because if you are at one of these mega funds. The competition gets super high and basically the whole team is working all around the clock to find ways to justify certain deals or to extract value from certain deals that are on the table.

首先，一个基金可以专注于他所涉足的私募股权领域，即他在进行什么类型的投资。同时，基金的规模也会造成很大的差异，尤其影响工作负担。如果你在一个巨型基金工作，竞争会非常激烈，整个团队基本上会全天候工作，不断寻找理由来证明某些交易的合理性，或者从正在谈判中的交易中提取价值。

There is only so much potential for carry. So everybody is trying to maximize their carry. Everybody is working hard. 80 to 100 hours and it's grind. Whereas in mid market funds there is less competition. There is stronger networks. I mean if you are at one of these funds in Germany for example you have your set of potential customers.

每个人都在尽力最大化他们的收益潜力，而这种潜力是有限的。所以大家都在努力工作，工作时间可能长达80到100小时，非常辛苦。而在中型市场基金中，竞争相对较小，人际网络更强。举个例子，如果你在德国的某个基金工作，你会有一批潜在客户。

People that you are talking to on a daily basis. Some chief executive officers from SMEs for example. So that makes things a little bit easier. Work life balance is better. So long story short it makes a big difference on what fund you are going to work with. What company you are going to work with both in private equity as well as in venture capital. So do your research and look at forums like Wolf Cheetoases where there are so many discussions around.

你每天交流的人。例如，一些中小企业的首席执行官。因此，这让事情变得稍微简单一些。工作与生活的平衡会更好。简而言之，这在很大程度上影响着你将与哪个基金合作，以及你将与哪家公司合作，不论是在私人股本还是在风险投资领域。因此，你要做好研究，可以去像Wolf Cheetoases这样的论坛看看，那里有很多相关的讨论。

How is the work culture at this fund? What is the work life balance like? What kind of deals do they do and so on. That's very important.

这家基金的工作文化如何？工作与生活的平衡怎么样？他们主要做什么类型的交易，等等。这些都非常重要。

Second point. It is extremely challenging to get into private equity and venture capital without prior experience in either investment banking management consulting or nice startup credentials. Now. And then elsewhere in the world. For private equity. It's very obvious. These people want associates. Want people who are able to trust numbers. They are able to take a look at deals, model them, find out whether there is possibility to extract value out of these deals.

第二点。如果没有投资银行、管理咨询的经验或不错的初创公司背景，要进入私募股权和风险投资领域是非常困难的。无论在现在还是世界其他地方，都是如此。对于私募股权行业，这一点显而易见。他们希望招聘的副手是那些能够信任数据的人，能够分析交易、进行建模，以及判断交易中是否有可能获得价值的人。

So they need people who are able to deal with numbers in a very relaxed way. In a very comfortable way. So what they will go for most of the times is investment bankers, former investment bankers, investment banking analysts. Could also be management consultants. But what I observe is private equity funds will tend to go for investment bankers. Now if it is a private equity fund that is heavily focused on adding value. So helping the management team for example, design a new growth strategy. Then they will go for management consultants because that's what management consultants do. They advise management of big companies. Five, six, one, five, one, five, one, five. Four venture capital on the other hand. Management consulting is not that relevant because it's not really what you're doing with the startup. You don't have the modeling experience that an investment banker will have. And you also don't, you can't argue with your I give advice to corporates angle because you don't give advice to corporates. A startup is a totally different thing from a big multinational company. So your consulting edge doesn't really apply here. Now is it impossible to get into this game being a strategy consultant? No, of course not. It's all about how you position yourself properly. But just giving this out there for venture capital funds. It's either or preferably investment bankers. Mostly for funds that are heavily quantitatively driven.

因此，他们需要能够轻松处理数字的人。这通常意味着，他们会寻找投资银行家，前投资银行家，或者投资银行分析师。有时候，他们也会选择管理顾问。但我观察到，私募股权基金大多数时候倾向于选择投资银行家。如果一家私募股权基金非常注重增加价值，比如帮助管理团队设计新的增长战略，他们会选择管理顾问，因为管理顾问就是给大公司的管理层提供建议的。 另一方面，对于风险投资来说，管理咨询并不是那么重要，因为他们并不需要在创业公司中做这样的事情。管理咨询者没有投资银行家拥有的建模经验，并且他们也不能以“我们给大公司提供建议”的角度去辩解，因为创业公司与大型跨国公司完全不同，所以在这里，咨询的优势并不适用。 那么，作为一名战略顾问，进入这个领域是否不可能呢？当然不是。这完全取决于你如何正确地定位自己。不过对于风险投资基金来说，一般更倾向于选择投资银行家，尤其是那些非常依赖数量分析的基金。

So a little bit later stage funds. And on the other hand, ex-founders because what's better than having someone who's your customer in a sense. Having him work for you. So now you're switching sides. You're not in your prior startup. You got funding, you received funding. Now you're switching sides. You're the one giving funding and you know exactly what the guy or the girl on the other table wants. So that's great. So that's point number two.

所以，我们来谈谈稍晚阶段的基金。另一方面，有前创始人加入，因为有什么比让你的某种意义上的客户为你工作更好的呢？现在你在换个角色，你不再是之前创业公司的那个人。你现在获得了资金支持，也提供资金支持。你很清楚对面那位男士或女士需要什么，这很棒。这就是第二点。

Number three. You are unfortunately not going to be the one making the decisions. At least at the beginning. So some people have the impression or have the dream that they are going to join one of these funds. And they are the one driving the deals and actually then in the end being the one saying, Okay, let's do it guys. This is a great deal. We're going to make millions and we're going to sit on the odds drink champagne and have inspirational conversations. That's not how it goes. At the beginning you are just a small tiny piece in a big machine. You are doing your analysis baby please but you're not really the one making the call in the end. That is still going to be the partners and sometimes even within the partner structure you have very senior partners who just by saying one word can basically dismantle all the other partners opinions. And everyone's for the deal but this one guy says no and then everybody's like, Okay boss. So that's unfortunately how it is. Add some firms. So don't be fooled. You're not the one making the decisions. You can be the one making the decisions at some point.

第三点。遗憾的是，刚开始你并不是那个做决定的人。至少在初期是这样的。有些人可能会有这样的印象或梦想，认为他们加入某个基金后，就能主导交易，最终成为那个说“好吧，伙计们，这是个好交易，我们会赚大钱，然后坐享其成，喝香槟、进行激励对话”的人。然而，事情并不是这样的。刚开始的时候，你只是个大机器中的一个小齿轮。你可以尽情做分析，但最终拍板的并不是你。做决定的依然是合伙人，有时候甚至在合伙人的架构中，也会有一些资深合伙人，只需一句话就可以推翻其他合伙人的意见。即使所有人都支持这个交易，但如果那个人说不，其他人也只能说“好的，老板”。所以，有些公司就是这样，不要被误导，以为自己能做决定。在某个时刻，你可能会成为那个做决定的人。

And if you are working at a smaller firm, smaller private equity fund, smaller VC fund, of course the chances of you being the one making the calls is exponentially higher. Now having said that we're talking a lot about PE and VC all the time, check out my video Private Equity versus Venture Capital. I think it's called on this same channel. It's a very good one for you to get a good overview of what are the main differences. I can do another video in the future that is even more detailed but this one is a good primer. So check it out. Private Equity versus Venture Capital.

如果你在小型公司、小型私募股权基金或小型风险投资基金工作，那么你做决策的机会会大大增加。我们经常讨论私募股权（PE）和风险投资（VC），可以看看我在这个频道上的一个视频，叫“私募股权与风险投资”。这个视频很不错，可以帮助你了解两者的主要区别。以后我可能会做一个更详细的视频，但这个是入门的好选择。所以，去看看吧，“私募股权与风险投资”。

Now point number four, it can be difficult and this is particularly for Venture Capital. It can be difficult to make the jump from senior associate or investment manager to principal, most of the time it's called principal. So someone who is at the someone like a junior partner you could say, making this jump is extremely difficult. Some people think, okay, I'm just going to start as an analyst at this VC fund and I'm going to work my way up until I'm partner. It's not always as easy like that because what most people lack is deep industry experience. Even if you are an analyst or an associate working at a certain topic, focusing on a certain industry, sometimes it's difficult to build that super deep industry knowledge. And that's what prevents you from going to the next step to actually being someone who's a junior partner or who's a partner at the firm. So I have friends who worked at VC funds. They came pretty far. They have been investment managers, people who have been allocating capital to different startups but they were not able to make this next step to become a partner or become as a junior partner, a principal of the firm. And what they did most of the time is they joined the industry. So they went into either startups, more mature startups most of the time or strategic roles at big industry players for a couple of years to build that deep industry expertise. And then as the next step they come back to the fund. So that's something to be aware of.

第四点，这对于风险投资来说尤其困难。从高级助理或投资经理升职为主管通常是很困难的，主管可以说是类似于初级合伙人的角色。很多人觉得自己可以从分析师开始，在风投公司一步步升到合伙人。但这并不总是那么简单，因为大多数人缺乏的是深厚的行业经验。即使你是一位专注于某个领域的分析师或助理，有时也很难建立起非常深入的行业知识。这也正是阻碍你晋升为初级合伙人或合伙人的原因之一。 我有一些朋友曾在风险投资基金工作，他们走得很远，成为了负责为不同初创公司分配资金的投资经理，但未能成功晋升为合伙人或公司的初级合伙人，主管。大多数情况下，他们会加入行业中，更成熟的初创公司或者大公司的战略角色中工作几年，以积累深入的行业专业知识，然后再回到基金公司工作。这是需要注意的一点。

And the last point is kind of like a double point. First of all, you're not completely independent and secondly you're not going to become a billionaire. So what do I mean by that? First of all, some people get into the game and they think it's now they're at the pinnacle of mankind. So you are the one making the decisions. You give money to the people who you want to give money to. And that's it. You're the king. You're not like a scrappy service provider like those investment banks or management consultancies but you're the one. It's not as easy like that because unfortunately the money that you're giving to other people is not your money. It's the LPs money. So you have the big guys at your back and the other ones giving you the money in the first place. So imagine if this money is not well invested. You have a problem. You have these guys probably will not be happy with it. So just remember that. If you are in this investing game most of the times it's other people's money. And yeah sure you make decent money with it. I mean you have your management fee, you have your carry, you make money from exits in BC. Great money. But you know you're not the king of the game. There's other people who are able to exert pressure during important. Commities during important meetings. And that's something to keep in mind. Now on the other side the second thing I said you're not going to become a billionaire.

最后一点可以说是双重含义。首先，你并不完全独立；其次，你也不会成为亿万富翁。那么我具体是什么意思呢？首先，有些人进入这个行业，以为自己达到了人生巅峰。他们觉得自己可以做出所有决定，把钱给想给的人，就像是国王一样，不像那些投资银行或管理咨询公司那样只是提供服务的小角色。但事情没那么简单，因为你给别人投资的钱实际上不是你的钱，而是LP（有限合伙人）们的钱。所以你背后有大人物，他们是给你资金的源头。想象一下，如果这些钱没有被很好地投资，那就会出现问题，这些大人物可能会不高兴。所以要记住，如果你从事的是这个投资游戏，大部分时候你用的是别人的钱。当然，你能从中赚到不错的收入，比如管理费、分成、以及通过成功退出获得的收益。这些都能带来丰厚的回报。但你并不是游戏的主宰。在重要的委员会和会议期间，还有其他人能够施加影响力，这一点要牢记。另一方面，我还提到，你不会成为亿万富翁。

That's a little bit oversimplified. But what I want to say is in this VC and PE game as part of the fund you can make great money. I mean you can make millions and millions and millions. But if you have the dream to make billions and billions and billions you will need to become a founder. Now founder in the broadest sense can be a high tech startup. Can also be your own fund. Right? And you recruit more and more partners in the fund and it grows and becomes a huge thing. And it's the next black stone whatever. But as part of this fund structure you will earn very good money but you will not strike it super big. You know just because your ownership of this thing that you're investing in is super small. So if you look at it's funny to look at for example Facebook the way you know it progressed through the different funding stages. And in the end you know Mark Zuckerberg earned X percent of Facebook and then you have the early investors how much percent they earned. And that's a tiny share already and now you need to remember that for this tiny share that you own not it's not like everything is yours right? This money gets distributed to the different limited partners. So those are the first people who have the right to cash out because you're investing their money in the first place. Now what's remaining from that is distributed within the VC fund to the different partners. And you can imagine you know like you still earn millions but it's not like you know you're the next billionaire. So that's something to keep in mind. And if you're if you got interested in both private equity venture capital you want to know more about both games how they differ and what's the right thing for you. Then check out my video private equity versus venture capital linked here and I'll see you in the next video man bye bye.

这有点过于简化了。但我想说的是，在这场风险投资（VC）和私募股权（PE）的游戏中，作为基金的一部分，你可以赚很多钱。我是说，你可以赚到数百万。但是如果你的梦想是赚到数十亿，你需要成为一个创始人。从广义上讲，创始人可以是高科技初创公司，也可以是你自己的基金，对吧？你可以在基金中招募越来越多的合伙人，让它成长为一个庞大的机构，也许是下一个黑石集团之类的。但在这种基金结构中，你的收入会非常可观，但不会赚得特别多。因为你在所投资项目中的持股比例非常小。 比如看一下Facebook的发展历程，看看它如何通过不同轮次的融资达到今天的地步。最后，马克·扎克伯格持有Facebook的一部分股份，而早期投资者则持有多少股份。这已经是非常小的一部分了，而且你得记住，对于你持有的这小部分股份来说，并不是所有的收益都属于你的。这笔钱会先分配给不同的有限合伙人，因为你最初投资的是他们的钱。剩下的部分会在VC基金内部分享给不同的合伙人。你可以想象，尽管你仍能赚到数百万，但还达不到亿万富翁的水平。这是需要记住的一点。 如果你对私募股权和风险投资都感兴趣，想了解它们的不同之处，以及哪个更适合你，那么可以查看我链接中的视频《私募股权与风险投资的比较》，下次视频再见，拜拜。