Does Recruiting Private Equity Folks for VC Jobs Make Sense?

Absolutely.

Whether we’re recruiting people at the Analyst or Associate level at OpenView Venture Partners, the fundamental skills are there. However, it’s important to understand the key differences between venture capital and private equity. While both invest in companies and look to make money from them, here’s where they vary:

Venture Capital

• focuses on technology (includes biotechnology and clean-tech)
• takes on a minority share (less than 50%) and rarely invests more than $10 million per company
• uses cash to make their investments
• interested in early and expansion stage (growth) companies, which can be a little more on the “risky” end

Private Equity

• has no particular focus; they’re involved in all industries
• takes on a majority share and often buy the company out completely (and the investments are huge: $100 million to billions)
• because these investments are often leveraged buy-outs, both equity (cash) and debt are needed
• interested in well-established, mature (and often times public) companies

At the end of the day, whether your candidate comes from VC or PE, chances are he/she is a finance-driven former banker (profiles you can easily find on Doostang) if you’re looking to add headcount to your investment team. Understanding these basic differences should help you during your conversations and interviews with such candidates – good luck!