Win Consulting, Board & Deal Roles with PE & VC Funds

Exploring Opportunities with Private Equity and Venture Capital

Are you interested in collaborating with private equity and venture capital funds? While direct employment within these funds is limited and highly sought after, numerous alternative avenues exist for engagement and income generation.

These include roles as a consultant, an interim executive, a board member, a deal executive involved in company acquisitions, or even as an entrepreneur or executive in residence.

The Evolving Skillset in Private Equity

Traditionally, venture capitalists often possessed backgrounds in operations. Conversely, private equity professionals were predominantly former investment bankers and finance specialists.

However, a shift occurred as firms recognized that financial maneuvering alone is insufficient for creating substantial value. A study by Boston Consulting Group, analyzing 121 investments, revealed that operational improvements contribute to 48% of value creation within PE-backed companies.

Consequently, PE funds now routinely prioritize management upgrades and, when necessary, the implementation of effective change management teams.

Generally, a closer working relationship with a firm correlates directly with increased earning potential.

At Versatile VC, we have experience with all of these engagement models. We are preparing to launch Founders’ Next Move, a curated, complimentary community designed to assist founders in evaluating their subsequent career steps, which will serve as a valuable resource for connecting with external talent.

Identifying Potential Collaborations

The most straightforward approach involves identifying funds that specialize in your area of expertise and initiating contact. You can then explore the various models outlined below with them.

Begin by pinpointing firms that have invested in companies you’ve previously worked with. Broaden your search to include investors active in the industries where you possess specialized knowledge.

Several online databases can aid in identifying institutional investors:

All investors	Private equity	Venture capital
Preqin (free demo) Grey House (free demo) S&P Global Market Intelligence Pratt’s Guide Thomson One	PitchBook (free trial) PrivateEquityFirms.com (free trial) Eurekahedge	AngelList (free) CrunchBase (free) PWC MoneyTree (free) VentureDeal (free trial) Asian Venture Capital Journal (free trial)

Let's examine the diverse ways you can engage with the investment community.

Expert Networks: A Comprehensive Overview

Expert network firms connect clients with subject matter experts across diverse fields, providing valuable insights. These firms generally bill clients between $800 and $1,200 per hour, while compensating experts with fees ranging from $100 to $500 hourly. Circle of Experts, an expert network I established, was later acquired by Evalueserve.

Industry Growth and Client Base

The expert network sector experienced an average annual growth rate of 4.5% from 2015 to 2020. By 2020, the total market value exceeded $1.3 billion. Initially, hedge funds and private equity firms were the primary users of these services. However, consulting firms currently account for 32% of the overall demand for expert network assistance.

Inex One, a marketplace for expert networks, has compiled a list of 80 firms, visually represented in the following graphic:

Leading Expert Networks

The largest players in the industry include GLG, commanding approximately 50% of the market revenue. AlphaSights represents the second-largest generalist expert network. Guidepoint provides services to six key client categories globally, spanning numerous industries. Third Bridge focuses on recruiting and retaining talent to revolutionize traditional research methodologies and broaden access to expertise.

Additional prominent expert networks are Atheneum Partners, Coleman Research Group, Dialectica, ENG, Lynk Global, Mosaic, PreScouter, ProSapient, and Tegus. Furthermore, specialized networks cater to specific sectors or geographic regions.

Niche Expert Networks

SERMO, for instance, is a global social network for physicians, facilitating knowledge exchange and discussion of complex patient cases. Clarity.fm connects startups with experts specializing in new business development.

The Expert Institute assists legal professionals in locating expert witnesses for legal proceedings. Kingfish Group concentrates on serving the private equity sector, and CAPVision is a research firm with a strong emphasis on the Asian market.

Benefits for Independent Consultants

Engaging with expert networks offers independent consultants opportunities to collaborate with and learn from professional investors, industry consultants, and corporations. It also provides a pathway to competitive earnings and potential referral bonuses for recommending colleagues.

Experts typically contribute their knowledge through various methods, including phone consultations, presentations, in-person meetings, surveys, white paper creation, and comprehensive consulting projects.

Cost and Time Savings

Joining an expert network minimizes both time and financial investment. There are no membership fees to access potential projects offered by the network’s clients. Marketing expenses are also significantly reduced. While proactive self-promotion is encouraged, the network actively matches experts with suitable client needs.

Furthermore, the network handles negotiation and payment processing, ensuring prompt and reliable compensation. Clients remit payment upfront, simplifying the financial aspects for the expert.

Flexibility and Confidentiality

These engagements offer considerable flexibility. Expert networks typically require minimal commitment. Upon receiving a project request that aligns with your expertise, you generally have 48 hours to accept or decline. Consultations are conducted with strict confidentiality between the client and the subject matter expert.

Compensation is based on an hourly or per-project rate, eliminating fixed time obligations.

Criteria for Participation

Specific criteria govern the selection of consultants for expert networks, as detailed below:

Attributes sought	How the network assesses you
Relevant experience	Industry recognition: Publications, awards, academic credentials, published research
Access to unique knowledge	Affiliations: Connections to specific companies of interest
Communication skills	Consulting experience, public speaking engagements

Notably, expert networks generally prioritize knowledge over social or managerial skills, which may be advantageous for some individuals.

Maximizing Success

To maximize your success, maintaining a detailed and current profile is crucial. Ensure your LinkedIn profile and personal website are up-to-date, highlighting your availability and professional background. Quantify your accomplishments using a format like: “Achieved X by doing Y, resulting in Z (a quantifiable result).”

Clearly articulate how you developed your expertise to enhance your credibility. Incorporate relevant keywords, including past employers, clients, and industry-specific terminology.

Proactive Engagement

Actively apply for open projects listed on the network’s platform and communicated via email. Inform your liaison about emerging trends or recent conference attendance. Indicate your availability for immediate client needs.

Setting Your Rate

Networks often suggest an initial rate, typically around $200 per hour. However, you are not bound by this suggestion. If your expertise is highly specialized and in demand, you can negotiate a higher rate. Conversely, if numerous experts possess similar skills, a more competitive rate may be necessary.

Hourly rates can reach substantial levels; for example, one expert in pharmaceutical M&A commanded a rate of £5,000 per hour due to their unique expertise. A U.S.-China relations lobbyist charges between $400 and $1,000 per hour for consultations.

Best Practices During Consultations

During consultations, consider these guidelines:

• Ask clarifying questions to understand the client’s key concerns and address them effectively.
• Strictly adhere to all compliance restrictions.
• Stay informed about current events in your field.
• Acknowledge the limits of your knowledge and avoid speculation.
• Offer referrals to other experts through the network when appropriate.

Next Steps

We recommend registering with major expert networks, as well as LinkedIn and relevant job boards. Ensure your biography and resume are current. Consider becoming a public expert through platforms like Profnet and Help A Reporter Out, which connect experts with journalists.

For further information, explore Civic’s report on “The rise of the expert economy.”

Interim Executives and Consulting Networks

Unlike the brief consultations offered by experts in expert networks, interim executives generally undertake assignments lasting between two and six months. Several prominent networks facilitate these engagements, including Business Talent Group, Catalant, Eden McCallum (with a focus on the U.K. and Netherlands), EIM, Eleven Canterbury, Expert360 (based in Australia), ForteOne, HighPoint Associates, Alumni Global (U.K.), SMA, Talmix (U.K.), Umbrex, and 10EQS.

Further resources for Europe-based interim service providers can be found through the Institute of Interim Management.

Resources for Startups

Startups.com is particularly useful for tech startups seeking consultants possessing specialized knowledge. Bolster functions as an “on-demand executive talent marketplace,” specifically connecting rapidly growing companies with adaptable and reliable executive-level professionals.

Another option is Braintrust (a portfolio company), a talent network governed by its users, which links organizations with tech professionals who retain 100% of their earnings.

Specialized Networks

Certain networks concentrate on niche areas of expertise. For instance, Accordion Partners consultants collaborate directly with sponsor management teams, concentrating solely on the office of the CFO.

Their work encompasses the entire finance function, including FP&A, operational and technical accounting, M&A, and performance improvement initiatives.

Tatum Executive Services offers experienced CFOs, CIOs, and senior finance professionals to guide companies through various challenges.

Target Market Specialization

Some networks focus on specific client segments. BlueWave, for example, connects private equity firms with external resources to address their unique requirements during due diligence and value creation processes.

For a deeper understanding of the typical interim executive profile, the survey conducted by InterimExecs provides valuable data.

Securing Consulting Opportunities Through Direct Engagement

Beyond conventional methods, alternative avenues exist for obtaining consulting engagements. One approach involves establishing a relationship as an advisor with prominent consulting firms.

Many large consultancies maintain resources for external expertise, such as PwC’s Talent Exchange, which functions as a database of independent consultants.

Adham Abdelfattah, who provides advisory services to McKinsey’s senior partners, emphasizes the importance of technological proficiency. He states, “A strong understanding of technology is highly prized when seeking an advisory role with leading firms.

Technology represents a key area of need for these organizations, and they consistently seek experienced professionals who possess both technical knowledge and managerial acumen to serve as advisors.”

According to Abdelfattah, initiating contact through networking, or even direct email outreach, can be effective for individuals with pertinent expertise. Successfully engaging one or two partners can lead to onboarding as an advisor.

Leveraging Niche Consultancies

Another effective strategy is to collaborate with specialized consultancies within your area of expertise. A substantial number of smaller consulting firms operate by utilizing external, part-time consultants as required.

Gaining inclusion on these firms’ lists of available consultants is generally more attainable than securing a full-time position.

Resources like TheConsultingBench provide access to a database containing information on over 600 consulting firms, facilitating connections with potential clients.

• Networking is crucial for establishing initial contact.
• Expertise in a specific niche is highly valuable.
• Databases like TheConsultingBench can streamline the search process.

These alternative routes offer viable pathways for individuals seeking to enter or expand their presence in the consulting landscape.

Board of Directors

When selecting individuals for their boards, organizations typically prioritize candidates demonstrating established leadership capabilities. Specific expertise, such as a strong financial acumen or international operational experience, is also highly valued. Furthermore, a candidate’s professional network and connections to potential clients are often considered crucial assets.

Aspiring board members generally require a proven track record of leadership, often at the executive or C-suite level. A recommended initial step towards securing a board position involves submitting a resume to prominent executive recruiting firms, many of which specialize in board placements. Cultivating relationships with key investors within your industry can also yield significant benefits over time.

Several resources are available to aid in this pursuit. Directors & Boards offers knowledge and skill development for directors, leaders, and owners of family businesses. The NACD’s (National Association of Corporate Directors) Accelerate program equips participants with the essential tools and resources for a successful directorial career.

Faster Landings provides a “Landing Board Seats” program designed to assist candidates in obtaining board positions. The Private Directors Association regularly hosts webinars focused on board-related subjects. In Canada, the Institute for Corporate Directors supports members in effectively fulfilling their director roles through professional development and learning opportunities.

Currently, a significant emphasis is being placed on increasing board diversity. According to the 2020 Spencer Stuart Board Index, women directors comprised 28% of S&P 500 boards, while minority representation stood at 20%. The average age of a board member is 63, with an average tenure of 7.9 years.

The composition of new directors is also evolving. Active CEOs and presidents represent 17% of new appointments, a decrease from 26% in 2010. Conversely, retired CEOs and presidents now account for 19% of new directors, compared to 17% in 2010. There's a growing trend of new directors originating from financial backgrounds (27% in 2020 versus 21% in 2010) and functional roles (22% in 2020 versus 18% in 2010).

Director compensation has seen an upward trend. Average total compensation rose from $215,000 in 2010 to approximately $308,000 in 2020. Committee chair retainers increased from $15,000 to nearly $23,000 during the same period, and committee member retainers rose from $9,600 to almost $12,000.

For women and minorities seeking board roles, several organizations offer support. Boardroom Bound focuses on preparing diverse talent for governance leadership. Catalyst provides a curated list of organizations offering networking, education, and leadership programs for executive women interested in board service.

WCD (Women Corporate Directors) is the largest global membership organization for women corporate board directors, fostering connections and promoting visionary corporate governance. DirectWomen aims to increase the representation of women lawyers on corporate boards by developing and positioning them for these roles, also serving as a resource for companies seeking qualified candidates.

Finally, the Executive Leadership Council comprises current and former Black CEOs and senior executives from major corporations. Their Corporate Board Initiative aims to raise awareness, improve preparedness, and increase the visibility of members pursuing corporate board service.

Senior Advisor Networks

Senior advisors represent a group of experienced executives, backed by investors, who collaborate closely with investment funds. Their roles encompass deal sourcing, providing guidance to portfolio companies, and offering board-level service and mentorship.

As an example, I was involved in the development of Chambers Street Executive Network, a dedicated advisor network created for Goldman Sachs Special Situations Group.

The time commitment for these positions generally ranges from two to ten hours per month. Compensation structures are variable, depending on the services rendered, and can be delivered as a retainer or a fee for service.

Often, payment is made directly by the company benefiting from the advice, rather than the fund itself.

Benefits of Utilizing Senior Advisor Networks

Senior advisor networks provide a talent pool option that is both cost-effective and delivers substantial returns. They distinguish themselves from conventional talent acquisition methods in several key aspects:

• Relationship Length: Engagements typically span six months to several years, contrasting with the shorter durations of expert consultations (one to three months) or the permanent nature of executive hires.
• Cost Considerations: Senior advisors are commonly compensated via a retainer, offering a more predictable cost compared to the hourly rates charged by expert networks ($1,000/hour) or consultants ($300-$700/hour), or the significant expense of a full executive hire (one-third of total compensation).
• Compensation Structure: Due to the extended relationship, compensation can be tied to the value generated and ongoing engagement with client companies, rather than simply billing for time spent, as is common with experts and consultants.
• Data Security: While Non-Disclosure Agreements (NDAs) can be utilized with external consultants, the risk of information leakage is generally lower with senior advisors who have a long-term commitment and vested interest in maintaining confidentiality.

Several venture capital firms are implementing “fellowship” programs designed for industry leaders.

For instance, Shift’s Defense Ventures Program has hosted “eight cohorts of up to 25 Fellows from across the U.S. Armed Services,” offering intensive programs focused on venture capital, the technology startup landscape, cybersecurity, and artificial intelligence.

Furthermore, they are planning to launch an “executive seminar,” a concentrated week-long program mirroring the Fellowship, specifically tailored for senior leaders within the Department of Defense and U.S. Armed Services, in the coming year.

Private Equity Deal Executives

An alternative career path involves identifying a suitable company for acquisition and collaborating with an investor to secure funding. A deal executive – sometimes referred to as an executive in residence or acquisition entrepreneur – actively seeks investment opportunities or companies to develop, often assuming the role of CEO. This position typically offers a base retainer, supplemented by potential finder’s fees and/or compensation as the new company’s chief executive.

Typically, aspiring deal executives demonstrate a proven track record of successful leadership at a senior level, or as a direct report to C-suite executives. Crucially, they must also present a well-defined deal thesis or a letter of intent to a private equity or venture capital firm.

Private Equity Fund Priorities

Private equity funds are fundamentally focused on sourcing deals, rather than recruiting executives. Their priorities, in descending order of preference, are as follows:

As a deal executive, your approach to PE funds should emphasize a clearly articulated deal thesis, positioning yourself as the primary access point to that specific opportunity. The scope of the proposed deal must also be realistic to demonstrate your ability to successfully identify and secure it.

A robust investment thesis generally incorporates several key components. These include a precise definition of the target industry – specifying its niche, size, and geographic focus; a transaction rationale aligned with the company’s potential for growth; a foundational financial market analysis encompassing trading ranges and feasibility assessments; a detailed outline of value creation opportunities and a corresponding implementation plan; a clear explanation of why your team is uniquely qualified to lead the initiative; a list of 5-20 potential target companies; the current status of any discussions with these targets; and preliminary considerations regarding a potential exit strategy, such as an IPO or sale to a strategic buyer.

Furthermore, you should prepare a deal memo, comprising a concise one-page teaser (serving as the initial email), a comprehensive business plan, an executive profile, and detailed strategic, operational, and financial projections.

Private equity investors prioritize three key attributes in deal executives: credibility, compatibility, and a proven ability to identify promising deals.

To establish credibility, prior experience in CEO-level positions, or direct reporting to C-level executives, is essential. Ideally, candidates possess 10+ years of experience within their target industry or a closely related market, coupled with a decade of experience managing profit and loss (P&L) responsibilities – experience with balance sheet management is highly valued.

Demonstrating personal financial investment further enhances credibility, signaling a genuine commitment to the venture. The amount invested should be proportionate to age; a 35-year-old is not expected to contribute the same level of capital as a 50-year-old. A readily available management team, expertise in corporate governance (including board experience), and a background in investor relations are also advantageous.

Compatibility is ensured when your objectives and incentives align with those of the PE or VC fund, as well as the established timeline for achieving goals and executing the exit strategy. Positive personal rapport fosters a more collaborative working environment and maximizes potential synergies.

Successful deal-makers are typically entrepreneurial and sales-driven, with a willingness to relocate if necessary. Proactive deal identification is a core expectation. Financial stability and a supportive partner, enabling you to pursue deals without immediate salary, are also beneficial. Prior acquisition experience can significantly streamline the process.

A growing number of firms are focusing on partnerships with operating executives, often identifying themselves as search fund sponsors. U.S. funds actively pursuing this strategy include Broadtree Partners, Buy+Build Fund, Endurance Search Partners, Frontenac, GTCR, Housatonic Partners, NextGen Growth Partners, Pacific Lake Partners, Post Capital Partners, Search Fund Accelerator, and TDV.

Private equity/executive intermediaries function as a hybrid between investment banks and recruitment firms. They support executives throughout the transaction process. For example, Blackmore Partners focuses on executives with “full P&L responsibility of $100 million or more in work history, currently employed in senior leadership positions, and possessing 10+ years of industry experience.” Harvey & Company is a buy-side acquisition advisory and principal investment firm that collaborates with “proven operators who bring exceptional industry experience and connections to build businesses.” Orbit Partners assists “the best investors in partnering with the best advisors to successfully structure deals.”

Private equity funds and executive intermediaries follow a standardized process for executing transactions. This typically begins with a feasibility review of the industry, analyzing market trends to identify opportunities, conducting valuation analysis, assessing capital intensity requirements, and evaluating fragmentation for potential acquisitions of smaller players.

They then assess potential executives based on the three desired characteristics previously mentioned. Finally, they identify target companies and seek sponsors for the transaction.

The timing of sponsor or company sourcing depends on the specific transaction approach. They may secure a preliminary agreement with a company before seeking a sponsor, or they may identify a sponsor and then search for a suitable company, with the executive prioritizing funds with a history of executive-led transactions and interest in the relevant industry – this approach is more common for larger deals.

Often, companies prefer selling to management teams, even if it means accepting a slightly lower price than a competitive auction might yield. Key reasons include maintaining confidentiality, ensuring continuity, accelerating the process, reducing investment banking fees, and avoiding the perception of selling the company for too little.

Transaction Process Steps

The transaction process typically involves five key stages:

Step 1 — Relationship Launch (2-4 weeks): Initiate contact with funds operating in your industry and who value your expertise. Conduct initial meetings to establish the relationship and evaluate the investment thesis.

Step 2 — Partnership Finalization (1-4 weeks): Refine the thesis with your partner and agree on compensation, financial terms, and exclusivity. Conduct background checks and develop a deal origination plan.

Step 3 — Opportunity Identification (1 month – 1 year): Employ either a concept-driven approach, searching for industry inflection points, or an opportunistic approach, networking through all available channels.

Step 4 — Target Evaluation (up to 3 months): Key questions to address include: “Is a deal feasible?”, “Can we attract investors?”, and “Can you effectively lead the deal?”

Step 5 — Closing (up to 3 months).

The following table summarizes typical economic terms for midmarket private equity acquisitions:

Fee type	Payer	Amount	Recipient
Transaction fees	Capital providers	0.5%-3.4% of deal size*	PEG pays a finder’s fee of 1%-3% of enterprise value plus carry to deal finder and the buy-side investment bank (if any). (The company, specifically the selling shareholders, pay the investment banker seller’s fee.)
Monitoring fees	Company	0.2%-4.4% EBITDA (median 1.2%)* **	The company pays outside board members for ongoing services (~$5,000+ per meeting in addition to equity incentives).
Expenses	Company	Post-deal expenses, not pre-deal	The company pays PEG for post-deal expenses. It’s key for buy-side operating executives/investment bankers to get PEG to commit to pay broken deal costs.
Investment rights	—	—	Usually unlimited co-invest rights for executives involved, with no PEG management fee. Executives will, however, pay pro rata monitoring/other fees.

This does not reflect compensation for an executive’s role as a company employee post-deal. Note that transaction fee and carry are inversely related.

* Robert Seber, Dechert LLP, “Transaction and Monitoring Fees: Does Anything Go?”, 2003.

** The PEG’s fund documents will generally discuss whether a portion of that fee (often half) is set off against management fees that the LP’s would otherwise owe.

Other data based on Akoya Capital, Oberon Securities, and other interviewees.

Entrepreneurs in Residence at Venture Capital Firms

A growing number of venture capital (VC) firms are actively recruiting experienced entrepreneurs in residence (EiR). This position, while continually adapting, generally involves seasoned entrepreneurs developing a new startup with the backing and resources of the VC fund.

Beyond startup creation, EiRs often contribute to the firm by providing support to companies already within the VC’s portfolio. They may also be tasked with assessing the viability of prospective investment opportunities.

Compensation for Entrepreneurs in Residence

The compensation structure for EiR positions can vary. It’s common for EiRs to initially receive no salary, contingent upon successfully launching a new venture.

However, some firms offer a retainer fee, typically falling between $90,000 and $150,000, to cover living expenses and provide a base level of financial security.

Examples of Formal EiR Programs

Several venture capital funds have established well-defined EiR programs to foster innovation and identify promising new ventures.

• General Catalyst operates an XIR (executive-in-residence) program. This program focuses on collaboration between the firm and experienced executives to either build entirely new businesses or revitalize existing growth-stage companies.
• Foundation Capital actively selects individuals to cultivate businesses centered around emerging technologies. Ani Chaudhuri has documented his experiences as an EiR focused on Blockchain technology.
• VersatileVC provides an entrepreneur-in-residence program specifically designed for founders whose startup ideas align with the firm’s investment focus.

These programs demonstrate the increasing value VC firms place on leveraging the expertise of experienced entrepreneurs to drive innovation and identify promising investment opportunities.

Venture Capital Scout Programs

A growing number of venture capital firms utilize formal “scout” programs as a means of rewarding individuals for identifying potential investment opportunities. Sequoia’s program, established over a decade ago, stands out as a prominent example, having distributed $100,000 to each scout from a dedicated $180 million fund.

Typically, scout compensation consists of a predetermined fee and/or a share of the profits generated from successful deals, though guaranteed remuneration is not standard. As detailed in Jason Calacanis’ “Angel,” Sequoia’s scout program distributes returns with a structure of 45% to the scout, 50% to Sequoia, and 5% allocated to a bonus pool for program participants.

The application process for these scout positions is often highly competitive, with some programs receiving thousands of submissions for each available role. Jai Malik, currently a venture partner at Republic and formerly a corporate Scout for Tata Communications, emphasizes the importance of demonstrating a willingness to learn: “A key attribute they look for is a demonstrable openness to acquiring the skills necessary to succeed.”

Several other firms have implemented similar scout programs. These include Accel, Chapter One, Village Global, KPCB, Contrary Capital, University Growth Fund, New Stack Ventures, Lightspeed, Atento Capital, Backed VC, Harlem Capital, and Index.

VC Fellowships

Beyond scout programs, some VC funds provide fellowships designed for students. These fellowships often involve working within a portfolio company and participating in VC-hosted events. Bessemer’s Fellowship Program, for instance, places students in rapidly expanding technology companies, providing valuable experience and access to mentorship.

The 8VC Fellowship offers a different approach, combining a software engineering internship at an 8VC portfolio company with weekly events featuring entrepreneurs, executives, and investors. Soma Capital’s Fellowship enables students to intern at a seed-stage portfolio company in roles focused on design, engineering, or business development, followed by an incubation phase with Soma’s support.

* Disclosure: David Teten holds an investment in Braintrust through HOF Capital, where he previously served as a managing partner.