Ideal Backgrounds for a Career in Private Equity

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There is no standard way of entering the private equity industry, but there are certain characteristics firms look for in an ideal candidate.

While private equity firms want people who are technically proficient, there are other important factors they consider as well. Success in private equity is related to having the ability to source deals, the ability to focus, industry knowledge, communication skills, and a strong work ethic.

Private equity continues to be an attractive career path for both recent graduates and experienced financial veterans. Firms are very selective about who and when they hire, typically taking on just a few new people each year.

If you’re determined to join the private equity industry, here’s what you need:

Educational background
The private equity industry is very selective when it comes to educational backgrounds and will typically target graduates from top universities. Private equity firms have many applicants to evaluate during the recruiting process, so educational background is an easy first screening technique. In addition, the networking aspect of the industry is very important, so your business relationships matter.

Although it’s not required that you’re a finance major, your college degree should demonstrate strong analytical skills.

Private equity firms are also very picky about MBA degrees. Many MBAs in the industry come from Harvard, Wharton, Insead, and Stanford. Alex Crisses, managing director at General Atlantic, is a prime example of this, as he holds a B.S. in economics from The Wharton School of Business and M.B.A. from Harvard Business School.

Professional experience
When entering the private equity field, it’s typical for people to have two to five years of relevant work experience. This includes investment banking, strategic consulting, or corporate development.

It’s unusual for people to enter a private equity firm with just an undergraduate degree because most firms are small businesses that don’t have the time or resources to provide internal training. Although there are some notable exceptions at big equity firms, potential candidates with just an undergraduate degree should have completed several internships in strategy consulting, banking, or at other private equity firms.

Important Things to Remember Before Purchasing a House

A photo of a home. In the foreground there are two hands—one person is giving the other person the keys to their new home.

Purchasing a house is a major investment. Keep these tips in mind before making any final decisions.
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Buying a house can be an intimidating process. But these quick tips can help make the process a little easier for prospective buyers.

  • Shop with your head, not your heart. It doesn’t matter how much you love a home’s quaint, old fireplace—it won’t be worth it if the rest of the house is not a good fit for your budget and needs. To prevent the heart from taking over, make a checklist for evaluating the home. Make sure you’re honest when filling it out. Rate things on the checklist from “necessary” to “nice-to-have” to “bonus perk.” This will prevent you from falling in love with a house that has none of your essential requirements, and it will give you pause to think.
  • Hire professionals you can trust. Don’t ever waive inspections. Trust the advice of a thorough, licensed, home inspector. You should also make sure that there aren’t any conflicts of interest. Do your research, and don’t ever choose an inspector that your seller recommends.
  • Give yourself time. An often-overlooked aspect of the home-buying process, but the importance of taking your time is crucial for several reasons. For one, it can take longer than you expect, so make sure you continue to have a place to live in the meantime. If you are currently renting, make sure you can extend your lease on a month-to-month basis. Taking your time also means that you aren’t allowing yourself to feel pressured. The ‘perfect property’ is a myth, and don’t let a seller convince you otherwise. There will always be other opportunities out there, but it may take a while of touring mediocre properties before you really start to find the ones that fit your needs. Operate within your own timeline, but do plan to spend at least three months visiting and researching property before making a decision.
  • Consider more than just your finances. Take into account more than just the listed price; look towards the future. What does the surrounding area look like? Do people maintain their property? Since part of your home value is determined by the property surrounding it, you should carefully evaluate the neighborhood. What is the crime rate? Will the location add more time to your commute? Will this house have a yard and maintenance that you can afford to maintain? Budgeting only on the present moment can lead to disappointments in the future.
  • Don’t forget to examine the HOA contract. Does it permit renting? Are there any serious restrictions to things about the property you might want to change? If the contract clashes with concrete plans you have for the future, this property is most likely not a good fit.

Americans Are Apprehensive About “Enhancing” Human Abilities

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For years, there’s been speculation about scientists being able to enhance human abilities through advanced technology. But what was once dismissed as mere conspiracy theory may become a reality sooner than we think.
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For fans of science fiction, the idea of humans artificially enhancing their abilities (by implanting computer chips or genetically modifying embryos to protect against various diseases or disorders) is a pretty familiar idea. And some of those technologies are likely to arise within the next few decades, but with that technology comes some serious concerns.

According to a recent survey conducted by the Pew Research Center, while many Americans believe that we’ll be able to transplant artificial organs, cure most cancers, or implant computer chips into our bodies within the next fifty years, they aren’t quite sold on whether or not we should actually do those things. The survey asked people how likely they would be to have computer chips installed into their brains, get synthetic blood transfusions, or edit their babies’ genes. About a third of respondents said they would consider having a computer chip installed into their brain or get a synthetic blood transfusion. Meanwhile, just about half said they would consider editing their babies’ genes.

Among the findings, the Pew Research Center concluded that Americans with strong religious identities were less likely to want such procedures, and more likely to think that they were a bad idea in general, stating that such procedures were crossing the line by interfering with nature. However, people were also more likely to considering undergoing an enhancement if it were controllable or reversible, or if those enhancements would bring about a sort of health equality. People were less likely to think it is okay for synthetic blood to make people faster or stronger than they are, or to let computer chips improve cognitive abilities.

The survey tells us that overall, Americans are confident that science will continue to advance human capabilities as we move forward, but our fears about such procedures might outweigh the potential benefits. While curing cancer seems like an easy sell, implanting computer chips into our brains seems like it might be slightly harder to pull off.

Then and Now: IPOs, Private Equity, and the Next Generation of the Tech Boom

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IPOs and the kinds of technology behind them have changed since the golden days of 1990s Silicon Valley.
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The Dot Com bubble of the 90s changed the face of tech and finance in ways that are still affecting these realms today. As the hot new kind of business, tech companies proliferated in the 90s, with the IPO as a rite of passage into the “adulthood” of a “real” business. Some companies, like Apple, Yahoo, and eBay, live on; others crashed and burned when the bubble burst.

Today, tech companies shift to IPOs in different ways and for different reasons than they did in the 90s. Silicon Valley is still booming, but startups are far more likely to turn to individual investors as opposed to IPOs when trying to fund growth. The number and the value of technology IPOs are both way down from the 90s, more resembling what the market saw in the early 80s, albeit with higher amounts of money raised.

Funding in the heyday of the 90s tech bubble came from sources like Thom Weisel’s Montgomery Securities, a private equity firm built on the idea of supporting smaller, more individualized businesses. Like many of those tech superstars of the 90s, however, Montgomery Securities no longer exists—though Weisel himself has moved on to other private equity endeavors in the same vein as the company that started it all.

Part of the reason there was so much energy and enthusiasm behind tech companies of the 90s is that their stock prices soared without any real plan on how to live up to the related, absurdly high expectations. Nowadays, stock prices for tech companies rise or fall based on company profits. In fact, tech company stock is now a bit cheaper than it was then.

Modern investors are also different from their 90s counterparts in that they seem statistically more interested in investing in companies that aren’t already profiting by the time they reach their IPO. According to Bloomberg, of the 206 companies that had IPOs in the US in 2014, 71% had had no profits in the year before their offering.

Unlike the 90s, biotech seems to be where it’s at in terms of rising tech companies these days. Biotech companies tend to have IPOs similar to what you’d see in the 90s: small companies with no revenue but lots of promise, going public to raise the money they need to bring a product to market. That’s pretty specific to today’s biotech IPOs, though; in the rest of the IPO market, Bloomberg says, companies are waiting longer to go public, which is why there are fewer IPOs over all.

We may not be experiencing the sort of tech boom that became an emblem of the 90s, but there are still plenty of opportunities for small companies to make their mark on the world. Whether it’s through individual investors or IPOs, cutting edge tech will always have a place in the market. It’s just that the details of that place are likely to change over time.

The Hidden Costs of Self-Employment

A photo of a tax form that asks filers to state whether they are self-employed or not by checking either the "yes" or "no" box.

Self-employments brings forth images of autonomy and flexibility. However, perks like these come with plenty of downfalls. Image: Shutterstock

From the outside looking in, many people view self-employment as an ideal career. After all, self-employment means a person can be their own boss, work their own hours, and set their own goals. But for every pro there is an equal—and sometimes even greater—con. The following comprises a list of some of the hidden costs of self-employment along with a few solutions.

Loneliness

Transitioning from a social work environment to a solitary one can be quite the culture shock, particularly for extroverts. Being self-employed means being completely self-reliant, and the extreme amount of isolation can sometimes result in depression. However, on the flip side, maintaining and building client relationships is absolutely essential when it comes to being successfully self-employed. Phone calls and client meetings can provide a much-needed social reprieve from largely solitary work. For those who work from home, it’s essential to go on a couple of walks throughout the day. It’s easy to get cabin fever from eating, sleeping, and working under the same roof.

Motivation

Everyone claims they’re self-motivated, but nothing will put that claim to the test more than self-employment. It’s easy to stay motivated when things are going great. It’s when the going gets rough that all the inspiration starts to fade. One solution is to create a “vision board.” Vision boards are visual representations of all the things that serve as internal motivators. For example, if John Doe’s primary motivation is to own a yacht someday, he would cut out an image of a yacht and post it onto a sheet of poster board. Vision boards are a great tool to refer back to when the enthusiasm just isn’t there.

Money

Perhaps the most obvious con is the fact that self-employment is 100% commission based. On that note, it can take an incredibly long time for unpaid marketing efforts to show up in a paycheck. As previously mentioned, being self-employed means one must acquire a strong client base. A lot of work goes into building that client base, including maintaining a website, updating social media, attending networking events, and posting advertisements. It can take months, even years before a strong client base is established.

All of these things combined should be considered before deciding to go on a solo career venture. For introverted, optimistic, risk-taking personalities, it can certainly bring a lot of happiness and fulfillment. For others, it can bring on a lot of frustration and disappointment.

Personality Tests Are The Latest Technique in Recruiting

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Personality tests have made a major resurgence as of late, particularly for their usage in high-level recruiting efforts.
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Personality tests are nothing new. McDonalds, Taco Bell, Home Depot, and Walmart have been administering them for years. But while these tests are usually geared towards lower-level positions, what has changed is how recruiters are using them to filter out candidates for higher-level positions.

According to Forbes, the average number of people who apply for any given job is 118. That’s a ton of time spent skimming over résumés, reading cover letters, and fact-checking credentials. In other words, if there is a faster, more efficient method of sifting through candidates, recruiters are going to use it.

That’s where personality tests come into play. Personality assessments are now one of the first lines of defense in the application process. Once upon a time, it was enough to simply look up a company’s core values on their website and touch on those values in a cover letter or interview. Now, personality tests have evolved to the point of being able to gauge how good a fit a candidate would be based on a complex algorithm.

Here’s how it works. Recruiters guide applicants to a web link where they can login and take the test. There are a number of companies that administer these assessments. Let’s use Plum for example. Plum uses an untimed test to gauge strengths and weaknesses in three main areas: problem solving, personality, and social intelligence.

Depending on the position, recruiters are likely to value some traits over others. For example, a recruiter for a retail sales position is likely to value personality and social intelligence over problem solving. On the other hand, a recruiter for an air-traffic controller position is likely to value problem solving over personality and social intelligence. Based on these preferences, a candidate’s results will be sent to the recruiter with a percentage-based match. This makes it incredibly easy for recruiters to see at a glance who is well suited for the position and who isn’t.

Although it sounds rather elementary, personality tests have progressed to the point of near-perfect accuracy. Many of these tests, like Plum’s, are developed by doctors who have spent years studying workplace behavior. Recruiters are now investing in this technology not only for the time it saves, but also for the money it saves by selecting the right candidate.

Find Your Passion, Find Your Business

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In order to create a successful business, you need to find your passion.
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Starting and maintaining a business requires a lot of things, but one thing that can’t really be taught is passion. You have to love what you do if you want to turn it into a successful business. But if you lack the kind of passion for something that keeps you up at night, you may be wondering where that comes from. You may be tempted to wait for it, biding your time until something comes along that you’re passionate enough about that you can make it into your career and your life. What’s that they say about a watched pot never boiling?

You can’t sit around and wait for passion to suddenly appear. You have to go and find it.

People are generally passionate about things that they’re good at. So you should ask yourself: what am I good at? Think of some things that you enjoy doing, and get better at them. Learning is a lifelong process, and the more you know, the more experience you have to draw from when it comes to starting a profitable business.

Take your time and figure out what you’re good at, what you want to keep doing, and what you can turn into a business without running the risk of losing your love for that activity. Maybe you like painting. But are you willing to make yourself do that every day, whether you want to or not, in order to make it the cornerstone of your financial future? Are you willing to delve into the marketing and number-crunching that would also be required to make it a business instead of just a hobby?

You have to strike a balance. Everybody wants to be their own boss, and the entrepreneurial lifestyle has a certain romantic attraction. But it’s also possible to burn out and grow to hate the thing you once loved. Just give it some thought before you go off to start that business.

Broke? You Can Still Start a Business

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Starting your own business without capital can be done.
Image: World Bank Photo Collection/Flickr CC

Starting a business can be difficult and, above all, expensive. For people who want to be entrepreneurs but lack startup capital, getting a business going can be daunting. But there are a lot of tricks that allow you to get a business underway without needing a significant next egg. Starting a business, whether you have capital or not, begins at the same place: finding something you can offer.

The easiest place to start is to think of a problem that you can help address. Whether that’s a serious issue like testing water for contaminants or a “first world problem” like finding somebody to walk your dog at the last minute, there are a myriad of issues out there that people need help with–and they’re willing to pay other people for that help. Once you know what problem you’re trying to address or what product you want to create, take a step back and think about ways that you can approach that problem using the skills and resources you have at hand.

Maybe you can start by walking dogs, using a website and flyers to generate business before you try to develop a mobile phone app. Maybe you’re a great editor who can freelance while you figure out how to turn that into a business. The key here is to use the tools you already have in order to get your business ideas rolling. As you work in whatever field you’ve chosen, you’ll be able to find out what niches there are within that field that you can try to fill with a subsequent business model or product.

It also gives you more experience in the field in question, which will be more impressive to potential investors. Whether you seek out crowdfunding or more traditional investments, people are going to want to know that you have a good idea of what you’re doing before they give you their money.

Are Video Games Finally Starting to Reflect Their Audience?

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Video game producers are becoming more aware of their audience, including women both playing video games and those in them.
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The video game industry hasn’t done a great job with women, either in the audience or in the games themselves. The sexualization of female characters is pretty well documented, but it’s actually trending down, at least for playable characters. A recent poll found that games featuring playable women characters–not secondary or background characters–are treating those women as characters and not as sex objects. They looked at games published between 1983 and 2014 and found that sexualized playable women peaked in the 1990s, the hey-day of the old Tomb Raider games, and has been declining since 2007. The recent Tomb Raider games, in which Lara Croft isn’t treated as a sex symbol, are an excellent example of this.

So what difference does this make? Well for one, it’s probably pushing sales. Women make up about half of the game buying market, a fact which makes the near constant marketing of games to young, straight white men ludicrous. A move toward more realistic and well-rounded women characters is bound to draw in more women to buy those games, especially if they’re tired of playing grizzled white men, which are pretty much the default protagonists in mainstream video games.

The study didn’t find that women who aren’t playable, whether they’re allies, enemies, or damsels in distress, are any less sexualized, though, and that’s not going to help sell those games to women. The Grand Theft Auto franchise, for example, includes plenty of strippers and prostitutes, but has yet to include a single playable woman character. Fighting games like Dead or Alive or Street Fighter remain the bastion of sexualized playable characters, with an audience that seems to be predominantly male, but probably isn’t in reality.

As the reality of audience demographics finally sinks in for various publishers, chances are the industry will continue to take note and continue taking steps toward games that appeal to a wider portion of their audience.

Clinton Appoints Small Business Advisor

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Hillary Clinton has hired Rhett Buttle as a Business Outreach Director focusing on small businesses.
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Most organizations that focus on small business, like the U.S. Chamber of Commerce or the National Federation of Independent Business, tend to be on the conservative side, and usually throw their lot in with Republican candidates and policies. However, considering Trump’s record in dealing with small businesses and the economic mess Mike Pence dragged Indiana into, it wouldn’t be all that surprising if more small businesses turned away from the Republican Party.

For those that do, they’ll have Hillary Clinton to turn to instead. Last year, Clinton said she wanted to be a small business president, and she has since outlined a few modest steps toward improving the lot of small business, like forcing large corporations to pay smaller suppliers promptly.

Recently, she appointed a Business Outreach Director who will focus on small business: Rhett Buttle, who has spent some time as the Small Business Majority’s President and their Managing Director. Small Business Majority is a liberal answer to the usually conservative organizations that aim to promote small business. They also don’t have a member base because, according to their founder, John Arensmeyer, that would result in their being beholden to certain businesses over others, and their goal is to help small business overall. To that end they’ve run numerous webinars and other events to work with local businesses and business organizations. To date they’ve worked with over 6,000 organizations and 15,000 businesses, which are some pretty impressive figures for a group that’s only about a decade old.

It’s unclear if Buttle will continue to serve under Clinton if she gets elected, but it is safe to say that in a Clinton presidency, Small Business Majority would likely have significantly more pull and reach than they have in the past, and that could provide a nice counterpoint to the overwhelming pull that large corporations have with the government.

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