| Topic Name: |
mezzanine vs. venture |
| Message Name: |
Mezz is more valuable |
| Date Posted: |
08/03/2001 |
| In Reply To: |
I have an offer from a merchant banking division associated with a reputable I-bank and also a choice to become a part of a 'venture group' (focusing on early, mid-stage equity investments, target IRR 25-30%) or a 'mezz group' (later stage sub-debt, bridge and equity, 15-30% target IRR)...Comparing the two options what skills would be more valuable in one options vs. other, which experience would be considered more valuable, what would be differences between people working in these two groups. Thanks for your help. |
| Message: |
I would go for the mezz opportunity. With mezzanine deals you will have the best of both worlds - the chance to learn both about private debt and private equity financing. You will have to do valuation analyses where you value warrants and potential equity value and you will also be exposed to traditional credit analysis which could take you farther later on in your career. If you are also considering investing in your own deals, some downside protection is a nice feature in this market.
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