Center for Private Equity and Entrepreneurship (CPEE): How did you become interested in the private equity industry?
Maynard: I went to Tuck after going through the credit training program at Manufacturers Hanover Trust. My goal was to get a much broader exposure to business so I could do something different after I graduated. The core curriculum at Tuck was very helpful. Coming from a finance background, the marketing, economics, and entrepreneurship courses were particularly useful to me. There wasn't a big private equity/venture capital tradition at Tuck at that time, but there was a big orientation toward entrepreneurship. I found that whole concept intriguing, and it became a mission for me to try to find a job in venture capital.
CPEE: Why didn't you want to be an entrepreneur?
Maynard: I found the idea of being involved in multiple entrepreneurial endeavors more appealing than being involved in just one. I just didn't have the risk profile one needs to be an entrepreneur. I wanted to spread my risk out over a portfolio, rather than have it all concentrated in one company.
CPEE: What was your strategy for getting a job in venture capital?
Maynard: I started looking for a summer job during the fall of my first year at Tuck. I initially took the direct approach, which was to look at the Pratts guide to private equity. I went through the list, and looked up alumni. I probably contacted 40 or 50 people, but got no interviews. It was quite discouraging.
The next fall I tried a different approach. During my unsuccessful job search I had made contact with Ed Glassmeyer [T'68], who had chatted with me on the phone. Two finance professors had agreed to let me do an independent study on private equity which was sponsored (intellectually, not financially) by Ed. That provided enough of a hook so that, when I was sending out job letters during winter and spring of my second year, I had a reference in the industry. I am not sure anyone actually called Ed to ask about me, but having his name on my resume unquestionably opened some doors.
I ended up with four job offersthough only one of them was in private equity, working for John Hancock in their venture capital group. Although it didn't seem like I was going to be on the front lines of the venture capital marketplace at the time, I took the job based on the advice I got from Steve Woodsun (a managing partner at Summit Partners in Boston). He said something like, "Take the job. The hardest part of this business is getting in; once you are in the industry, you can learn a lot and cultivate more options."
CPEE: Did you like your job at John Hancock
Maynard: John Hancock was a combination fund-of-funds and direct investment funds. I thought I was getting into the direct investment business, and doing some fund-of-funds on the side. And, in the early days, I did a lot of direct investing. One of the good direct investments I made was in the Boston Beer Company, and one of the bad ones was in a sneaker company called Kaepa.
[Laughing] Yeah, no one has ever heard of the companyit was a disaster. So I did some direct investing, and had some painful experiences. The private equity market in the late 1980s was pretty unpleasantsort of like a root canal. Nothing was working, everything was losing money left and right, and direct investment opportunities were few and far between. So I had my eyes peeled for some other way to approach the market, thinking, "This is no funlet's think of a better way."
In the early 1990s, I really got into the secondary market. We actually did our first few secondary deals in 1986, but I don't think anybody realized secondary deals were going to be a big part of the private equity market going forward. But by the early 1990s, we'd concluded it was an area that needed specific attention. So without much purposeful decision-making, I started leading the secondary effort.
CPEE: When was HarbourVest formed?
Maynard: HarbourVest grew out of the VC group at John Hancock. When I joined after graduating from Tuck, our group was called John Hancock Venture Capital Management. In 1989, the name changed to Hancock Venture Partners. In 1997, 12 of us bought the business from John Hancock in a management buyout.
Putting together a secondary group was challenging. Initially, we were worried that it was inappropriate to be calling limited partners to see if they wanted to sell positions to usand now we do that every day, of course. But back then, it seemed almost impolite and disrespectful to the general partners of the fund involved. The early secondary deals were complicated by other factors, too. Private equity limited partnerships, by their very nature, have different ways of accounting and different ways of valuing positions, so there was a certain amount of brain damage that came from simply trying to figure out what was out there to buylet alone trying to figure out a price to offer and how to transfer assets. All that stuff has gotten easier and more standardized as the market has evolved.
It's also a much more competitive marketplace now. Back then, there was no one else doing secondary purchases. I remember making an offer to buy some assets from one fund, and the woman exclaimed, "Well of course we'll sell it to youwe had no idea that anyone would want to buy this!" Obviously my price was too high.
CPEE: Given the changes in the private equity market, what advice would you give to MBA students wanting to get into the industry? Should they pursue an associate position at a private equity fund right out of business school, or are they better served by getting industry experience first?
Maynard: I've never been a big fan of going the industry route. When I was looking for a job in 1985, lots of people told me, "Why don't you get some experience in an operating business and then make the move over to PE?" But (as I mentioned before) I am a believer in the advice Steve Woodsun offered me in 1985. He said then that the hardest part of the business was getting that first job, so I should take one if I could get it. Now that I've been in the business for a while, I think that the move into PE is as hard coming out of an operating business as it is getting out of business school. So my advice would be to take the painful medicine sooner rather than later.
CPEE: How can private equity job seekers distinguish themselves?
Maynard: There is no silver bullet. You need to be persistent. You need get in front of people and sell yourself. That skill is very important, even after you get the job. If you are making a direct investment, you often need to be able to sell yourself and your fund to the CEO (funds often compete for the best investment opportunities). If you need to raise money for your firm, you need to be able to sell yourself and your fund to investors. When you have to convince the people you work with that they ought to do a deal, again, you have to be able to sell, sell, sell. It's a crucial skill in this business, so you need to show you have it from the beginning.