How This CEO Navigated The Male-Dominated Worlds of I-Banking & Private Equity
Key Takeaway: Take the time to talk to people in different jobs to figure out what you want to do
Top 5%: Excel
For many of us, finding where we best fit into the overarching world of “business” can be overwhelming. Danielle O’Rourke can definitely relate. “Everything gets lumped into this finance category,” she tells us. “But what is finance actually? It can mean so many different things and looks like so many different roles and jobs.” Because of the overarching category, Danielle initially had a hard time figuring out what she wanted to with her finance degree after college. It was only after she joined an investment banking seminar and spoke with people in the field that she decided to enter that sector. She went on to work for an investment banking firm after college, before navigating the world of private equity and ultimately becoming the CEO of Rond Capital in Nashville. She shared her advice on finding your niche in the business world, working in investment banking and private equity, and dealing with burnout.
How She Did it
I’m from a tiny town in Northwest Indiana called Portage. It's very much a blue-collar town where a large portion of the folks work in the steel mill industry. It was important to go to college; it was important to take the SATs, but there wasn't any focus on what you're going to do in your career, unless it was something like nursing or teaching.
The concept of “business” is just so big. My stepdad was a huge influence and helped set me on the path toward working in business in general. He made sure that I got some exposure to different fields outside of the teacher and nursing avenues.
I chose Indiana University because I got some scholarships and it had a great business program. I had no idea what I want to do inside business, but my stepdad really helped steer me towards a career in finance because of my affinity for math. I was fortunate to have the grades and SAT scores to get direct placement in the Kelley School of Business undergrad program, which allowed me to start taking more granular competitive business classes from day one.
Fast-forward to the end of my junior year, and I had interviewed for tons of internships, everything from large Fortune 500 companies to smaller businesses. But, I didn’t end up getting any internships between my junior and senior year. I think I was completely unprepared for those interviews. I didn't know how to interview or prepare for interviews. I didn't know what I wanted to do, so when people asked me what I was interested in, I didn’t have a great answer for them.
I had a professor reach out at at the end of my junior year and ask me to join a program called Investment Banking Seminar. It was a workshop that helped students better position themselves for careers in investment banking, by taking you to Chicago to be with investment banks, teaching you how to network, teaching you how to get your resume in line, helping you prepare for interviews, teaching you to speak the lingo, and just generally educating you on what investment banking is.
Up until then, investment banking was a foreign concept to me. But after getting into the program, I started doing as much research as I could. Everyone I talked to in investment banking said it sets a great foundation of skill sets and you become very well-rounded when it comes to what you want to do next in your career. That was really appealing to me.
Can you explain what investment banking is for those considering that option?
Investment banking is a career where your job is to help businesses buy and sell other businesses. That could be where you're representing a company that’s looking to sell their business outright or it could be raising capital in the form of IPO stock or private placements to other investors. Buying and selling companies is the most simplistic explanation for what you're helping businesses do, without delving into the actual functions of what you're doing.
After going through the interview process the fall of my senior year, I ended up having two choices: one was a big bank in New York and the other one was a small boutique firm based in Nashville. I ultimately decided that Nashville and the smaller bank was the better fit for me. When I was in New York at the big bank, I was looking at the people that I'd be working with and every single person there looked like they hated their lives. It was tough for me to see myself fitting into the culture there. They still worked a lot of hours at Brentwood Capital Advisors, but it was a friendlier culture and being from the Midwest, that was important to me.
What was working at Brentwood Capital Advisors like?
When I joined the firm, they were a lot smaller than they are today. There were only seven of us total at the company. There was one other analyst that I started with, compared to somewhere like Bank of America where you have potentially 50 other analysts.
Our focus most of my time was healthcare transactions where it was primarily representing business owners and middle-market companies and helping them either sell their business or sell a large chunk of their business.
I really enjoyed what I was doing and fell in love with M&A through my first few years at Brentwood. I loved getting to work with business owners who had put their life, sweat, and blood into their business, becoming a mini-expert on their company in a very short period of time, and helping them achieve a goal. By no means would their first point of contact be a first or second-year analyst, but you're in the room with them and you're working with their teams.
What made you decide to switch to private equity?
I spent all this time getting to know these companies and helping them tell their own story, but then as soon as you sell the company your job is done as an investment banker. You move on to the next transaction. But at private equity firms, your job is just getting started at that point. That is really what made me decide to move to the private equity space. I wanted to continue to be a part of this growth story, and my brain is more hard-wired towards analyzing opportunity versus dressing it up and selling it. I'm not a great salesperson.
How do you make the transition into private equity?
Private equity is just like investment banking in that it's fairly regimented on how they approach recruiting their junior-level talent. For private equity firms, the first junior-level higher position you go into is called an associate role. You almost have to have a background in either investment banking or strategy consulting. Without one of those two backgrounds on your resumes, it's impossible to get into the recruiting process. A big reason for that is that recruiters hold the key. If you're a first or second-year analyst looking to move into private equity, you have to get in front of recruiters.
I reached out to about 12 recruiters who focused either on private equity or finance jobs on the West Coast. I had introductory meetings with them, but there were very few opportunities that got sent to me. Part of that is because I came from a non-target bank in a non-target city.
There was an opportunity that came up at Riverside. I had an intro meeting with the recruiter and never heard from her again. I had worked with this private equity firm in my role at Brentwood and knew that the senior level folks knew them. They were kind enough to make an introduction for me at Riverside, which is where I ultimately got a job offer. I got reinserted back into the process by going around the recruiter. Had I not done that I don't think I ever would have heard from that recruiter again or gone through the rest of that recruiting process.
What was Riverside like?
I was with their microcap fund. We were focused on deals that were usually around 5 million dollars EBITDA. It was fairly generalist in terms of the industries that we were looking at. I went from looking at almost exclusively healthcare deals to looking at everything from dog food businesses to machine parts manufacturers.
Riverside is definitely a high volume private equity firm. They do a lot of deals every year, which means that you have to look at a lot of companies to find those deals. You could look at hundreds of deals just to invest in one. So it involved meeting with a lot of companies, and it was a fantastic learning experience, getting to talk to so many different management teams.
Why did you move back to Nashville?
There is very little work-life balance when you work in investment banking or private equity at a young age. You are working a lot of hours regardless of the bank you're working with because it's project-based work. I think a lot of people have this perception that once they get out of investment banking with crazy hours, they’ll be in private equity and it will get better. Well, that could be true if you're going to a group that doesn't do that many deals, but most firms are fairly high volume, especially ones that are deploying fairly large funds. And so that was not the case for me. I was still working a lot of hours.
It was challenging for my husband and me to get acclimated to Los Angeles because we didn't have a lot of time with my work schedule. I was effectively on call at all times, and I got burnt out to the point where stress was physically manifesting itself in my body in very strange ways. I had gone to the doctor for a neckache and the doctor effectively said that there's nothing wrong with me; it's stress. The same thing happened with stomach pains and it was stress. I had to take a really hard look at what was best for me as a whole person not just what was best for me from a career standpoint. And that ultimately led us to move back to Nashville and look for another opportunity where my work life balance could be more manageable and sustainable.
How did you find the job at Martin Ventures?
It was one of those fairly opportunistic situations, where at the same time that I was looking to move back to Nashville, Martin Ventures was looking to bring on someone to manage transaction execution. Martin Ventures is a family office, and they were looking for someone that had private equity investment experience. I joined the team at the same time that they were building out the rest of the group, and so it was just an opportunistic time to get connected with the folks there.
How did you transition into running your own fund?
When I joined Martin Ventures, most of my time was spent on the early stage healthcare technology investments. We did a handful of deals across the digital health space primarily and in companies that are focused on value-based care. Being a family office, they always have different focuses and priorities than traditional investment firms. On a day-to-day basis, you could be working on anything from analyzing airline companies to helping evaluate investment opportunities that are in other funds.
Some of the work I had been doing with the CEO around diversification strategies is ultimately where Rond Capital came about. We had identified a very specific gap in the capital markets for companies that kept falling between the cracks of venture capital and private equity. These companies tended to be established businesses that were cash flow positive with about $5 to $15 million in revenue. A lot of these businesses weren't sexy software companies or they didn't have the desire to take on tons of capital, like traditional venture capital usually demands. At the same time, they were too small for a lot of the middle market, private equity firms to be able to take a hard look at. And so we created Rond to be a platform to invest efficiently in that lower end of the market, and spun it out.
I’m excited to be able to start building out the team and getting deals into the portfolio. I've been at this for about a year and a half now, getting the platform off the ground and looking at some really interesting, great companies. I'm excited to build this company into a scalable platform that can help business owners in this lower end of the market.