Before Launch Series: Part 4

Team: Building a strong internship program to support your search

May 09, 2023

In the previous parts of our Before Launch Series, we've discussed various aspects of preparing for a successful launch of your search fund.

In part 1 of the Before Launch Series, I shared some of the administrative tasks associated with starting up your search fund, from selecting your tech stack to networking with 3rd party providers and others in the search community. In part 2, we discussed the basics of search fund branding, from creating your brand identity to developing a website and marketing materials with consistent messaging. In part 3, I walked through actionable steps to build out your operations for the search process in a low-risk environment, regardless of your strategy or fund structure.

Today, I will delve into an important component of your search process: building a strong internship program to support your efforts. Interns can be invaluable assets to your team, providing fresh perspectives, enthusiasm, and a helping hand in the numerous tasks that arise during the search, especially for those working without a partner. Regarding the team, we will cover the following topics:

Team composition
Recruiting interns
Managing intern workload
Delegating tasks
Empowering the team with educational content
Mentorship

These activities will naturally roll into the core activities of your search, so I tried to make it as comprehensive as possible. While there are some things that I am sure I missed, I hope you find this helpful in designing your own team and internship program.

If you have not already, I encourage you to check out the previous posts in the Before Launch Series to get fully up to speed. More information can be found below:

Composition

When constructing your internship program, there are multiple factors that influence how your team will be structured, how you interact with them (and for how long), and what tasks they should be working on.

The common approach for traditional searchers seems to be having a small army of undergraduate interns on a seasonal basis with the help of an MBA intern overseeing their sourcing activities and assisting with industry research. That said, I’ve heard of some who hired an overseas virtual assistant (VA) and a few buddies from business school to tackle the outreach process and another search who had upwards of 15 undergraduate interns (don’t ask me what they were doing). I recommend structuring your team to match your personal style, search thesis, and sourcing strategy rather than attempting to replicate someone else’s internship program.

Org Structure

In part 3 of the Before Launch Series, I reviewed building a sales funnel and my approach to systematic personalization in the outreach process. In order to execute such a sourcing strategy that requires manual data entry and verification, I’ve built my team accordingly. I find that I work best overseeing undergraduate interns directly, with usually about four to five working part-time at any given point in time. An intern’s core responsibilities are sourcing-related, so I prefer to partner with them to ensure they’re getting the support they need and that data quality is maintained. Delegating those activities to an MBA may be challenging unless the searcher has found a trusted partner who is actively pursuing the path of ETA themselves.

Duration

My experience with undergraduate interns has taught me that programs should be no shorter than eight weeks to allow for an extended period of productivity but no longer than three months. Given the repetitive nature of sourcing-related activities and competing priorities with school and extracurriculars, undergraduate interns struggle to stay engaged for a long period of time, especially in a remote-working environment.

Virtual Assistants

While I don’t personally use one for administrative and sourcing purposes, some searchers find them to be incredibly useful. If you’re interested in a VA, I’d highly recommend you find searchers who are effectively using them to pick their brains on best practices. Most seem to hire one through UpWork or Fiverr and use an extensive interviewing process to ensure the VA is suited to do the task quickly and effectively. Here are a few thoughts on hiring a VA:

Skills and experience: Check the candidate's profile to ensure they have the necessary skills and experience for the tasks you require. Look for relevant work experience, educational background, and proficiency in English.
Reviews and ratings: Review the virtual assistant's feedback and ratings from previous clients. This can give you an idea of their work quality, reliability, and communication skills.

Availability: Make sure the candidate's availability matches your needs. If you need someone who is available during specific hours, it's important to find a virtual assistant who can accommodate your schedule.
Communication: Strong communication skills are essential when working with a virtual assistant. Ensure that they are able to communicate effectively in the language you require and that they are responsive to your messages.
Payment and fees: Understand the payment and fee structure before hiring a virtual assistant. Some may charge hourly rates, while others may have a flat fee for specific tasks.
Time zones: Keep in mind the time zone difference if you are working with an international virtual assistant. Make sure you are both clear about the working hours and any deadlines.
Contract and agreements: Ensure you have a clear contract or agreement outlining the scope of work, payment terms, confidentiality clauses, and termination clauses. This can help avoid any misunderstandings or conflicts down the line.

Recruiting

The foundation of a successful undergraduate internship program is recruiting the right talent. In this section, we will discuss various strategies for finding and selecting the best candidates to join your team, as well as factors to consider when recruiting interns and setting them up for success.

Utilizing Handshake

Handshake is a popular platform for connecting with potential interns. To get started on the platform, you'll need to create an employer account, post the job, and invite specific schools to view your posting. This enables you to connect with a wide range of candidates from diverse academic backgrounds and ensures that your opportunities reach the right audience.

Educational partnerships

Some schools offer internship partnerships, allowing students to gain real-world experience and receive course credit upon completion. While your alma mater may make the most sense, reach out to other institutions to explore potential collaborations. This not only expands your talent pool but also strengthens your connections with those academic institutions.

Timely recruitment

Aim to recruit interns at least 4-6 weeks in advance to ensure that you have adequate time to review applications, conduct interviews, and finalize your team structure. By starting the process early, you can avoid last-minute hiccups and ensure a smooth transition for your new interns. The last thing you want is to have a large gap in your sourcing activities, even if you are under LOI on a deal.

Selecting candidates

When evaluating candidates, look for those with an interest in investment banking, consulting, or private equity. Previous search fund experience is a plus, but be sure to perform reference checks to avoid any potential pitfalls. Ideal candidates should exhibit a willingness to learn, a positive attitude, and teamwork abilities. Note that a high GPA and a prestigious school do not necessarily guarantee a successful intern – consider extracurricular activities as a sign of time management skills and work ethic.

Interview process and grading criteria

Develop a set of interview questions and grading criteria to help evaluate candidates consistently. Some searchers use case studies as part of the interview process to assess problem-solving and analytical skills, and I did at one point as well. However, I found there to be no change in performance whether or not an intern completed the case study well. There’s a significant time investment required in reviewing case studies, so it will take away from time you could be leveraging elsewhere in a more productive manner. It’s quite difficult to determine whether an undergraduate student will become a high-performing intern given their lack of experience, so I focus the questions more on cultural fit, knowledge of the company, and what we’re looking to achieve.

Preparing essential documents and communication

Before bringing interns on board, ensure that you have all necessary documents in place, including a Non-Disclosure Agreement (NDA), intern agreement, and offer letter with clear expectations regarding working arrangements. Providing these documents upfront establishes a professional tone and helps set the stage for a successful working relationship. You can find examples of these documents through your attorney, fellow searchers, investors, and the Stanford Search Fund Primer.

Onboarding and training

Once you've selected your interns and they’ve accepted the position, invest time in their onboarding and training. Provide them with a clear understanding of your sourcing strategy, search thesis, and company culture. This will help your interns become productive and engaged team members more quickly, and it will set the tone for your culture from day 1. I would consider creating Loom videos on the company drive that interns can watch (and rewatch) at their own leisure.

Ongoing support and mentorship

To ensure the success of your internship program, provide regular feedback and guidance to your interns. Foster an open and supportive environment where they feel comfortable asking questions and seeking help. This not only improves their performance but also aids in their professional growth.

By following these guidelines and tailoring your recruitment process to your specific needs, you'll be better equipped to build a team of interns that can effectively support your search thesis and sourcing strategy. Remember, the key to a successful internship program lies in selecting candidates who share your vision and can contribute meaningfully to your search efforts, but only if you provide them with the foundation to succeed.

Managing Intern Workload

Finding the right balance when assigning tasks to your interns is crucial for maintaining productivity. Distributing work evenly, especially in sourcing, can lead to higher-quality output and a more engaged team. However, it's essential to manage and motivate interns effectively, and that can be done through the work you delegate to interns, how you distribute work across the team, and understanding their incentives.

Maintaining engagement

Keep in mind that a significant portion of undergraduate interns' responsibilities will involve sourcing. Due to its repetitive nature, it's essential to maintain engagement through educational content, mentorship, research, and clear expectations. Distributing tasks among multiple interns can help prevent boredom and a lack of engagement, but offering certain research projects and mock presentations can do the same. That’s where the number of four to five undergraduate interns appears to strike the right balance for me.

Consider interns' lives

Be mindful of the challenges interns face as undergraduate students at academically rigorous universities. They have academic, extracurricular, and recruiting responsibilities, which differ significantly from those of full-time employees. And their incentives to perform are slightly different. Many seek experiences with search funds to demonstrate their interest in finance for future investment banking internships. Aligning tasks with those goals can boost motivation and commitment, although at times a bit of a challenge. I look to give interns ultimate flexibility on how they get their work done because of their other priorities, just as long as it gets completed by certain deadlines.

Providing context and resources

Interns often have little experience, so they may not know what "good" looks like in their tasks. Invest time in educating them and providing resources to help them succeed. Setting clear expectations and offering feedback will enhance their performance and development. Asking an intern to simply “do research” or “find companies” isn’t going to cut it, especially with the programs being relatively short.

Regular check-ins and communication

Maintain open communication channels with your interns and hold regular check-ins to discuss their progress, address any concerns, and provide guidance. This approach fosters a supportive environment and helps interns feel valued and connected. It took some time to figure out my own operating rhythm early on, but I found that open communication lines on Slack with two check-ins weekly work to ensure everyone is on the same page.

Delegating

Effective delegation is another vital aspect of managing an internship program during the search phase. A searcher cannot do it all, but in order to achieve their goal of buying one great business, they cannot expect to pass off all responsibility to others and still succeed either. So what should searchers delegate to interns, and what should they do themselves?

Areas to delegate tasks

There are specific areas where interns can provide valuable support and contribute to the search process. These tasks can be delegated to interns with proper guidance and oversight:

Sourcing: Interns can take on the responsibility of identifying potential target companies and conducting initial research.
Industry research: Task interns with gathering information on various industries to inform your search thesis and guide your sourcing efforts.
Call preparation: Interns can help prepare materials and background information for calls with business owners and brokers.
Brokered outreach: Leverage interns to contact brokers, establish relationships and gather information on potential opportunities.

With these areas to delegate, it is important to set as much context as possible and establish clarity on what the ask is beforehand. Whatever you can do to provide them with the processes they should follow to get things correctly will pay dividends, so you can spend more time coaching and developing interns rather than fielding basic questions. Go through the process of how you want to conduct industry research, sourcing, call preparation, and brokered outreach, and be sure to take notes on your processes. From there, document them in a way that a first-year college student might understand and roll them out.

Where to maintain control

On the other hand, there are certain tasks that require the searcher's direct involvement to ensure quality, confidentiality, and alignment with the search's goals:

Investor and owner communication: Maintain direct communication with investors and business owners to foster trust and build strong relationships. It’s pretty obvious that you wouldn’t want a first-year student talking to a boomer owner about selling their business or giving investors your quarterly update. Use common sense here.
Data upload into outreach systems: To maintain data accuracy and integrity, handle the uploading of information into your outreach system. Once interns have sourced companies for you and have verified all relevant information, the searcher should be responsible for final quality checks before uploading into their email sequencing tool of choice.
Industry selection: Searchers can utilize interns for industry ideation but should never let them move forward without approval. I use an industry scorecard that will help validate any ideas we put through in our process prior to diving deep into research. The last thing you want is for your intern group to spend two weeks diving into crypto and NFTs.
Modeling and quantitative analysis: Unless an intern has demonstrated the necessary skills, handle financial modeling and other quantitative analyses personally to ensure accuracy and strategic alignment in the qualifying phase and later in due diligence.

Outside of the obvious ones that searchers should control for their reputation, the tasks above that should be managed by the searcher are to steer the ship in the right direction while preventing the team from focusing on value-destroying activities. Be methodical about how you’re spending your time – avoid mistakes and having to rework tasks but also activities that may lead you down the path of fishing in the wrong pond, something we must avoid as much as humanly possible.

Allocating work to others

It’s not just about what you delegate to others but how you do it. Here are a few quick thoughts to consider:

Skillset and experience: Match tasks to the intern's background, interests, and capabilities to ensure they can contribute effectively and gain valuable experience. Freshmen interns are vastly different from those in their junior and senior years, and you may need to design your program differently depending on the make-up of your intern team.
Clarity and expectations: Clearly define the scope of each task, set deadlines, and establish performance expectations to guide interns in their work. Vague objectives and deadlines will result in the wrong work getting completed or not at all.
Feedback and support: Provide regular feedback and support to help interns develop their skills and contribute more effectively to the search process. Ask for feedback from the interns to determine how you can improve your management skills.
Trust and autonomy: Encourage a sense of ownership and trust by giving interns the autonomy to work independently while maintaining open communication channels for guidance and support.

Educational Content

Interns often have limited experience, so it's essential to provide clear, easy-to-understand instructions and resources that they can use repeatedly. Err on the side of caution and provide as much basic material as possible to get interns up and running while shifting towards activities that challenge them later in the internship.

Onboarding

Ensure a smooth onboarding process by acquainting interns with your firm's expectations, culture, and business model. A comprehensive introduction sets the stage for a productive working relationship. Are interns set up on all tools and systems you use for the search? Do they know where to find things and what they should expect to be doing over the course of the internship?

Reference guides and sourcing tutorials

Guides that detail your preferred industry research and sourcing methods and strategies will pay dividends throughout your search. Demonstrating your approach directly can help interns understand and follow your desired process. Live sessions may be helpful but consider using PDFs and Loom videos to allow for easy playbacks at a later date. When new interns join, you won’t have to review the same topics once again.

Repository of self-service resources

Speaking of self-service, you may find it beneficial to provide further educational materials for interns to learn more about finance and investing. There’s a separate file on our drive that shares educational materials such as readings, podcasts, and books to encourage further learning into areas of interest for interns.

By providing comprehensive onboarding and training materials along with self-service educational content, you not only engrain a culture of learning in your firm but also lay the foundation for what your leadership style might look like when running the acquired business.

Mentorship

Finally, we must talk about mentorship. What does it mean in the first place? While it is generally viewed as someone more experienced helping out someone less experienced in a particular professional or educational setting, mentorship can take place in many different forms for different people. In the search fund context, I view it as a way to help young people build meaningful relationships and careers in their lives by sharing my unique understanding of the world. Here are ways that you might mentor your undergraduate interns:

One-on-one time: Dedicate time for individual meetings with your interns, as it allows for personalized guidance, feedback, and relationship building. These sessions can help interns feel supported and valued. I do these every three weeks or so with my group.
Career development support: Offer guidance on important finance and private equity concepts, as well as insights into potential career paths. Help your interns develop a clear understanding of their professional goals and the steps required to achieve them.
Emphasize professionalism: Teach your interns the importance of professionalism in the workplace, including punctuality, dress code, and appropriate communication. This will not only benefit their performance during the internship but also prepare them for future professional opportunities.
Personalized feedback: Provide interns with constructive, personalized feedback on their work and progress. Highlight areas of improvement and celebrate their accomplishments, fostering a growth mindset.
Networking support: Assist your interns in expanding their professional network by making introductions, providing references, and offering guidance on networking best practices.

By focusing on mentorship with your interns, you create a mutually beneficial experience for both yourself and the interns. This approach leads to a more successful internship program, ultimately contributing to the success of your search. Many people have helped you get to where you are today, and giving back to those a few years younger than you is the least you can do.

In conclusion, a well-designed internship program can be a powerful asset in your search. I’ve heard anecdotes that a well-structured internship program with talented individuals to support your efforts is one of the key indicators of success for acquisition entrepreneurs. Remember to be mindful of your interns' workload, delegate tasks appropriately, and prioritize mentorship and education to make the most of your internship program.

If you found the post to be helpful, I ask that you share it with someone who is getting ready to launch their search and encourage them to sign up for a premium subscription.

This wraps up the Before Launch Series, now it’s time to get out there and start searching! You can only do so much prep anyways, so I hope you found these tools helpful in accelerating your progress early on.