Prior Industry Experience - Does It Matter To You?

November 09, 2020

by a searcher from Kettering University (GMI) in Sioux Falls, SD, USA

I'm curious both on the Searcher and Investor side - does prior experience in an industry matter?

SEARCHERS: do you seek out opportunities in sectors where you have prior experience? Or do you rather prioritize your search based on other factors?

If other factors, what are those factors?

INVESTORS: do you care if a searcher already has intimate knowledge of the industry they're searching within? Does it impact your confidence in that search?

If so, does it impact it a lot or just a little?

Thanks!

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Reply by a searcher
from The University of North Carolina at Chapel Hill in Newport, RI, USA

Speaking as a searcher here. I think it depends on the industry. I'm a retired military officer and making a career change. So I have a very limited choice of industries where I could claim to have experience. But I do have a lot of leadership, management, and other soft skills that translates well to a broad range of applications. So I look for companies and industries where those skills will help. For instance, I have no clue about the oil and gas industry. But I have an engineering degree and have been a director of aircraft maintenance, so I feel confident in my ability to handle an HVAC company or even a manufacturing company.

Another consideration is if the company has key personnel who will remain in place. This means that I can get away with less specific experience. However, I still wouldn't want to stay too far away from an industry that I was at least familiar with.

Reply by an investor
from The University of Chicago in Chicago, IL, USA

Many if not most experienced investors (my opinion) will not back a venture where the operator is new to the industry unless he/she has a successful track record of running and growing a company in the past.

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