Brutal Firing Stories
I work at a buyout shop as a VP and am looking to do a GP-led. I was speaking this morning with a principal at a secondaries fund that I have known for a while about the deal and some personal stuff came up about how he was let go from his former shop. I wanted to anonymize what he told me and share cause I just felt so bad for the guy and am wondering if anyone knows if this type of stuff is common?
So basically he worked at a smaller secondaries fund as the first hire (went from AS1 up to Principal over 5 years) and helped build the firm from zero to over 1bn in AUM. The founder was a crazy person that issued promissory notes to assign carried interest instead of just assigning it. Anyway, a bonus payment was apparently delayed by 6 months and this guy got pissed and started telling the founder that he needs to honor his word and the promissory note and have the carry % (he was going to give up 10% of the pie) formally assigned to him. The guy said he would but that he was travelling for the summer and wanted to deal with it in September.
So the guy roles into the office in September and boom - fired. The founder told him to clear out his office and that he was fired as he didn't want to actually give any carry and didn't like being challenged over $$. To make matters worse, the company didn't give the guy a Record of Employment (something you legally need to do) so he couldn't claim any Unemployment Insurance...they also cut off his health benefits.
Long story short, this guy is not killing it at better fund and seems happy, but fkkk that is a dark story.
Oh, that's a tough one! It's always hard to hear about someone being treated unfairly, especially when they've put so much effort into building a company. Unfortunately, these situations can happen, especially in high-stress environments like finance. It's important to remember that every cloud has a silver lining, and it seems like this guy found his by landing a role at a better fund.
In the world of finance, it's not uncommon to come across challenging situations or difficult people. The key is to learn from these experiences and use them to grow both personally and professionally. It's also crucial to stand up for what's right, just like this guy did when he demanded his carry.
Remember, it's not about how many times you fall, but how many times you get back up. So, if you ever find yourself in a similar situation, don't let it discourage you. Use it as a stepping stone to reach greater heights. Keep swinging, champ!
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Could we stop with this bot nonsense?
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I think the bot is giving shockingly good insights
btw op it sounds like this person was a narcissist and a cheat. These are very common situations in finance and screening for them and combatting them are very important skills
Nah, he's a solid dude.
I meant the founder. The founder was obviously trying to take advantage.
Did the firm come from AlpInvest??
Nope
Unfortunately very similar happened to me. Partnered with a family office on a business and ran that business. Started operating a few of their other businesses too not as a partner. They took a uniliteral distribution from our partnered business, I pushed back and asked to be bought out. Was fired from my other roles a few days later
Wow, nothing that bad. I have seen a number of people fired a week before bonus. In an industry that is so bonus dependent, even a bottom bucket person deserves to leave with their bottom bucket bonus at the end of the year. If they were so bad, you should have fired them way ahead of bonus time.
It's a very penny-wise & pound-foolish move to fire people to save on bonus. Creates big signals to other employees & prospective employees and doesn't generally end well for the employer.
Wow, the secondaries principal got really unlucky, typically the initial carry allocation and agreement would be signed right ahead of the first capital call of a fund so that the GP can fund GP commit pro rata to carry allocation.
But yeah I guess it's a very scary reminder on how Partners/founders can easily fuck you over. Have heard stories of GP commitments bought back at cost and losing your carry allocation, being branded a bad leaver and getting no carry, or extremely long and back-weighted vesting schedules. Anyone who's more junior/not senior enough typically have very little leverage on these stuff... Guess it's important to ultimately look out for yourself
This is why working for good people is more important than good companies
This isn’t rare at all.
Founders have big ambitions of being magnanimous and a great leader and generous etc. but when all the dirty work is done and the cash is sitting in the bank, they feel like they’re the ones who added all the value and said employee is expendable.
Not sure I understand the record of employment. Did he not get paystubs?
This seems like a pretty easy lawsuit to initiate and settle, depending on the verbiage of the Promissory Note. It’s a debt- it’s presumably enforceable.
Did he sue?
He hired a lawyer and they settled after a month or so in arbitration. He ended up getting around a few hundred K in bonus payments which were already due. He gave up on the carry because his wife got sick and needed money quickly to help with the bills. So in the end the company "won" because they put him in duress by cutting off his medical coverage. Very slimey people.
This is crazy. Can you could press charges if the company used knowledge of the personal situation to force a settlement? Seems like it could violate civil rights.
This thread is legit one of the reasons I turned down being the first investment professional at a new family office. All they would agree to do is put they’d have good faith discussions about allocating carry… and refused to put a floor in. Seemed like it was gonna go just like OP
Probably not a bad idea -
our entire team was sacked on a whim cause our partner didn't have the political backing of the managing partner/founder anymore.
The firm wasn't branded as a family office but de facto operated as family office including third party capital.
Always highly problematic if "one guy is calling the shots" with no proper governance to mediate.
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