Underpaid at Start Up PE Fund?

Note since I cant edit, I created the fund model, streamlined the underwriting process, involved in every aspect of the deal, typical first time associate responsibilities, if I left right this second they would be scrambling hard to fill my position and get basic work done. Obviously I am not irreplaceable but it would cause problems for at least a quarter.

I'll admit ignorance the details of applying for b-school (timelines of apps, if 3 years of experience is enough, etc) but I'd start looking for a new position right away. It's one thing if you were at a new firm that hadn't raised a fund yet, but in that range they should be bringing $5-10MM in management fees alone which should be more than enough to adequately pay staff, fund travel, etc. Office space can be embarrassing but as long as it's not a warehouse, money can be spent better elsewhere, like paying employees and if they guy rented office space pre-raise, he may not have been sure how long he would have to carry that cost on his own dime and LP's sometimes like to see that you're not blowing money on over the top space.

Sounds like a pretty shit place to work though and unless you get a large bonus soon, leave.

Embarrassing might be the wrong use for office space, just sparse. Its a bit of an overexaggeration because I'm used to living in a big city w/ BB quality offices and now I'm starving at 9 pm because dinner isnt easily accessible and I dont get comped dinner.

Their claim to have spent ~$10mm on placement agent fees, which might explain the utilitarian accommodations...

Lets say bonus is 2-3 months, would you wait it out? Or start looking immediately? I just feel I'm so close that whatever they toss at me I'll take and leave.

Why would you agree to take this job in the first place? A base of 70-80k without any idea of bonuses seems very strange for someone who finished their 2 years in banking at a BB

Getting a job in PE isnt as easy as you think it is, even in if youre coming from a BB. It was a middle tier BB in a middle tier group. I had a handful of final rounds, got unlucky, my current fund promised some sort of carry at the time, I just wanted to be done with the process and enjoy myself after two soul sucking years.

Damn, the guy doesn't even comp his employees dinner when they work late. Sounds like hell, slave hours, shit pay and no work/life balance.

I can't give much advice but I can say that I relate to your situation. My Managing Partners are probably equivalent (or even wealthier than yours) and yet they're not even paying street.

My take would simply be to look to getting exposure with the best available opportunity. If I had a better opportunity, I would probably explore it further. But it has to be a principal-investing position because that's something I'm pretty certain I want to be doing. Like you said, many underestimate the hurdles and difficulty to get into PE.

For the most part, we can't be picky. You clearly have two possible paths set up for yourself that I concur with. Personally I would take the former - to look elsewhere. You sound miserable and I can relate how it feels to contribute substantially and not get compensated for it. Not many people have the aptitude to endure that whilst putting out top level work (not saying you can't).

PEUnderpaid:

The fund closed a rather large first time fund, lets say the range is $300-$500. I am massively underpaid compared to my former colleauges, to the point where it's embarrassing (think 70k-80k base with no insight on what bonus is, if its even coming).

Who cares how much your "former colleagues" make? Your value isn't relative to others but worth what you bring to the table and the specific situation the firm is in.

- The founding partner is loaded, I'm talking multiple $5+mm homes, private jet, etc.

Loaded from his previous employment or from the current fund? Sounds like it's money from before.

- The rest of the fund staff and the space where we work is embarrassingly cheap. There are zero benefits, I dont get comped for dinner, only the VPs go on diligence trips because they wont send the Associate and VP due to cost reasons.

This could very well be the case. If you just closed the fund then costs could still be an issue until it actually starts cash flowing.

- I have zero insight on what my bonus is or if its even coming, my one year anniversary is approaching quickly

This is your fault entirely. How do you not get your pay in writing when you get hired? Didn't you think it would be an important thing to do at a brand new fund? Get it in writing.

- I have brought up the discussion of higher pay 1 time with the main partner, he said he would talk to the broader team about it and havent heard anything since

What does "I have brought it up" mean? You mean you sat him down and asked for a raise? Or you asked some general question about compensation that he viewed as tangential to his more important obligation and subsequently forgot about it? Sounds like a miscommunication, not a dismissal of the subject.

- The fund is in a location I do not wish to be in long term

This is your problem, not theirs.

- I work extensively with one Principal who is a complete idiot, he's great at sourcing opportunities but is awful at the underwriting process. I abhor working with him as I literally feel dumber after reading his mark-ups.

It's fundamentally bad practice to say this kind of thing about superiors, even if it's true. It's also irrelevant to the topic at hand. The partners clearly value him as an employee or he wouldn't be there. Complaining about him will only damage your reputation at the firm.

I have learned a ton throughout the year, and I enjoy the PE process and critical thinking involved vs banking, however it is tough to be paid so little when you were pulling $150k in banking, and if I stayed it would have been at least $190k this year. I am thinking of either A) looking for a PE or principal investing position elsewhere, or B) Sucking it up and start applying for an MBA, knowing that I will not receive any recs at my current fund as the minute they know I'm leaving I'll be shown the door.

Any thoughts would be greatly appreciated, thanks guys.

You come off in this post as a passive-aggressive, entitled whiner who hasn't even bothered to assert your needs, instead complaining that they don't automatically know what your needs are and meet them. You've clearly completely failed to communicate any semblance of your unease to your firm, yet still expect them to fix the situation. Maybe you should actually engage with your firm in a more productive way, not only by being more assertive about what would make you happy there, but also by recognizing the positive traits of your coworkers and appreciating them more.

You should also appreciate your situation more; you are at a start up fund, which can offer all kinds of upside in more ways than compensation. And just because you haven't started with incredible compensation out of the chute, doesn't mean that you won't get any of that upside in your bank account. It's your fault, though, for not clarifying and getting your compensation package in writing. Why on earth wouldn't you? Instead of asking for a raise maybe you should first start by asking for that, which can lead into the topic of improving compensation once you have your current scheme in writing.

Or of course you could just leave the firm for another firm or b-school, where the problem will likely continue to follow you as you're mostly the problem and not them.

Start-up funds, groups, companies, ANYTHING, are designed to underpay against the market; you're forgoing a big comfy job for small pay and a lot of potential upside. Hell, my current position at my start-up/growth stage company is underpaid significantly (well, can't beat the stock options ;) ). But I'm here... hoping that once we hit it big, I'll be well comped for a long time, with a cushy office, and having the execs writing my golden ticket.

Note since I cant edit, I created the fund model, streamlined the underwriting process, involved in every aspect of the deal, typical first time associate responsibilities, if I left right this second they would be scrambling hard to fill my position and get basic work done. Obviously I am not irreplaceable but it would cause problems for at least a quarter.

Look at how much experience you've been exposed to, that's awesome stuff. I'd be grateful with the exposure that the partners are giving you. When the fund hits it big, trust me, they won't be forgetting about you...

It doesn't sound like you're a huge risk taker or enjoy "start-up" work, if you're not happy with this potential upside fund, then move somewhere else.

The founding partner is loaded, I'm talking multiple $5+mm homes, private jet, etc.

So is my CEO, he's 60, not 30, model yourself after his historical work ethic, not his current net worth.

Thanks guys for the comments.

And to address Khayembii's points:

• My former colleagues are paid market for PE associates, thus its at least a comparable. You seriously can't tell me with a straight face that an ex-BB analyst working in PE "brings to the table" something another ex-2 year BB analyst doesnt. All of us, including you, are cost centers, we dont bring jack shit to the table in terms of revenue, but that doesn preclude us from getting paid market.

• How is it my fault I didn't get an exact number in writing? This is for a PE associate position, not one of my colleagues got their bonus number in writing, everyone got the same line of "discretionary bonus".

• I brought it up means I sat down with him and discussed a potential bump to reach market, and provided comps.

• RE location, obviously its not their problem. I'm stating that its in a location I don't want to be in, so take that into account when giving advice on whether to stick it out a bit longer or explore other options.

• Where did I say I complained about my Principal at work? Give me a break, I wouldnt have gotten this gig if I didnt know how to play the politics game in banking.

Looking through your prior posts, its pretty clear that you don't get how the IBD to PE works. Heres a hint, nobody negotiates for an entry level associate position, everybody is shit tired after 2 years of getting curbstomped, some of us weren't fortunate and landed less than desirable gigs given 90% of people look the same on paper. I'm simply here to ask for advice on how to proceed in my situation. I do agree that I'm whining a bit, but cut the shit with the personal attacks "Or of course you could just leave the firm for another firm or b-school, where the problem will likely continue to follow you as you're mostly the problem and not them.", when you work at a fundless sponsor. Thanks.

1. Do any of your colleagues work at a start up? Because, again, their situation isn't comparable to yours. There are so many variables it doesn't make sense to compare to others.

2. I meant get your bonus structure in writing, not an exact number. If they're coming out of a pool, have that in writing. Did anyone else get bonuses?

3. How about following up with him then? Seems like it'd be reasonable if you don't hear about it after a week.

4. I never said you complained at work. You complained here. You don't really need to actually complain at work for people to get a sense of how you're feeling, though.

Sorry I came off as an ass but I think you're more responsible for the situation than you want to admit. Also, and this is unrelated, but I don't work at a fundless sponsor.

I may be biased because I'm in the same situation as OP, but how the hell is anything his fault? We look for the PE job desperately and once we get it, you think we're going to sit and make demands that will ding us? These people make promises, and we assume that since we're qualified, they will pay market rate. Any good leader would forego private jets in order to pay employees fairly. It's a startup PE firm, but they're clearly not strapped for cash. Rather, it's the big egos on top that want to swim in the dough whilst the monkeys are underpaid, not realising that it's thanks to those monkeys they are able to fly those jets.

I think it's criminal.

OP, I'm in the same situation as you and as the only analyst (from Europe) in a country full of people with shit work ethic, 10 page quadruple space - resume college students and no technical skills whatsoever, I know they'll be fucked if I leave. Yet, the main partner chooses to screw me, whilst the other partners are worried that i'll leave. Be grateful that your boss doesn't treat you like his PA, and makes you drive his wife to the doctor, sit in the fucking waiting room and drive her home on a Monday morning to afternoon. Inflated egos are a bitch to work for.

My plan is to make them even more dependent on me, liquidate and gtfo. Not that I would do this, but I have a lot of dirt on said partner, so if good (deserved) recommendations are not given (job or MBA, I'm also pursuing one or the other), someone's getting divorced.

Monkeys, when we grow up to be the top dogs, let's treat our people well !

Did you know your salary at the time you signed the contract? if yes, not their fault. Did they say bonus will be street? If not, not their fault.