PE (Buyout) Asso. vs. Well-known Crypto VC Investment Asso.

Hi guys, need some help here.

I interned at MS IBD and have been working in PE for 3 years as an Analyst.

Lately I have received 2 associate offers, PE vs. Crypto VC Investment. Both are investment roles with great senior exposure for having small/startup teams. The PE fund is a TMT buyout fund that is backed by sovereign wealth, but still relatively new. The Crypto fund is a newly raised $100m~$500m fund backed by top crypto companies (Binance, Coinbase, Huobi, etc.)

Which one should I go? 

 

From a career stability standpoint, it is the buyout fund no doubt. If you're super into crypto then I guess you'd have to factor that in.

 

The crypto fund has much higher upside in terms of:

1) profit sharing (20-40% of the return goes to the head and the asso)

2) co-investment opportunity

Crypto industry is growing and I can always just work remotely. I don't get carried interests until much later for the PE track tho.

 

Yeah, you're right about that (given those facts). I've had a few friends leave banking after becoming crypto millionaires and then do the kind of thing you're talking about. They're all doing really well but I just don't know enough about this stuff to truly opine. I think that going buyout would yield 'better' exit opps should you not like it whereas the crypto gig may preclude you from certain jobs.

I'm not arguing you go PE btw, it's whatever you wanna do.

 

Do a weighted expected value of your expected comp based on different returns for the cryptoAnd also what your options are if shit hits the fan economy wise and you can get another investing job / what's your alternative.If the upside in 1 year is enough to overcome potential downsides after getting fired etc (e.g. you can make a million dollars vs 250k at a traditional spot) then it's a no brainer. But doing probability weighted analysis should be good e.g. 2% chance you get $5M. Obviously subjective inputs.Also how likely you get cash comp ASAP? Likelihood you need to litigate / you'll get scammed or shafted on your comp by someone who doesn't think you deserve all of it? Being backed by legit companies reduces risk but doesn't eliminate it. This is an extremely important point to consider.

 

The only well-known crypto fund in Hong-Kong is Alameda Research...if that's the case I would choose it, must be fun to manipulate markets with Sam Bankman-Fried.

If you're talking about Pantera go for it too though

 
Most Helpful

Crypto. Yolo. Do something interesting with your life. PE is a fine low risk high reward job. Doing crypto is a chance to be different. It's closer to PE in the 90s. You won't be doing KKR/Nabisco equivalent in the crypto space (the crazy BTC/ETH rocketship has taken off) but it's still a poorly understood space with frequent mispricings (and even debate about price discovery). Even guys who are as far form crypto as possible like Howard Marks will tell you money is made in misunderstood securities where there is sufficient doubt to create upside for people who have informed conviction.

 

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