URGENT: buy-side offer 7 months into IB AN1, need advice
1Y at an LMM IB in NYC; got an offer to join a VC fund in SF whom I met while I had a startup. First official fund is ~45$M (raised and signed). I am 26 years old and 6 months into an IB gig after being an entrepreneur - went to target / lower tier ivy undergrad. Comp level is $250k with 1% carried interest. Also offering to pay what my AN1 bonus would be(expected range: $30-$60k) if I quit and join them right now.
I am bullish on the GP - his network / returns are fantastic, a few big wealth management firms seeding in this round and looking to get in for much bigger LP commitments in fund II, many family offices as LPs. Not super interested in private equity or moving up the ladder in IB, so thinking here is if in the next 3 years this fund goes bust, I can get an MBA and reset. Also, I don't know how much opportunity I am truly losing based on the bank I am at. Seems lateraling to an EB / BB is totally doable but PE placements are mostly LMM/MM funds in non-NYC / SF cities. In my eyes, the economics of this opportunity could go far better than anything in LMM PE/MM PE, my likely destination from this bank, given the lateral market is dead. No sourcing focus as most of the deals come from GP network.
Pros
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Comp increase (almost $100k)
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More interesting work (my pov)
Cons
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Would have to move to SF
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Decreasing my marketability
What do the lads think here? Would I be crazy to not take this opportunity? Have to respond to the fund later this week.
Take it
do it. Everyone that says "it's too risky" is a loser
Seems like one of those humble brag posts considering there are a million pros and the only con is moving to SF, which isn’t really that big a con lol.
No I swear I don't mean it to come off that way. I guess I have just been told the best way to success is the standard 2y bb / eb IB > MF PE. Also, if this fund doesn't work and there's a lot of small VC funds that don't not sure as what I would do. Part of me still feels like the right move is to wait to lateral to the BB/EB and follow the beaten path
Honestly there might not be much opportunity to lateral to BBs / EBs over the next year given they're all cutting staff right now, let alone hiring additional.
Surprised that you're at an LMM bank, and you've got a "MF or bust" attitude; you realize that MOST analysts coming from GS/MS/JPM/CITI/BARCLAYS/BOA don't make it to a MF. Also, you do realize that making 5-15 mil a year is very doable for a MM PE partner/principal once carry kicks in? And that's not enough incentive to want to do MM PE? I'm not saying you should take MM PE over your current VC opportunity -- but thinking that "If I can't make it to a MF, then why stay in banking?" might not be the best reason to abandon banking.
I’d take it if I were u, sounds way more interesting than fucking investment banking
No shade but you're at an LMM IB so it's not like you got much to lose anyway lol. Also excellent comp for such small fund.
That's my thinking bro! no shade at all to the bank but if I was at a BB/EB I think things would be slightly different but I feel like there's not much to lose haha
Saw you allude to the “beaten path” above, to which I say it makes no sense for you to follow that. If you pass this up, you’ll look back 20yrs from now and wonder what if…
tldr: You’re still young - now is the time to take risks.
Yes this is what I am thinking too - what if this GP crushes it and then raises 4-5 more funds? More than the money, it would be so interesting to be part of that journey with portfolio companies and building out the fund long term. Obviously, it's not as easy as that, but a man can dream haha
Take the offer.
The way you wrote this, it’s easy to see that’s what you want to do. You’re looking for a reason to not do it, and there really isn’t one unless you’re looking to haze zero risk in your life/career (which isn’t possible obviously). So go for it, and if it works you’re looking good and if it doesn’t you’ll be just fine as well. Good luck!
Yeah very true - thanks for the note!
Also, no sourcing in VC sounds like a dream haha - (so are you only doing diligence & execution work?) plus more comp plus carry.. cmon man the west coast isn’t that bad
haha yeah the GPs network is super built out so luckily no sourcing. Surprisingly deal flow is very high, but obviously the best deal flow is going to the a16zs of the world
Why would you stay in investment banking when you have a decent buy side offer lol. Take it and make it count man
Plz DM if you don’t want that offer I’m in SF EB and would take it tmw lol
Your comp would be 250 cash for a brand new 45M fund? Seems weird given the management fees collected on that would be super low relative to that salary. Also I just generally don’t see VC comp at the assoc level at cash being that high. The carry I get but something doesn’t add up..
I would assume it's a fund with 0% management fee allocation and the GP is footing the bill for all fund expenses (legal, staff, resources, etc.) (see this a lot in first-time funds)
Ah - would make the most sense and that didn't occur to me.
Take it and don’t look back
Once an entrepreneur, always an entrepreneur.
Take the risk.
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