Starting a Fund vs. Starting a Company

What are some pros and cons of each and why? And as the self-deprecating PE associates I know we all are, I’m hoping this thread stays away from siding vehemently on the side of the latter, or acting like starting a company is obviously a much better option. Because let’s be real, it involves a lot of heartbreak and (potentially total) failure. Would appreciate some thoughts.

5 Comments
 

Fund economics require significant AUM especially for a first time fund / strategy regardless of strategy. Therefore, without a track record or significant connections on the LP side, starting a fund is incredibly difficult. Most people who launch funds do so as part of an established firm using their seed capital and brand name to help fundraising. Businesses can be started and successful without any track record or network (wouldn't hurt though) although the upside is less likely to materialise.

The way I see it is if you have the proper prerequisites to launch a fund already, this is better risk adjusted way to earn material upside. Otherwise, starting a business and being entrepreneurial is a better option.

 
Most Helpful

The biggest pro for a company is time/barriers to launch. As a PE Associate, you'll likely be considered a "top bucket" founder. Had a friend leave a MM PE firm to start a company in one of the verticals he covered, and he raised $5M in seed funding from good VCs without breaking a sweat whatsoever (caveat that this was back in 2022, so certainly easier days).

To raise a fund you at least need to get to Principal level, but the most successful first-time funds (in fundraising at least) had a founder with multiple successful exits of deals they led as a Partner... so that puts you in age 40+ territory, and you need years of being good at your job to get there. 

After the startup phase, you probably side with the fund entrepreneurs. A lot more funded companies fail than funds that successfully raise a Fund I do (although that certainly still happens). The tradeoff is the company side is almost certainly higher-upside, unless you're the next Henry Kravis. 

 

Operational drag kills most funds before they even trade. You’re a financial institution on day one - compliance, LPs, and onboarding will stall you for months. We wasted weeks on simple corporate paperwork and regulatory checks, even getting stuck on basics like the mandatory LEI code, which we eventually just fast-tracked through LEI Register to bypass the usual bureaucratic slow-walk.

If you love asset management and fundraising, build a fund. If you want a tangible product, build a company. Both will ruin your sleep schedule.
 

 

Accusantium et vel id reiciendis iure. Molestiae est ex occaecati.

Eum provident aut et. Placeat veniam incidunt placeat aut amet magnam dignissimos quae. Rerum sunt reprehenderit sapiente tempore.

Deleniti incidunt eveniet saepe sint incidunt architecto blanditiis. Repudiandae at officia quas qui iste. Hic unde voluptatem eum ut. Quia officiis magni voluptatem eligendi. Nostrum quam voluptas autem placeat autem officiis ut.

Quaerat qui labore voluptatem qui et deserunt. Aut et neque doloremque voluptatem illo dolorum. Distinctio optio impedit vitae eos rem vel commodi. Alias quis tempora rerum harum vel commodi at. Sapiente aut beatae ullam tempora. Illum saepe libero quis voluptas ut.

Career Advancement Opportunities

July 2026 Investment Banking

  • Evercore 01 99.4%
  • Moelis & Company 01 98.9%
  • JPMorgan 01 98.3%
  • Guggenheim Partners 01 97.7%
  • Morgan Stanley 07 97.1%

Overall Employee Satisfaction

July 2026 Investment Banking

  • Moelis & Company No 99.4%
  • Evercore No 98.9%
  • Morgan Stanley 01 98.3%
  • BMO Capital Markets 12 97.7%
  • Banco Santander 01 97.1%

Professional Growth Opportunities

July 2026 Investment Banking

  • Evercore 01 99.4%
  • Moelis & Company 01 98.9%
  • Morgan Stanley 06 98.3%
  • Goldman Sachs 01 97.7%
  • JPMorgan 01 97.1%

Total Avg Compensation

July 2026 Investment Banking

  • Vice President (15) $434
  • Associates (46) $258
  • 3rd+ Year Analyst (8) $210
  • 2nd Year Analyst (22) $179
  • Intern/Summer Associate (13) $156
  • 1st Year Analyst (79) $150
  • Intern/Summer Analyst (73) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
BankonBanking's picture
BankonBanking
99.0
4
kanon's picture
kanon
99.0
5
GameTheory's picture
GameTheory
98.9
6
DrApeman's picture
DrApeman
98.9
7
dosk17's picture
dosk17
98.9
8
Betsy Massar's picture
Betsy Massar
98.9
9
CompBanker's picture
CompBanker
98.9
10
Jamoldo's picture
Jamoldo
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”