Stay in PE or join family business?
Hey all - For some background, I am a 3rd year ASO in MM PE and recently received an offer (or rather persuasive ask) to join my uncle’s business (essentially a 2nd father to me).
I have grown very tired of my role in PE and was initially looking to exit into a Strategy/Corp Dev role before I was approached with this opportunity.
Big picture - My uncle founded the business 20 years ago, which now has 6 FTE and recorded $8M revenue / $2m EBITDA last year. The business has a lot of potential but my uncle has stretched himself super thin across several different ventures and will require a good bit of professionalization. His offer is as follows:
I receive a base salary + commission + 33.3% equity in the business (with an opportunity to grow)
Him and I will co-create an offer letter very specifically outlining my title, role, and responsibilities. I will likely be balancing many different hats with Sales & Marketing accounting for the biggest bucket. There is work to be done across finance, hiring, operating (e.g., implementing software), etc.
My ultimate end goal has always been to be an entrepreneur, so I was initially looking into either starting my own business purchasing a business via an SBA (built relationships with several brokers), but this feels like a unique opportunity to build meaningful operational skills, gain equity in a business, and help increase the wealth of my family all under one umbrella.
I recognize this is fully, 100% up to my discernment but wanted to collect opinions (especially if done by someone). Open to all thoughts, comments, questions, etc.
Thank you all incredibly much.
This is an obvious yes and doesn’t even need an explanation
The answer to this question that pops up on here all the time is…for the love of god yes…stay in the family business!!!
Every day I wish my family could offer me just a fraction of the opportunities some of the posters here have.
it's always hilarious when people come on here weighing a once in a lifetime opportunity versus being a literal excel/ppt monkey
Hey man, OP here. I fully, 100% agree with you. Realistically, my mind has been made up for months at this point. Mostly using WSO as an echo chamber + curious if anyone knows of or has experienced a similar transition.
I had the equivalent to an epiphany a few months ago as my MD was REAMING me out on a holiday over something completely innocuous and I thought to myself “why on earth am I doing this job when I have the opportunity of a lifetime in front of me”.
Self-reflecting, I have been incredibly stubborn and prideful throughout my life about my career. I grew up very well with immigrant parents who built their lives from the ground zero and always felt the need to forge my own path vs “relying” on my family.
I always felt like I’d be looked at as someone who couldn’t make it on their own or “needed” their family to succeed in business. Looking back on my life…boy what a MORON I have been for 1) caring about what others think and 2) delaying an incredible opportunity out of pride. It’s been a character flaw of mine for a long time and I am only now coming to head with it.
Thankfully I am still young enough (mid-20s) where I can take full advantage. Thank you for hearing me out, hope this provides some additional perspective.
This is literally me. However I still feel the need to prove myself
I would recommend moving into the family business. The real question is how much longer do you want to stay in PE and if it will be beneficial for the family business if you stay a few more years to get any relevant experience or networking done before you pivot. Is it possible to work part time with your uncle or is that going to conflict with your current PE role?
Appreciate the thoughtful answer/questions!
My work schedule is far too demanding to make any meaningful contributions to the business at this time. While I could certainly pull together a few hours/week, I would be sacrificing effort/effectiveness one way or the other.
While staying in PE for a bit longer may be beneficial if I get my hands on legitimate portfolio company work, my firm is vertically focused and does not work a sector remotely close to my family’s business.
What advice are you looking for?
You hate your PE job and are looking to move into corp dev and then eventually start your own biz.
And now your second father has given you a chance to own your own biz lol. What’s the issue? Or is this another humble brag post?
I’ve always appreciated your posts on here Smoke Frog (blunt and otherwise!).
This is not a humble brag in the slightest (though I recognize how it might be interpreted that way). I am certainly overcomplicating things - just a weird feeling as every chess piece I’ve moved over the last 7-8 years was targeting/intentional to break into and succeed in PE, before starting my own business down the road. Though I’ve hated it as of late, it feels “big” making a big career change like this, especially given I didn’t give it much thought until recently. But as stated above, it will 100% be for the best once I (almost a near certainty now) make the pivot.
Moreso using WSO as a sounding board and looking for people who have made a similar transition (or at least know of someone who has).
Appreciate your thoughts/input as always my man.
Jeez. I always hate rationale and thoughtful responses back when I’m in a flaming mood. You made me feel like a real douche.
Look, it can very tough stepping off the golden path (dune reference!) of IB to PE/HF. That being said, it’s not always a death knell or a sign you’re weak and quitting.
Think about the following. Is your family going to depend on you for money in the future? Have any high interest debt? Any losers in your family that will depend on you financially?
Basically, do you have the financial freedom to take a risk? Because joining a small company always brings about the risk of ruin.
However, based on your post, it appears as if the starts are aligning. You want to leave PE for a stepping stone job that will lead to entrepreneurship. And now your uncle is offering you that chance.
On top of that, he seems very willing to structure you a compensation package that is very fair. And he is someone who is like a father to you, so chances of getting screwed are close to zero.
There is always the risk you go bankrupt or the working relationship destroys the familial relationship, but I think this is too unique an opportunity to pass up.
And even if this venture fails, it’s not like you quit PE and lived on a beach for two years cause you couldn’t handle the pressure. You started a new business and gained operating experience. I’m sure you could break back into PE if needed.
Fortune favors the bold. Nothing ventured, nothing gained. There’s nothing like being your own boss. All that jazz, just go for it. With no wife and no kids, it’s the best time to take a shot.
Ipsum quam nulla sed nihil alias corrupti labore. Rerum quae sint maiores aut quod cupiditate impedit.
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