First analyst at a start up PE firm - Help
Hi all, so I recently joined as the first analyst at a truly start up (I'm the fourth person) PE firm. We do LBOs of companies around 10-25m dollars and we do somewhere around 8-10 deals a year.
I'm not making much money at all especially for working 12 hour days. I assumed I'd take a pay cut (substantial like half what my market rate would be) with the opportunity to be in early so I can grow with the firm. I'm starting to question this theory and I'm looking for other thoughts on the topic.
Whats my actual upside in a start up PE firm? Should I stay even though I'm not getting paid shit for the hours I'm working?
Thanks all.
Are you investing $10-25MM in equity or LBOing firms with that level EV? Are the guys that started the fund well connected? Like previously in MF or can get institutional investors?
If the senior guys don't know anyone, you won't have the money to do that many deals. If you're trying to invest 10-25 in each deal, you won't be doing many deals.
Unless these guys are big time rainmakers, you aren't going to be investing 100-200M per year. Even if the 10-25 is the EV, it's still not likely unless these guys are really awesome.
8-10 deals a year, for a startup PE shop, is a ton. I interned for a relatively new shop that had 4 partners who had all done well previously. We invested in mineral interests, RE debt, tech, a few other companies. In the best year, we saw 5 deals get done.
I hope that you guys get the deals done, but it's a little unrealistic.
Interested. What verticals and what city is the firm located in?
8-10 deals a year is impossible for a legit PE shop with that lean of a team. do you guys have a dedicated fund or do you raise capital on a per deal basis?
We started last year and have already made 6 deals, granted thats year one with half the team being there half the year. The industry we are in and the way we structure deals allows us to quickly snatch up deals because we know exactly what we are looking for. Pretty straight forward.
So regardless if you believe me or not I just want to know what you think my opportunity to make big gains later in the companies life is.
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