How to Think about Lateral Opportunities?
Wanted to solicit opinions from this group here on how to think about potential lateral opportunities as a mid-level. Currently a junior VP at a UMM/MM where I am enjoying the experience and role. I've been here since an associate and have built a strong network. The team is lean and I should have good upwards mobility and a good bench of associates. However, fundraising has been a serious challenge without much clarity from leadership, which makes me question long-term sustainability and economics.
I've been receiving a steady stream of lateral VP opportunities from recruiters and am unsure how to consider the tradeoffs. Could be a classic case of grass is greener / fear the unknown. The basic framework I am currently contemplating is (1) Continue at current fund or (2) Lateral to a established fund with better fundraising dynamics or (3) Lateral to a newer fund to help buildout. The main factor I am concerned about is how much I would be able to diagnose any new fund's true health before I join.
Welcome any thoughts
Surprised you've seen a steady stream of new opportunities at the VP level... Can you give more color as to what type of opps you are seeing?
Pretty diverse set. Some bigger and some newer but pretty steady stream
Based in what location? NYC has seemed pretty dead for months
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agreed - what opportunities are you seeing? those could be opportunities that have been in the market for years now
Just one man's opinion but in an ideal world you'll want to go to do route 2 as you outlined. Not sure how serious the fundraising challenges are but typically the ones that get screwed over are the VPs / Directors in this situation and if you have another good seat calling your name (though as mentioned by others, not sure where you're seeing this) I'd take it.
I personally don't like route 3 at the VP level because I've seen a friends/colleagues make that jump and it seems to me that most haven't joined the next GTCR but instead some unknown MM that will provide medicore returns.Probably a easy path to director but not sure I'd want to be in a seat like that 5 years down the line.
I'd consider route 3 at the director/MD level when I can command more carry economics and actually carve out my sector / build a practice but I at the VP level you're an execution monkey and as such padding your stat is the way to go.
Are you paid market comp in your current role (both cash comp and carry)? I'd suspect not, particularly on the latter, if fundraising is challenged. You're in prime earning years, so it's important to not have vesting gaps and/or undersized grants from poor fund performance.
Cash comp is decent - average to slightly above average. Carry is strong on paper but just given the fundraising challenges, deployment is going slowly and unclear how much it will crystallize
Got it. Given that you're a junior VP, I'd vote #2. At this point in your career, deal reps are super important (sounds like may not get many at current shop). You're also at an ideal tenure to switch given you made the VP hurdle but haven't invested a ton of time at that level.
If you stay at your shop, while it's comfortable and has a chance of working out, you're taking all the risk with limited upside. If your firm doesn't fare well, they get the option value on keeping/discarding you (and unlikely comp/economics will get better in the meantime). If things work out, they may or may not reward your loyalty (probably too junior to really get much 'love' from them for sticking it out).
My opinion would be lateral down market to an up and coming fund as a partner/SVP where you have a larger piece of the pie. If fundraising is bad at your current shop then upward trajectory won't exist.
Fundraising is bad in general. Look at all the secondaries volume as LPs want liquidity. Definitely DD any new firm. Try to get perspective on them from an LP if you can.
"The main factor I am concerned about is how much I would be able to diagnose any new fund's true health before I join" - see if there are any former colleagues or classmates in LP seats that you can ping.
Mind PMing names?
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