Joining a new fund?

Definitely not an easy choice as it has its upsides but also higher risks involved - few thoughts below:

Upsides:

• Smaller teams
• Usually higher responsibility
• Promotions: if the fund is performing well, easier to get promoted through the ranks as the firm is growing
• Carry: usually handed out easier than in large firms and given small number of employees initially, chance to get a larger piece of the pie than you could get in 15 years in a MF; obviously it's a smaller cake at the beginning

Question Marks / Due Diligence Areas:

• Work-life balance / culture: totally depends on the individuals working in the fund
• Compensation: sometimes paying more than MFs to attract talent; sometimes paying substantially below UMM / MFs
• Learning opportunity: cannot learn how the firm is investing but only how the founders are investing

Key Risk Factors:

• Long-term outlook / fund performance: usually the second fund is the most difficult to raise as the first investments are not yet realized and investors tend to be in a "wait and see" mode; obviously, there is also no track record that you can base your decision on as most of the guys that raise first-time funds look decent on paper
  Interesting Case Study of how it can go is Novalpina which got liquidated after the LPs voted to oust the GP
• Fewer internal resources: IT, subscriptions, IR, operating partners, accounting, etc.
• Exit ops: tend to be worse than classical MFs