Joining a new fund - Risk, reward, and comp?

On the WLB point, I've seen it both ways but generally speaking, if you are going to be asking for carry pre-VP you should be prepared to grind for at least a period of time if they are willing to give it.

Another comment above referenced this, but I've had to be heavily involved in workstreams that investment professionals at larger firms have never touched: quarterly valuations / reporting, fund cashflow accounting, fundraising / liaising with LPs which basically means completing their requests that can come randomly at any given point, fully pulling together the annual general meeting materials, etc.. I would be prepared to learn the ropes across all of these fronts which personally I found to be good experience because they tell you a lot about how LPs think about successful PE funds vs. unsuccessful ones, but also a lot of mind-numbing work at times too, especially as an associate. To be fair, this type of work was relatively contained to when we were kicking off fundraising. During the fundraise, some LP requests became fire drills (i.e., pull down leverage levels for all of your portfolio companies on a quarterly basis vs. covenants - the type of stuff you wouldn't keep handy and could be an annoyingly manual pull yet are super time sensitive). I would assume that your job is going to involve these duties. I find it hard to believe that a $500M first time fund is going to deploy any sort of meaningful spend on resources to complete these types of tasks.

From a deal perspective, when I started at my fund, deal teams were legitimately sometimes a partner + associate. Bigger deals would be a partner, VP, associate (there was only one VP when I joined -- similar total team size of 5-6 including two founders who were deal leads). So how manageable your life is going to be on a live deal is going to depend a lot on the partners' philosophies on two things: (i) diligence; and (ii) internal procedure. On (i), are they the types to perform "large cap diligence" in the lower middle market which means turning over every stone even though these companies are going to be smaller with less sophisticated data platforms? If so, that's going to be brutal work especially when you don't have the fee overhead to cover real 3rd party advisors (i.e., instead of commissioning a consultancy to do a market study, that's going to be you most likely in conjunction with a VP). On (ii), are they the types who want to adhere to a very structured approach to committees? I consider our firm quite good at remaining nimble. If we have an LOI that's due on a Friday, we aren't going to sprint to complete a huge 100+ page deck for committee on Monday just to get approval, four days earlier than we needed to. We bring updates to committee in pieces, aren't sticklers for formatting, and ultimately call ad-hoc committees if we need to. This significantly alleviates the internal hurdles of getting a deal through committee, which helps. Not all small firms take this approach. The final X factor here I would call out which is unrelated to the partners is firm culture at the mid-level. As a VP, I always try to take the approach of dividing and conquering with my associate where I can, but I technically have every right to tell them to do nearly all of the heavy lifting. You'd be surprised at how much sway one or two employees can have on firm culture when the team is 10 people. When I was an associate, my VP didn't quite take that approach and so there were plenty of very late nights. There is no great way to diligence this unless you know an associate who is already there to get the real scoop - that's just going to be part of the risk of making the leap early.

As an associate, my work life balance was effectively the same as my life as an associate at a larger, more bureaucratic firm. I probably had a little more flexibility because we would do smaller banked deals / more proprietary deals with looser timelines, but when things got crazy, they got crazier because there was so little manpower. When we were fundraising for Fund II, that was effectively like running a mini sell-side process while managing all the actual normal aspects of an associate role. However, when things were slower, there was significantly less pressure to work just to work. 

As a VP / Principal, my work life balance is significantly better than my peers at larger funds (granted, I get paid less so that's kind of the trade). Even taking the approach of trying to pitch in with my associates, I find that I'm much more able to load balance and prioritize across my deals / initiatives. There is very limited politics involved since there are only two partners and our dealflow is highly transparent. If a deal is low likelihood or unlikely to pass committee because we've seen this type of deal get struck down before by the other partner, we will kill the deal early, etc. I'd estimate that now, I'm consistently working 40-50 hours per week, I'm in the office 3 days a week on average, and I'll be on 1-2 closed deals per year which will take 2-3 months and involve many 50-70 hour weeks of elevated work and a couple bad 70-80 hour weeks. I also would say that I'm significantly more involved in the higher level, junior partner-level duties compared to my friends with the same amount of work experience at bigger funds, which I think makes my hours spent more interesting too.  

In terms of diligencing the partners themselves and their track record, people will tell you to try and get a hold of their returns / track record, their fundraising deck, LP reference checks, etc. My experience has been that this is going to be basically impossible as a non-senior hire. My recommendation would be to try to get as much face time with the partners during the interview or post-offer process as possible. See if they'll hop on another call or grab breakfast with you post-offer, especially if they seem to be in sell mode to you. Do they seem like sharp guys / gals? What are they saying their edge / reason to exist in this competitive market is? Do you believe them? Hopefully you believe them, but if they can't even really convince you, then they probably aren't very convincing to founders / entrepreneurs / LPs. If they pass that smell test, I'd try to find anyone else who would be reasonable for you to connect with who might have an opinion on the partners or firm (i.e., Any associates or VPs who have left? Any associates who work or worked at their predecessor firms who can share their reputation there? Any bankers who they do lots of deals with who might have a perspective on how they stack up in processes and what their associates' lives seem like from the sell-side perspective?) You'd be surprised at what you can find out in this department if you're creative but ultimately you're going to need to take some form of leap of faith as it definitely can be highly variable.