Just a thought I wanted to socialize. We all know how risk seeking entrepreneurs create the firms and industries that then become the stomping ground of risk averse hoop jumpers. It’s my understanding that loosely all the guys who founded the big firms, in their day, law was viewed as more prestigious than “commerce.” At least it was on the tail end of that paradigm.
If you wanted to leave the path (whatever path that is for you) and take more risk to have a shot at high upside, what would you do? I have seen a few folks pivot out of finance to startup roles and even tech grad degrees. Search funds the other big one of course. Eh.. interested in others’ thoughts.
Once something is prestigious, there’s no risk left, and gradually it becomes a worse and worse deal. Not a bad deal! But a worse deal, or maybe even just a different deal than you once deluded yourself into believing. Coddling yourself into thinking you can achieve your loftier aspirations (whatever they are) without risk is how you end up a jaded vp like me.
My quick hot take is that I think a lot of the traditional career risks related to being a tech founder almost don't exist anymore, the primary professional risks left are like opportunity cost and reputational risk.
Consider an early stage startup founder in Silicon Valley. I would argue there's so much VC capital and so much proliferation of "the Cult of the Founder" mythos that all the failure cases lead to pretty good outcomes. The startup fails, there's Growth stage or Big tech offer for you, you get the prestigious merit badge of being a former Founder, VC consider you more ready to start your next startup, you meet other founders that you can angel invest in, etc. The only things you could really fuck up in startup land are:
To whatever extent the original observation is true, I think it's even seeped into the startup world. It's ultimately a symptom of a game being played with a closer approximation to complete public information.
del
Are we fucking deadass rn?
Yeah I agree — the proliferation of the alts investment industry as well as other “rent seekers” that hover around operating companies like even banking / consulting has definitely changed the risk / reward profile of entrepreneurship — especially in the ironically more established entrepreneurial paths where “founder of Seedly the uber of seeds” sandwiched between Silver Lake and McKinsey is not exactly common but is not extremely rare either
del
Pondering on this myself all the time as a current independent consultant.
I feel like the answer is almost you kind of have to spot a unique opportunity in front of you and run at it? From reading the early PE day stories, those guys were opportunistic and the levers were hiding in plain sight.
Same kind of goes for early internet days. There was lots of fertile ground for new ideas based on environmental factors that some people ran at with a ton of grit and or interest (some say passion).
In my solo consultant days (mainly advising entrepreneurs) days I’ve kind of come to a conviction that entrepreneurial success is really affected by luck—I’d say +50% of the success. There’s a lot of right place right time. People you know or who know you play an outsized role. Who you were in the early days of your formative years really seems to play a part especially in tech but I’d say this is even way more broad then that. Two of my clients can really trace their starts in their most successful ventures to some family connection to the industry that made a big difference in early momentum.
Anyways, I guess I’m saying it’s a hard thing to chase. Certainly possible. But I do think to a big degree that plain vanilla professional services (including PE/AM/HF) does not really position you that well for the pitches that will give you that chance. If they do, in my experience, it comes more from the leftovers no one else wants (example, a shitco no one wants to deal with, but there’s hope), and even then you have to be judicious what you decide to invest your time into.
Private Credit at top shops is now prestigious, the pay has actually increased a bit but cash comp is changing with many of those firms either issuing public stock for comp or soon to do so (Blackrock / GIP / HPS phenomena)
If you can get into a great private credit seat and bank $1.2 base+bonus a year (exclude carry) as an MD for 55 hours a week that's pretty damn good. Bank that for a 10-15 years and you should be in a position to chase whatever you wish. Is that PC founder level, not even close, but you could then go raise your own capital if it suits you and you know how to sell yourself.
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